How cloud based systems are transforming the ‘traditional agency’ approach

Posted: 3/9/2016 8:00:17 AM by Miki Rettig (CA)
Original Article:

Brokers are turning to cloud-based systems as a way to gain new clients from competitors and retain the clients they already have. The increasingly popular platforms can provide a single point of access for a client’s employees, reduce the burden on their HR department and often provide valuable analytics and other forms of data.

Owen Wingate and his brother, West, started their Ponte Vedra Beach, Fla.-based brokerage Abentras in 2004 after spending 15 years at a “traditional agency” – run by their Uncle – where technology was an afterthought.

“We left him because we saw the future of what we were doing was on the Internet,” Owen Wingate, president of Abentras, says. “We as brokers had complicated every one of our clients’ lives.”

Each insurance product, including medical, dental, life insurance, vision, voluntary, etc., was with a different carrier. On top of that, there are a whole host of regulations to comply with, not to mention COBRA and flexible spending accounts. While at his Uncle’s agency, most of his clients required two to three employees to administer all those components.

The Wingate brothers thought there must be a better way and opened Abentras with the intention of “just figuring it out.” They decided to partner with Benefitfocus, a Charleston, S.C.-based provider of cloud solutions and benefits technology.

As Wingate sells, he does not pitch himself as an insurance company, but rather a technology company that funds the technology by selling insurance.

“With the groups we go see, we hardly talk about product,” he says. “The conversation is about delivery and efficiencies.”

“Nobody cares what company they are buying insurance from, it’s hardly any different anymore,” he adds. “We are selling a commodity. It becomes a function of delivery. A delivery system is what stands out broker-to-broker and how easy it is for that employer to do business. That is what sets people apart in our business.”

Employer access

It was a similar story at Nashville-based brokerage Bernard Health. The company’s co-founder, Alex Tolbert, launched BerniePortal, an integrated cloud-based HR/benefits platform in 2008. When Tolbert launched Bernard Health in 2006, which is now run by his brother as he focuses on BerniePortal, he was surprised by the amount of paperwork related to benefits that employers expected him to handle.

“I was pretty naïve,” he says. “There was all this paper. It was hard to draw a line about benefits because benefits touched many employer HR systems.”

At brokerages across the country, such as Abentras and Bernard Health, who have cloud-based solutions, they find they are taking business away from those agencies that don’t offer the services. Employers want 24x7 access from any Internet browser, any smartphone, any tablet, any device, says Tom Avery, president and founder of Innovate Broker, a Folsom, Calif.-based brokerage. Avery, whose firm has its own proprietary cloud technology, has seen 20% growth year-over-year on his agency’s total revenue, largely attributable to technology, he says.

“The simplest way to think about it is the cloud has brought transformation and efficiency to a lot of other industries and that should be expected to happen in the benefits industry. The benefits industry deserves it,” says Shan Fowler, senior director of product strategy at Benefitfocus. “It leads to a greater customer experience. It leads to more efficiency. You can drive costs down. It is a proxy for being modern.”

Cloud solutions

The reason for cloud-based technology is simple, those in the space say: For employers, it frees up HR to focus on strategy. For employees, it provides a single point of contact for all their benefits.

Employers want to have an HR platform similar to what sales teams have in, Tolbert says. He looks at the launch of, a cloud-based sales tool founded by Marc Benioff in March 1999, as an example. “[Benioff] knew what a customer relationship manager tool needed to look like,” Tolbert says. Benioff got the attention of company owners quickly by talking about how to grow revenue.

“Owners of businesses like talking about growing revenue and have big budgets allocated to growing revenue,” Tolbert says, explaining why he thinks the cloud-based revolution started in sales. Cloud technology then moved to marketing because owners love to talk about marketing and also have marketing budgets, he says.

A lot of companies don’t allocate large budgets to their HR departments, however, he says, explaining why cloud solutions may have previously been slow to permeate the space. 

“It is … the last frontier,” Tolbert says.

Data in the cloud

A big advantage that employers and brokers alike cite when they move to cloud-based solutions is the data it provides, which in a cloud is in real-time.

Data has transformed other industries by connecting data between scaling technology and measuring the scale of that technology, explains Benefitfocus’ Fowler. “Data itself is a piece of snow,” he says. “But when you start chipping away at it, you get big form and see more analytics.”

“Analytics drives insight and insight is actionable output of the data you have and are able to access in a unified way and in a consistent way by having it in the cloud,” he adds. “No matter how well we think we are doing something or how poorly we want to measure our success, our strength, and our weaknesses. The cloud helps to enable that.”

At Abentras, Wingate says they have been preaching the value of data for years. By putting clients into Benefitfocus’ system, Abentras has access to its clients’ data. “We don’t have to ask for a census,” Wingate says about renewal time. “We don’t have to go to them and say, ‘It is annual enrollment.’ We already have the census.”

In the cloud, all the data is timestamped, so if issues arise, they can be quickly resolved. “If Billy Bob calls and says he signed up for voluntary accident insurance and we don’t see that, we can go back to the system and say ‘Billy Bob waived that or there was a problem,’” Wingate explains. “We have all that data so we can be extremely efficient.”

His brokerage has a support staff of 14. But based on the number of clients Abentras has, if they didn’t have cloud solutions, Wingate estimates he would need a staff of 30 plus employees.

Making the sale

Employers love being in the cloud, Wingate says. But it does not come without its challenges. “It scares the person who is generally the HR assistant…They don’t know what to do and don’t have staff to put systems together,” he says. “The client does not know what [this all] means until we sit down and explain how it works.”

“Then, they are excited about it and having it all in one place, cleaning up their life,” he adds. “It makes it very different. They make the jump.”

His data shows Abertras will close 65% of sales in the first year, but in year two all prospects will sign on with his company. Wingate explains once you get a bug in their ear, and they spend all year inputting information in five systems, they can’t wait to get it all in one space.

“From the biggest blue-collar [employer] to the whitest white-collar, [employers] are tired of having different brokers and different messages with every single enrollee,” Wingate says. “They are not selling the same message every time.”


Right now the industry is at an influx, with technology companies rolling out “fast and furious,” Innovate Broker’s Avery says. 

After sitting in a room with 30 agency heads at a summit by Q4intellegence, an agency growth consulting firm, Avery says there were commonalties in each agency’s technology but no one bringing everyone together to drive the industry. “We have tech vendors say, ‘Come and grab me. Use me,’” he says. “But then conversely, unless you are a large national broker, we are not coming together to say, ‘Deliver this for me.’ We are not going behind and writing business requirements on here is what our needs are.”

In Avery’s view, that is next frontier in cloud-based solutions. To come together to develop a solution or solutions that meet broker’s needs.

“Where is this going? The answer is I don’t know,” he says.