Stephen Brandt: Welcome everyone. I’m Steve Brandt. This is the inaugural edition of our Vitech Talks Podcast, and I’m so excited that you’re out there listening. I have for our first show an exceptional, exceptional guest, Nick Rockwell, who is the President of Eastbridge Consulting. He’s come all the way from sunny Phoenix, to join the podcast on Zoom like the rest of us in this crazy time. For those of you who don’t know who Nick is, he is the President of Eastbridge Consulting and he’s been gracious enough to come on board today and talk about the group voluntary benefits market. He has over 18 years of broad experience in a lot of different roles in the business arena, sales, distribution, administration marketing. He’s been at Eastbridge now for seven years. During that time, he’s led and delivered consulting projects for clients across the insurance and non-insurance markets, third-party administrators, and technology platform segments. Prior to joining Eastbridge, he launched and led LifeLock’s introduction into the voluntary benefits arena, achieving an incredible 400% sales growth over two years.

Nick, welcome to our inaugural podcast.

Nick Rockwell: Steve, thanks so much. Thanks for having me and Eastbridge, and thanks for the introduction. I think most people can agree, yourself included, is when people are reading off the list of whatever you’ve done, I try to change it and try to make it less cringe-worthy and I still haven’t gotten there yet, but I really appreciate the intro. The point is, Eastbridge, which was here long before me, has a lot of data and I’ve been blessed to join the company and lead the company and get a lot of cool insights. So I look forward to the conversation.

Stephen Brandt: All right. Excellent. So we have a few questions for you, that we’ll take you through and we’ll see where the conversation goes. The first question that’s really interesting is, coming off the pandemic, everybody’s wondering, how did the business do? How have we rebounded? Because like every business, there were dips in the group business, in the voluntary business. Certainly some heightened claims activity and disability. So there’s a lot of group carriers out there feeling the pinch around that. But from a voluntary perspective, I mean, what are you seeing? How did the market bounce back?

Nick Rockwell: Great place to start. So, a quick rewind and recap of the history of voluntary growth and we’ve been tracking going back to 1998, something like that. And really every year, year over year, the industry of voluntary benefits has experienced anywhere from three to, call it, excluding this year, I’ll get to that in a moment, 8% year-over-year growth. So that’s better, right on par with or better than GDP, just about every year. Now, the only down year was 2010. 2010 took a hit. A lot of people look at that and say, well, why wouldn’t that have been a good year for voluntary? Ultimately, it was. ACA and Obamacare did change the context of group benefits and medical benefits and voluntary has taken advantage of that, seen some advantage from that.

But it was truthfully growing very well before, and that was just simply a year of distraction. So then we fast-forward more and more growth to 2020 and surprise, surprise, like the rest of the world, voluntary takes a hit. We saw a decline, a pretty significant one in 2020. But it was not because of a real lack of demand. I mean, I just always want to reiterate, I think it’s obvious to people, but we want to reiterate that some industries take a hit because the value of what they bring wasn’t necessarily as valuable anymore. If people aren’t leaving their house, something like an Uber is going to maybe take a hit at a certain point, because people aren’t drawing on that resource. It’s not that people didn’t need voluntary benefits. It was the chaos of what HR and business was dealing with, businesses having to let people go and all of that similarly to ACA creating chaos and distraction.

So in the middle of the pandemic, we had a lot of employer feedback from some quick-hit research that said, “Hey, we expect more people, as a result of COVID, to enroll in benefits,” which a lot of us in the industry would expect. That it gives us a story to tell about life’s protections about preparing for the unknown. And I think we saw that where the challenge lies is that we didn’t get a lot of new groups. So a lot of people who did get new groups or went back to re-enrollment in 2020 were able to say, participation, we did see some increases. We did have to pivot in a lot of those instances and do things differently and move to self-service versus face-to-face for those still doing that, etc.

So in any event, 2020 was sort of a down year, but not for everybody. It was down mostly for the big carriers. A number of large players in the kind of middle top 15 still saw success, but overall, the largest carriers were down, so we were down as an industry. Well, now in ’21, we have seen a rebound. So we’ve seen some of the large carriers who were down up. We’ve seen some of the kind of middle ground, top 10 carriers who are up, down interestingly. We’re still kind of digging into that and unpacking with some folks as to how that shift necessarily occurred.

But the point is there’s people having different experiences. So it’s not a homogenous environment by any means. Overall, the industry was up about 11%. Life and disability kind of carried the day. The health, supplemental health products grew, but not by their normal clip. So I think brokers were really kind of getting back to basics, talking to employers about fundamental products, probably a lot of re-enrollment activity going on. So sales in general were definitely up not to pre-pandemic levels, but that kind of growth swing back definitely put us back in the right trajectory.

