1st Quarter of 2009 Was My Worst

ABC

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I lost 6 groups this quarter.

I was unable to put on any new group business to make up for them.

Of the 6 groups 5 of them dropped the health plan completely.

The one that kept a plan in place decided to self fund 39 employees and I would not do that. I hated making that decision but if the group becomes insolvent and can not pay their claims eventually the employees would come after me.
Not worth the risk.

In the past I have never had this many groups drop coverage.


2nd quarter is going to be the time to write some group paper.
 
If you have 100 and lose 6, that hurts.

If you have 10 and lose 6, that's a disaster.

These are challenging times and not like anything I have ever experienced. I started this business full time during the tail end of the 74 - 75 recession. ERISA just became law and companies were starting to think about canceling retirement plans. (And most of them did, replacing with profit sharing and later 401(k)'s).

Then we had the wonderful Carter years when things went to hell again. Even the set back from 9/11 hurt for a while.

This recession was 10 years in the making and will not be turned around any time soon in spite of the second coming in the White House. Mix in the COBRA/ARRA crap and I expect quite a few small companies to drop group plans in favor of nothing or HRA.

Some of those 6 groups may eventually come back to you. Good chance your income will drop a bit more over the next 6+ months before it settles in.

This is a real challenge for anyone right now.
 
It represented about 8% of my group commission.

These were small companies that had been with me atleast 4 years. The businesses themselves had been around much longer than that. A couple of them were over 25 years old.

I went into these emergency meeting to try to save the plans and I would get the premium down 55% and the owner would look me dead in the eyes and tell me he is 3 months behind on rent. What can you say to that?

One was job recruiting company that at one time had 30 employee's. Their phones have been disconnected last week.


I expecting to lose another 12-15% of my block to the economy.

What is horrible is it took my 10 years to put together my clients and with in 90 days they start dropping.

Prospecting is so tough right now. I went into a group and they wanted to set up a group plan for about 15 employees and they projected that there was no budget for the 50% of the employee only cost. I had another prospect with 17 lives and he considered it and then after a few meeting flat out said his employee's are lucky just to have jobs.

I am going to keep on plugging and I am prospecting new industires.








 
Sadly more Hope & Change is in the cards.

I knew more of a few companies that laid off people the day after the election.
 
I know where you are coming from. Lost 60% of my block a few years back. Stupid me. Put too much emphasis on one account that paid a lot of bills. After 3 years of the easy life, they started selling off division. Took me another 4 years to lose all of it.
 
My commissions have been basically flat for the last few months in spite of writing new business at a steady pace. Policies written last year are "down-graded" to renewal commissions and some folks are dropping off all together. Others are consistently running late so some months I miss their commission until they catch up.

By then, someone else is late.

New business is good with much of it coming from referrals. The bad news is, a lot of them are rolling off employer plans and have health issues. This means taking a lot more time to find the right match and re-educating them on the way underwriting works. "It doesn't matter that you had Blue Cross of Georgia for years under a group plan, they won't take you because you have had 3 heart attacks, are 90 pounds overweight and smoke. But other than that . . ."

It took me two months to find a carrier to accept an 8 month old baby. She had swallowed the meconium plug during birth, spent 10 days in NICU but was discharged in perfect health. All follow up visits indicate she is doing fine with no residual, but yet carriers had a real problem with her NICU stay and wanted all kinds of medical history.

Fortunately I finally placed it and will be looking forward to collecting $14 in monthly commission checks.
 
My individual sales have gone up but because I have had to shift my sales model so I am writing some kind of new business.

I went ahead and negotiated a 25% 1st yr commission base with one of the carriers for new individual business. What I am writing will make up for the loss on the group side this year. My core business model is writing group health.

I have gone another 3 months without writing any new group paper. It has been since the 2nd quarter of 08 I have been in a serious sales slump. I wrote 4 groups 4th quarter of 08 only to have 2 of them drop off with in 2 months.

The core of new business sales comes from new companies. anywhere from 4-7 employees. And 1 out of 12 always pop to about 20 lives with 2 years. There is just no new start up companies right now that have a budget for a group health plan. So when it comes to existing groups there is not a lot of competition in my area with the carriers.

Its a very rough time.
 
I expecting to lose another 12-15% of my block to the economy.

What is horrible is it took my 10 years to put together my clients and with in 90 days they start dropping.

Prospecting is so tough right now. I went into a group and they wanted to set up a group plan for about 15 employees and they projected that there was no budget for the 50% of the employee only cost. I had another prospect with 17 lives and he considered it and then after a few meeting flat out said his employee's are lucky just to have jobs.

I am going to keep on plugging and I am prospecting new industires.


Just curious, why don't you offer individual to some of these employers?

The individual market has been consistent, and I have a 15 employee group that decided to have me offer individual plans to all of his employees and he "strongly" encouraged them to enroll.

Unfortunately the group was not large enough for list bill in this state, but still...
 
Just curious, why don't you offer individual to some of these employers?

The individual market has been consistent, and I have a 15 employee group that decided to have me offer individual plans to all of his employees and he "strongly" encouraged them to enroll.

Unfortunately the group was not large enough for list bill in this state, but still...

I did write some individual business on the groups that canceled. That no where near makes up for the loss. I have used the approach of individual health plans to replace group coverage but they have to get through underwriting.

I currently average about 3-5 declines a month.
 
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