The new threat in the market

[MichaelJM]

Hey all, I wanted to post this thread issuing a warning to all of you in the corporate market for insurance. Automatic Data Processing Inc aka ADP now has an insurance department. Not just an insurance department for compliance or administration, but to solicite the sale of insurance products. This means everything from P&C to Health and ancillary lines. Frankly this is a gross example of the term "conflict of interest". ADP use to send mailers to agencies encouraging them to refer them to their clients for payroll and compliance administration. Now ADP is going after ALL of their clients soliciting ALL lines of insurance. What this means is that they have roughly 500k companies in the US with which to attack the open market.

They use their already collected datas to quote these rates, which is a huge missuse of their own terms of agreement stating that the information gathered won't be used for solicitation. Furthermore, they are contacting your carriers and requesting the claims loss ratios for health and P&C. They know your plan designs, rates, and histories. They pool together companies into rating groups to graze lower rates from a larger pool of companies. This means they will have the ability to out sell you on the bottom line 80% of the time. Fortunately, a lot of our clients continue to work with us, but this warning needs to be issued to all of you. Get your A game on we have a new kid playing in our pool.

 

[somarco]

Is this new?

I was under the impression they had offered PEO services complete with WC and benefits for some time.

 

[djs]

Not new at all. Actually, I've been amazed at how unsuccessful they are at it.

For a small business though, they do have a decent package, albeit, very expensive.

Business owners like simplicity (especially small business owners). ADP offers simple, but expensive. It's not that big of a threat, at least not in my area. In fact, it's one of the easiest things to unsell.

Dan

 

[moonlightandmargaritas]

Actually, I've been amazed at how unsuccessful they are at it.

"Big" business has a unique way of screwing things up. Recommended reading: "Small Is The New Big" by Seth Godin...

 

[MichaelJM]

Uh,
Total Source is the ADP partner in this, and it's relatively new. Ya they have offered WC for a long time, but they recently started adding all other lines.

 

[somarco]

H&R Block tried marketing benefits & payroll accounting a few years ago with disastrous results. As a general observation, the salesmen these firms hire are not the sharpest knives in the drawer. Just because they offer one-stop-shopping doesn't mean you are getting the best value for your buck.

 

[TXINSURANCE]

I get my workers comp through Paychex, truth be told it was a great price through Travelers and they easily deduct via payroll.

Prior to using them I called three P&C agents, two were good friends of mine - the rates were horrible and they could never get it done in a timely manner.

I don't think this is anything new at all, nor do I think they market it real heavy as the costs are high. You should do just fine with your "game on".