SaaS: The Future of Employee Benefits HOW AND WHY EVERY BROKER SHOULD USE TECHNOLOGY

California Broker Magazine January 2018 3

Our world is different The number of millennials on the planet is projected to total over 75 million this year...making them the largest living generation by population....over a third of the American working population is comprised of millennials (those between ages 18 and 34)....demanding their employers offer tools to make benefit enrollment easier, like online portals and apps...just no paper.

Benefits alone is no longer enough The primary driver according to a recent HR Study... seamlessly integrating functions such as payroll and benefits. Today s strategy requires the three legged stool to compete: 1. Payroll total solution or integration either way, single entry will be the standard. 2. HRIS mobile is a necessity. 3. Benefit Administration FULL On-boarding, Open Enrollment Management, ACTSupport (Add/Change/Termination)

SaaS Makes This Possible For Any Broker SaaS has changed every industry in our world. Yet our industry has been slow to adapt. Software as a service (SaaS; pronounced /sæs/ [1] ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. [2][3]

The transition to SaaS is accelerating Today s solutions require Benefits Administration, Payroll & HR The Guardian study shows that the past five years have seen a 165% growth rate in the proportion of employees using web-based technology for benefits enrollment. A 2015 LIMRA study found instead 68 percent of employees want to enroll in their benefits online or electronically and only 16 percent want paper enrollment forms. The primary driver according to a recent HR Study... seamlessly integrating functions such as payroll and benefits.

Nobody Can Deny That Benefits and HR are merging Technology is the impetus for this convergence: Simple concepts such as single point of entry set the stage; Benefits and HR share common data elements that, without technology, are burdensome; The emerging Digital Brokers have raised the bar by including HRIS as part of their standard offering; In the past, buyers had to purchase these solutions separately, but no more;

Adopters are achieving results When Cuna Mutual, a Wisconsin based provider of services to credit unions, developed an integrated technology platform for online benefits enrollment, the results were astounding. According to an ROI study conducted by the HR Consultancy Cedar Enterprise Solutions: A reduction in cycle time by 50% A reduction in cost per transaction by 60% A reduction in inquiries made directly to HR by 75% A 100% payback in just one year

Tsunami Adoption Rate Is Immanent Less than 2% of the nations 6 million small businesses have adopted an online solution. The next 5 years will bring a dramatic shift in how benefits are managed. Adaptation or Extinction?

Technology, Digital Marketing and Your Opportunity If you re looking for ways to embrace technology, digital marketing is one of the best places to start. It directly impacts your bottom line; While our broker values are still core to our agencies, we need to change the way we communicate them to potential buyers; While new to many, tools exist that make the transition possible for anyone willing; It s also good news because with technology you can reach more potential customers than before;

A Changing Battlefield

Changing Landscape For SMBs The landscape has changed dramatically...whether 1095 reporting or $5,000 deductibles. Small businesses have new requirements and they are looking for help: Competition, rising costs, and need to save time; Compliance changes & requirements; Need for intelligent reporting & analytics; Consumerization of Healthcare & personalization; Carriers requiring that enrollment forms be keyed no more faxing or emailing forms.

Change In Competitive Landscape The foundation of every growing solution is a SaaS platform. More prevalent APIs & connectivity have enabled savvy brokers. Your fellow broker is no longer the competition: New, well funded, SaaS brokers strategically attacking the traditional broker; Commission compression necessitates additional revenue channels; Payroll vendors aggressively entering the benefit arena; Growth in PEO market; Return of level funding and health underwriting.

You Can t Hide Your Groups If you have a 100+ employee group that is not online, you just as well paint a target on it. Every group over 100 files a 5500; Every group, regardless of size files a 5500 for their 401k plan; Data can be looked up by broker, carrier or anniversary date; Any savvy broker can determine the name of your group, their contact data, how much you get paid, who the carrier is and when they renew.

EXAMPLE: MIEDGE.BIZ 21

Hybrid Payroll as Entry Highly effective point of entry and extraordinary access to decision makers. Payroll vendors aren t doing anything unethical, they are simply leveraging their relationships. Are you?

I Better Read This... When a business owner gets an email from their payroll provider...they read it.

Legacy payroll providers Today s broker needs to recognize the importance of payroll as a defensive strategy.

