In a previous posting we noted: “Health insurance brokers recognizing and adopting high tech brokerage aggregation will prosper. Hedge funds, always in search of lucrative opportunities, will join in, consolidating market distribution, creating a series of controlling regional monopolies of Gold Star Distributors. The few remaining legacy brokers left standing will be beholden, “Outside Producers.”
Nava Benefits is an example of The New Era Technology-Based Mega Brokerage and the changing role of independent brokers as they transition to the role of “Outside Producer” as a matter of survival.
“Nava is the only brokerage that brings together deep benefits expertise with cutting edge technology to function as an HR team’s outsourced benefits department. Our technology streamlines every step of the benefits process, from renewal strategy definition, to enrollment management and auditing, compliance, and member support. We’re also the only brokerage to back up our offering with a money back performance guarantee.”
“Switching to Nava is easy and incurs no friction on your benefits plans or rates. When an employer decides they’re ready to upgrade to Nava they’ll sign a Broker of Record letter, which names Nava as their point of contact with existing insurance and benefits vendors.”
New Era Mega Brokerage relies on two methods of market distribution: (1) Direct to employer and (2) Through “Outside Producers.”
Regarding the later, New Era Mega Brokerages recognize there are hundreds of thousands of independent insurance agents throughout the country, all having valuable relationships waiting to be mined. A quick and easy method to scale business is to partner with these independents as Outside Producers working on a commission split.
Small independent brokerages don’t have the resources to compete with New Era Mega Brokerage. Substituting independence for survival is a tough decision that may be hard to swallow for some, but easy for others, dependent upon their ability to negotiate acceptable contractual language to their benefit.
We are seeing a historic movement towards an increasing number of aggregations of independent agents far more powerful than legacy aggregations of the past. Nava Benefits is one of several we will be watching with great interest.
