NSBA Benefits Plan

Welcome to risky business commercial insurance with Butler Byers. Paul Martin here, the business commentator on CKOM and joining me are usual, co-host Colin Rooke. The commercial risk reduction specialist with Butler Byers, and also joining us today is Ryan Warner. Now Ryan is the benefits specialist with Butler Byers. Surprise, surprise. We’re going to talk benefits today because that’s why we brought Ryan on. And I want to welcome both of you and Colin. Maybe we could probably just start. Why did you decide that today would be a good day to have Ryan on and what are you doing in the benefits world? And that’s just a start from there.

Yeah. We like to bring Ryan on just to kind of give a market update on what’s going on from a high level. And then, we would like to talk about very specifics often what clients can do the sort of the do’s and don’t trends that we’re seeing.

And of course Ryan’s fantastic about that. And then just furthermore, something that we haven’t talked about in probably a year. So, Butler Byers insurance, we represent the NSBA benefits plan. And I thought it will be just a good time, call it spring just to touch base on that, explain why would you join it? What’s the benefit to the client? What’s the benefit to the NSBA? Why look at this thing and it is fairly unique and it does take some explanation as to sort of why it exists. Is there flexibility or is it sort of a one size fits all that sort of thing? So I thought we have been getting a lot of inquiries around benefits and specifically quite a few around the NSBA. So I thought we deviate a little bit from the norm and just touch base on what is it, benefits that sort of thing.

And then I also thought it’d be a good idea to bring Ryan back on and just talk again. We’ve talked about trends, but we haven’t really talked about sort of the marketing side, the hard market, which we’re still in again on the do’s and don’ts side. Should I be going to market every year, if prices are increasing? What does that say to the underwriting staff? And frankly, what’s the best way to safe you a few dollars, if that’s the goal and Ryan can certainly comment on that.

Well, good. And, frankly, it’ll be nice to talk about something other than cyber and COVID.

We started have been captured by those. And I mean that you smile at that, but it’s the reality that it is top of mind for so many people. So Ryan welcome, and it’s great to have you on board and Colin alluded to something, I’m going to put it to you. The, as well as that, we’ve talked a lot about the hard market and how insurance companies are having to rebuild their treasuries around property loss, principally in liability claims. Is it the same story for the benefit side? Is it a hard market there too? Or are they synonymous or do they operate differently?

Yeah, there’s definitely some tie in there. I think both markets are facing their challenges in a variety of ways and more than ever, employers are looking for ways to tweak their plans or save a few bucks. So it’s understandable that marketing their plan would be something on their agenda, but certainly the environment is similar at this time.

Anyway, I’m just wondering about using benefits plans now as part of the hiring and the retention part of the world I am hearing, and frankly, I’m surprised at this, but I am hearing and encountering in the business world in this province. A lot of people who are having difficulty holding onto staff, there’s some big turnover going on and you would think, man, in the middle of a pandemic, the one thing you’d want to do is just locked down, stay with your employer. In fact, there is a lot of mobility going on and I’m wondering, are you seeing that? And we should probably say, Ryan, you get a national perspective because you do work across the country. And I’m just curious about your observations on that. Are you seeing that employees are mobile right now or are they locked down because it’s the pandemic and I ain’t changing jobs for nothing.

Yeah. It’s really industry specific, but I would say pre pandemic, there was. I’m sure this won’t surprise anyone, but the turnover rates and the lets call it lack of loyalty to stick around for more than a year or two, that tenure was dropping quickly over the last 10 years. And more recently in the midst of the pandemic, it really hasn’t changed. I mean, I’m quite surprised to see the rate that folks are changing positions. If anything, I think it sounds like they have this extra time at home. So they’re, re-evaluating their situations and maybe applying for other positions. So that retention concern is that in my opinion, at an all time high and benefits and group retirement plans, is two boxes that employees are looking to check when they’re looking for a new position and it makes it that much harder for them to move on if they have it with their current employer.