Stephen Brandt: Yeah, yeah, that’s exciting. And certainly uncertainty of the pandemic, correct? You spoke of that, [which] really had an impact on what was going on, but it’s great to see it bounce back. And in some interesting places — whole life, universal life, those types of products to see an uptick. Because, to your point, it’s [due to] life’s uncertainties, you ought to be looking at these types of products again, right?

Nick Rockwell: Absolutely. I mean, I expected a little bit of a bigger bounce in something like a critical illness, and I think we actually will, but I think first what happened is, again, I think a lot of the broker community went back and said, “Look, let’s start with some fundamental things here. It’s the stuff we’ve always been selling that has maybe lost under the weight of the variety of products that are out there, that there’s still a lot of people not protected.”

So I think we saw a lot of that, but I think the critical illness message, along with accident and hospital identity, they also still suffer. We see in all of our data points that people just don’t understand them. There’s still a real lack of understanding. There’s a lot of consumer reaction, especially in a self-service enrollment methodology to say, “Oh, I have healthcare. I don’t need a critical illness.” They don’t understand what the protective mechanism is unless they dig into it. So I think it’s going to take another year or two to see some of the enrollment areas pick up, but yeah, you hit on such a good point that even whole life was seeing. We have that whole life report that came out recently and it does show that we’re seeing sort of a resurgence there, an uptick there.

Stephen Brandt: Yes, which is pretty amazing. Everybody thought that those products were kind of left for dead in the voluntary space and well, they just come running up, come screaming up the, from the outside lane. And I think it’s confused a lot of carriers because they just weren’t really planning on that, right? Now, they have to readjust a little bit to maybe capture some more market share that might be there.

Nick Rockwell: It definitely depends on your distribution. We’ve some term-focused players say, “Do I need to get into that space?” And if you’re playing with a certain type of broker, a more group or true group-oriented focused on the medical broker community that may be less necessary. There’s other carriers that focus on the enrollment specialists and classic, what we call classic voluntary workers. And there, you need to consider it if you can. It’s a tool, and technology is making it better applicable in the, or not applicable, better deliverable in the group space than it has been before.

Stephen Brandt: Yes. That was certainly an in-depth explanation of what’s going on out there. What about changes? What do you see as the most critical changes going on in the space? How do you see that playing out?

Nick Rockwell: There’s such a long list, but the first thing that always comes to my mind when people ask about change is enrollment, because it’s this area where the players have changed. The styles have changed. There’s so many things influencing it. So let’s start with the front end of it. It’s become something where people have to do a better job of educating employees. So how do we do a better marketing job? Well, employers aren’t marketers. So over time, getting people to be more comfortable with promoting benefits in a healthy, non-sales-y fashion has really been kind of the key to getting that front-end piece right. And you need, as a carrier, to be good at that. You need brokers who have an eye for it. And then, right along with that, you have this advent of the benefits admin system and the growth we’ve seen in that community over the years, really kind of leading all things enrollment. They have to be able to help deliver it.

And then the screens and the actual enrollment environment, what’s the story? It used to be [that] it was just an app taker, right? Radio bugs. You want this or not? And that was obviously the first phase after paper. And now we’re seeing all kinds of technologies that can overlay that and help decision-making and decision widgets and all that. And then, even post-enrollment, the whole EDI process, the data exchange, that’s still a behemoth for carriers to deal with. It can be the bane of existence for brokers and employers going into January 1st, because if that doesn’t work right, it’s going to be tough on the billing. It’s like, if you don’t get that first bill right, it cascades.

So enrollment is such a linchpin piece and there’s so many elements to it. We’re big fans of the idea of an active election. A lot of brokers have difficulty achieving that, but there are many out there, specialists who will achieve those types of working conditions for a voluntary enrollment. And it has to include the medical. It has to be everything. You can’t get an active election for one product. So that means that process has to be talked about in Q1 with the broker and the employer talking about that type of delivery experience. But often it’s talked [about] in Q3. It’s talked about in September as we’re implementing and people just don’t get there. And that’s one of the most impactful things we can do for employee education is say, “Hey, you have to say yes or no.” When people think about saying no, they learn about something more. So there’s just so much you could talk about with enrollment.

So when I think of change, I think of all the things that are going on there, new players, new methodologies, and I think carriers, brokers, platforms alike just are constantly having to reinvent the role they play in it. The next piece of change I was thinking of was the fact that brokers and employers really are dictating that more. Ten, 15 years ago, involuntary was looking for the carrier to kind of dictate it, but that’s changed. That’s not necessarily a new observation, but I still run into people who, particularly on the carrier side, who are trying to own enrollment rather than be extremely nimble. Our advice is always to be ready to be extremely nimble. So those are some of the many elements of change that I think are most important.

