Competitive data basically compares existing benefits and rates with what the market will bear. For example, if a company is currently with Anthem for a particular product, our market analysts are going to go to different carriers, competitors to Anthem, to see how their benefit plans and rates compare to Anthem. It is valuable information because it is one of the very few tools we can use to negotiate down a renewal. We have great carrier relationships. We can use them. We can use packaging discounts. There are other things we do, but that competitive data is probably the key driver to convince an incumbent insurance company to reduce their premiums.
The broker’s expertise is even more important. It is crucial for companies to make sure they are working with a broker who really knows all the products that are available from the carriers. Carriers come out with new products fairly often. It is incumbent upon the broker to know what those products are and to determine if they are going to be a good fit for their clients.
Let me give you a particular example involving a group on which I am working with a particular carrier. They are getting a double-digit rate increase. We went to market and the market data showed that unfortunately, those renewal rates were competitive with the marketplace. What we then did was really pushed the carrier to find out what else was available, thinking that there had to be another answer. They told me about a new product they were just rolling out that offered identical benefits, but the only difference was a slightly smaller network of providers. By offering this product to my client, it reduced their premiums by 15 percent, which is pretty much unheard of today.