Last Updated on August 11, 2022 by user
Single broker vs multi-broker: what’s the best approach for group health insurance?
Arguably the hardest part of the insurance process for any business is finding the right broker partner. There are so many to choose from in the UAE market that it can often be hard to see the wood for the trees.
As well as being the most difficult decision to make, it’s also the most important. Picking the right, or wrong, broker at the beginning of the group health insurance journey can have far reaching effects – particularly on the cost, quality of cover provided and the employee experience.
The challenge is knowing what to look for. Business leaders aren’t insurance experts, so will naturally struggle to keep pace with the latest skills and capabilities that are expected. It can also be hard for businesses to understand how different brokers deliver different results, while packages aren’t always clearly differentiated enough to warrant making a change.
Faced with this much pressure, many businesses opt for a multi-broker strategy – thinking this will give them the best chance of finding that perfect policy. But there are several reasons why partnering with a single broker is actually the more effective option.
The idea that businesses need more than one broker in order to get the best deal on their group health insurance is a common misconception. Logically it seems to make sense – more brokers means more options and the best chance of finding a policy that fits your company’s specific requirements.
However, the reality isn’t as simple. For example, one of the more overlooked issues in utilizing multiple brokers is the added value propositions of each broker. What if the broker with less value added propositions provides the cheapest quote? Even though all of the brokers have the same information in terms of what you’re looking for in a group health insurance plan, they will likely come back with different options – which can add confusion to an already complex process.
And remember: if one broker is clearly the cheapest, there will be a reason for it. They may only work with a small panel of insurers, have a limited network, or lack the extended services and support required to maximize insurance policies. There will always be a downside, but it can be easy to overlook when comparing multiple brokers based on price.
Adopting a multi-broker approach also risks the worst case scenario – two or more brokers approaching the same insurer. Why is this a problem? Insurance companies only accept submissions on behalf of a company from one broker and will only release quotes to the broker that submits the application first.
This creates an environment that rewards speed over quality. When multiple independent brokers are bidding, the process becomes a game of fastest finger first, often leading to sloppy work and incomplete or inaccurate submissions. The insurer may also receive conflicting information from the brokers. As a result, businesses end up with a quote that doesn’t meet their needs or expectations.
The power of one
Ask most business leaders why they chose a broker rather than going directly with an insurer and they’ll highlight the time savings. Brokers remove the need to scour the market for the best deal and take on most of the admin burden associated with group health insurance.
This can only truly happen with a single broker strategy, which frees up the broker to focus on finding the best insurance option. When brokers aren’t bidding against each other, they can focus on advising and adding value to their clients instead of selling to them. This removes the need for business leaders to compare multiple different bids and take the time to analyze complex policy documents – thereby saving a significant amount of admin and stress.
The one chosen broker can analyze the market, compare different insurance options and provide valuable, insightful advice based on the client’s requirements. Without the pressure of having to compete against other bidders, the right broker will be free to put its market and product knowledge to work. As a result, it will be more likely to help businesses manage costs, reduce risk and ensure that all employees have the coverage and support they need.
What’s more, using one broker means it will be able to get to know the business at a deeper level and collaborate much more closely with HR and executive teams. Perhaps most importantly, it will be able to work with decision makers to break down insurance offerings and deliver the most effective package. This added value is why a single broker strategy is the best approach for any business looking to renew its group health insurance.
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