Stephen Brandt: Yes. And it’s such a technology-driven dynamic right now, and accelerated through COVID; even the smallest of groups now want some sort of virtual experience, decision support, and carriers have kind of relinquished to that. That whole piece of [the] technology landscape, too, and the benefits admin. Then the brokers, and the employers and the HRIS systems. I think the “be nimble” piece is good advice for carriers these days, because the easier they can make it for those other entities to do the job, the better off they would be, correct?

Nick Rockwell: Yep.

Stephen Brandt: In selling their products, that’s really good. Thank you. So I mean, we know what’s selling and we know what’s changing. Where is it happening? Where are cases being won and lost these days?

Nick Rockwell: Yeah. It’s a good question. So I think there’s still a lot, in particular, on the carrier side, we run into the slot with companies where there’s still an attitude that product is where it will be won. That if I have the best product, if I have the most features, etc., etc., that’s going to win. But the reality is, if you look at more and more of the data points we pull out of the market, we’re seeing where product is certainly important. I would never say it’s not important, but we’re seeing a lot of competition for factors like administration, billing, etc. When you look at takeovers, specifically, the number-one issues all revolve around the inability to effectively set up pipes and data feeds between companies getting that bill right. And then employee experiences like claims.

So you look at all these administrative factors that for me, what that tells us is things are being lost. The product’s very important, but once that product is sold and installed, it’s not necessary…. until we go back and review it or another broker comes in and looks at it, it’s sort of there. What people actually live with day-to-day, are the employers living with the billing experience, living with the data feed experience, the employee living… I feel like what we hear more is it’s less about people finding that a product didn’t cover what they thought it would cover. It’s that the product took a long time to pay. It was clunky for us to file the claim. It was clunky for me to know. So it’s less the product delivering on the needs. Though, that’s a problem in plenty of instances and that goes back to enrollment education, but it’s mostly around claims process just being foggy.

And so all of those are experiential pieces that are way beyond product. They’re the type of thing that if a broker experiences that with a carrier one time, you’ve kind of… we’ve, we’ve hurt the opportunity to get into more of that block of business. So it’s not just one group that poor billing or poor EDI feeds impact. So in a word, administration excellence is huge. I think carriers across the board are trying to up their game. We’ve had an executive perspective survey that a carrier leadership has been telling us for the last two surveys in the last three-some odd years, that that’s a huge part of their focus and investment, but it continues to be that way. So there’s plenty that aren’t an investment, but it continues to be that way. So there’s plenty that aren’t really seeing that end, that only continues. And again, more focus on the claims experience in general and being employee-centric in a voluntary program relative to claims.

Stephen Brandt: I mean, and you’re really hitting on the customer experience. Whether it is the broker, the employer, or the employee. It’s that customer experience, which is really all-encompassing from enrollment all the way through administration, billing claims. And they’re right when they tell you that they have to focus that, but it’s hard because they have to basically transform their legacy environments to be able to meet the demand that those entities are calling for from a servicing perspective. And that’s not easy to do, but that’s a podcast for another day.

Nick Rockwell: Well, you guys probably see it in what you do so much, right? How many clients are moving from an environment where they have multiple systems?

Stephen Brandt: Absolutely.

Nick Rockwell: And some are easier to unwind than others. And some have the idea that I should just do one at a time. And just that piece of it, brokers learn that quickly that a carrier in transition may be the most dangerous situation of all. So I think the type of technology you are aiming for is becoming in far greater demand because we’ve seen it. It’s just these systems that really need to be more streamlined, to be more industry recognizing of the industry mechanics and all that. But this administrative component is, again, it’s so big. You can have the biggest, baddest product. You go sell it in. And the next year you’re out because we didn’t have our admin game on. And that is such a cascading problem for future results, not just with that broker, but with their agency and reputationally and people have to get it right.

Stephen Brandt: And that really hurts. Nick, we need to conclude, but this has been fantastic. You’ve been an incredible guest and I’m honored and privileged to have you on our first show. I hope you will come back again because you have some incredible insights and things to say. Thank you again.

Nick Rockwell: Absolutely. And thank you guys to having us. It’s been great. And thanks for doing these. I wish more people would put thought leadership out there because the industry needs it. We need to be thinking about this stuff and having these conversations and getting different opinions. Thanks again for having us.

Stephen Brandt: All right. Thank you. And thank you to everybody for listening. We’ve got more coming, and this was number one, but we’re coming at you with more fun talk about voluntary benefits and group insurance. Talk to you soon.