Brown and Brown of Pennsylvania is an established national brokerage that continues to thrive via a business model that provides all the resources and advantages of a major enterprise, yet allows individual offices to operate on a local level.
According to Bill Shoemaker, benefits sales rep for the Mechanicsburg office in southern Pennsylvania, this means that each office is given the latitude to respond to—and accommodate—employer trends unique to their particular region.
As the sixth largest brokerage in the country, Brown and Brown has more than 8,000 employees in 200 offices nationwide. Brown and Brown of Pennsylvania is considered a profit center for the three locations that work together in the region: Philadelphia, Conshohocken, and Mechanicsburg.
“The offices are decentralized, meaning we work locally—and we truly do work that way, but we are able to leverage Brown and Brown national programs,” Bill explains. “So you could have a stop-loss carrier like ASG working with three Brown and Brown offices, which is great because we are communicating constantly and can see that any time one office excels at something, we have an opportunity to do more to leverage that model.”
Bill, who works primarily in the 50-plus employee market, partners with employers in his region to write primarily traditional, self-funded plans. “That’s the sweetheart spot and the majority of how we work with ASG,” he notes.
Trends Impacting Employer Options
In his position, Bill is able to keep his finger on the pulse of key marketplace trends. One emerging issue he points to has to do with employers, especially those in the manufacturing space, who are struggling to simply hire qualified employees.
“Central Pennsylvania is heavy blue-collar manufacturing,” he says. “In our region alone, we’re looking at one out of 10 candidates who have potential for an interview—and yet we hear from other Brown and Brown offices that it’s hard to find younger help who are skilled with their hands or have a trade.”
How this relates to brokering the right plan hinges on the swing to self-insured for smaller employers. Bill points out that self-funding is becoming more viable—even commonplace—for companies with fewer than 50 employees; however, stop-loss carriers are naturally more cautious about risk.
“Before, the process of writing a self-insured group was not as detailed as it is now,” he says. “The underwriting process today has to be more strict, in that employers and carriers have to make sure that employees are actually at work. If an employee goes out sick, or is out on an FLMA or another leave policy, all companies—especially if they’re stop-loss—should have a policy in place that will protect them if an employee is not working. If eligibility is not defined, it could result in a claim not being paid by the stop-loss carrier. You can’t assume any more.”
Responding to Industry Restructuring
Meanwhile, massive consolidations within the health care system are also impacting communities. “We’re going through a lot of change in our market, with large carriers and health systems consolidating,” says Bill. “Of the 150+ general acute hospitals in Pennsylvania, only about 25 remain independent.
"Again, that changes the landscape of healthcare because you have different pricing mechanisms: whereas the cost of services in regional facilities was previously relatively cheap, now you’ve got the small hospital paying inner-city prices. There’s a lot of struggle, and the carriers have to change to navigate the additional layers.
Ongoing Challenges Mean Stronger Partnerships
In such an ever-changing climate, Bill says he values being a long-time ASG partner more than ever.
He points out that one of our core values—making the ASG underwriting team available to all broker and TPA partners—“is simply good business. We get to talk to them, and tell them the whole story behind this employer or that one. With ASG, we know they’re going to honor the contracts and pay the claims timely, because they’re just good people and we trust them.”
For more information, please visit Brown and Brown of Pennsylvania online.