Why It s Important To Market Your Agency

You Can Build The Solution...Now Tell The World Whether you realize it or not, your online presence, or lack thereof, is impacting the growth of your business. FACT: Any business can grow by adopting technology: By combining your trusted advisor status; The relationship skills that have made your agency successful; Add technology; You will be in the perfect position to take your agency to the next level;

Digital Marketing Can Work for Any Business Digital marketing offers agencies like yours opportunities to differentiate yourself from the rest: Increase marketing efficiency; Reach more contacts for every dollar spent; Results in more leads generated; Used on existing groups offers an efficient means to increase and diversify revenue opportunities while enahancing your service;

Generate More Leads Your website can capture leads and prospect data 24/7 do you have a landing page?; Digital marketing allows you to reach a very targeted audience with a tailored message and converts that audience to leads without ever picking up the phone; Millennial buyers compare solutions online before even contacting you; Millennial buyers will Google your name to check you out ;

Increase Your Revenue Per Group Who s emails do you open? The ones from people you know or from people you don t? Your customers know you, use that to your advantage over your competitors whom they do not know. Digital Marketing can help you scale communications with existing groups: Ever have a customer tell you they didn t know about your services, even though you ve told them many times?; Show your customers what you are doing and continually demonstrate you are growing; Increases your SEO presence so when your own groups look for services, they find you their trusted advisor; Consistent campaigns keep you in front of your customers;

Take Your Success From the Pysical World To The Virtual World Whether we like it or not, people judge a book by it s cover. Most fortune 500 companies do this in a way that maintains similar logo and color schemes, increasing brand recognition; Content marketing allows you to show off what you know, establishing expertise the #1 driver in a buying decision, giving brokers and advantage over all others; Small business are looking for free expertise all the time and is the best free advertising to generate business; 62% of adults now receive their news from some type of social media;

DIFFERENT TOOLS FOR DIFFERENT PURPOSES 32

Email Marketing No matter what your size or budget, large or small, there is an option that will work for you. Email marketing is the targeting of customers and can be used to impact them in calculated ways: Common, efficient and accepted by all. Email provides a reach out to call to action; Define the action and don t expect too much from each step; Define the purpose and audience are you selling retention to new customers or are you introducing yourself to new prospects; Sources, like G2Crowd rate and review tools based on actual users check it out;

Key Tactics in Email Marketing People are probably less interested in you than in how you are going to solve their problem: Send the email from a place they will recognize, particularly for customers; 54% of emails are opened on mobile devices. Keep it short; Segmentation is everything. Define the purpose and audience are you selling retention to new customers or are you introducing yourself to new prospects

EMAIL TRACKING: YOU CAN T DO THIS WITH A MAILER 35

Social Media Chances are you ve heard of Social Media but perhaps you haven t started: Facebook. Are you taking advantage of the fact that 79% of Americans have a Facebook account? LinkedIn. An excellent forum to show off your expertise within groups you are targeting. Twitter. A way to interact with your customers and prospects that lets them respond, generating leads.

It Keeps Getting Better! TODAY S LEADING SOLUTION S ARE LESS THAN1% OF COMMISSIONS AND PROVIDE OVER A 1000%+ ROI IMMEDIATELY

Support From The Ecosystem Is Greater Than Ever SaaS makes enrollment so efficient that many partners will cover all of your costs. Technology Friendly carriers or partners that facilitate the broker s use of popular platforms. Allows new business submission with secure channels no more paper or emails, even small groups. High quality, re-usable, employee communication tools making setups fast and easy. Case Example: GA + Broker + Technology = EDI Look and Feel by combining paperless employee experience with traditional automation.

SaaS Saves Time And $$ - Even On Small Groups Forget large group, ROI with small groups and SaaS can be over 1,000% We all know the drill: Type a memo; Go to the cabinet and gather 15 medical, dental and life forms; Deliver forms; Follow up with groups administrator several times; Pick up forms; Proof forms; Gather missing information, over several days; Scan forms; Submit forms;...it all goes away with SaaS. Hours become minutes.

Easily add VB and expand revenue Fewer forms and an embedded seamless experience. Todays High Deductibles and the rising Millennial generation has created a higher demand for Voluntary Benefits that ever. Average commission = 40% (may be low); Average participation = 40%; Average annual premium = $600; Your average case size is 15 employees You have 30 accounts; Compensation = $43,200 (+32%); Agency with 300 accounts averaging 20 employees = $576,000; SaaS allows brokers to simply turn on revenue generating integrations.

Online Is Green Between summaries, forms and booklets...the average employee receives over 200 pages of benefits documentation very year. 42 Employees =

SaaS and Valuations INTERESTED IN DOUBLING THE VALUATION OF YOUR BOOK OF BUSINESS?

Pre-SaaS $500,000 book; 3 Service staff at $70k; $290,000 net to agency; 5x Multiple at point of sale; $1,450,000 sale proceeds.

Post SaaS Double Your Exit Adding technology to your existing book of business is a better strategy than out-sourcing. $600,000 book (addition of VB = book growth of 20%); 2 Service staff at $70k (reduction due to efficiency); $460,000 Net; 7x Multiple (enhanced due to e-conversion); $3,240,000 Sale;

PLEASE SUPPORT YOUR LOCAL ASSOCIATION OF HEALTH UNDERWITERS In memory of John Patrick Bobincheck March 16, 1968 June 15, 2017 46