So you’re seeing this as one of the tools for retention. It’s not true. I mean, normally we think I got to buy a benefits plan because I need the benefits for my employees. Well, you’re saying it goes now beyond that, to just paying for your prescription, this is actually part of the employment agreement.

Yeah. It’s an expectation. I mean, it seems like employees now are, like I said, they’re looking to check those boxes. I’ll throw on the kind of an odd comment at you that it strikes me as a bit bizarre that the actual contents inside a plan seem less important rather than the fact that you just have benefits. And then after the fact, once they find out what the plan actually offers, then they start to kind of mull over whether this was the right decision. They almost get that buyer’s remorse once they dig in and become employed. But, going in, they are mostly concerned about, do you have these programs?

I guess it’s starting to sound like table stakes.

That’s the great way of putting it. That’s exactly what I’m seeing.

So I guess that’s a great segue back to the NSBA program then. And if you’re a small business in Saskatoon or in the region, you can access these programs that are available to much larger firms by partnering up by being a part of the NSBA buying package. I assume that you talk me through that.

Sure. Yeah. The NSBA program is a great advantage for those small to mid-size businesses. It’s exclusively through Saskatchewan blue cross and the NSBA is negotiated a great deal. So the reality, if you’re a small business and you’re trying to get benefits in place, is there, there’s something inside those plans without getting too technical, it’s called a target loss ratio. And that is essentially the insurer’s break even point. So if you are a small business, chances are the insurer’s break. Even point is significantly lower as a percentage of premium versus a large business. And one of the huge advantages to the NSBA plan is that they have locked in that break even point at a much higher level.

All right. For the lay person, what does that mean? Normally, I would think high is bad. You’re telling me high is good, right.

Yes in this case. So, I mean, it’s a combination of obviously the bottom line premium number. Everybody wants to see that number low, but inside that premium, there’s a variety of things happening. You’ve got admin costs, you’ve got profitability to the insurer. You’ve got commissions often built in there. And then the majority of those premium dollars are being earmarked by the insurer to cover off claims. So that break even number, and there really is no magic to benefits. It’s just a factor of how much are your people claiming. Plus those admin costs, profitability and compensation equals your premium. So the target loss ratio or the break even point really becomes important at the renewal. So for example, a typical small business is going to be maybe 70%, meaning that it’s renewal time. If their claims come in and their loss ratio is 80% naturally, they’re looking at an increase. So we want that target loss ratio or that breakeven point. We want that number to be as high as possible, because that means more of every premium dollar is being earmarked to cover off claims expenses

Well explained for a complex thing. Now, listen, we’ve got to take a break. And when we come back, I just want to sort of wrap this up and then, then I’ll call him as another topic he wants to talk about. You’re listening to risky business commercial insurance with Butler Byers. We’ll be back after this.

Welcome back to Risky Business. Paul Martin here, your host, and as always, Colin Rooke the commercial risk reduction specialist with Butler Byers joins us. And today we have a special guest Ryan Warner. I don’t know if I should call him special. He comes here pretty frequently, probably six or seven times a year, at least. Anyway Ryan, great to have you back. And you’re the benefits specialist with Butler Byers. And we were talking just before the break about the NSBA program, and I guess it marks roughly the first anniversary of that program. And as you say, for small businesses trying to hire right now, if you don’t have a benefits plan, you’ve really put yourself in a difficult position because employees are pretty much demanding that. So for a relatively inexpensive price, you can join NSBA in Bing bang. You’re now having this program available to you. And I’m guessing you can describe this for me, but I’m guessing it makes available to even the smallest of business, the program that’s available to the largest of businesses.

You’re right. Yeah. You’ve nailed it. The advantages. You’re getting most of the flexibility and you’re getting most of the coverage options through the NSBA plan for a price point that would be attractive to small business. But as I said before the break, so much more of every premium dollar is going towards claims or expected claims. So the advantage is, it’s way more sustainable than most small businesses would be able to get on their own with another provider.

And I’m guessing as well, that even if I have a benefits plan and I might be a mid size or slightly larger business, I should probably entertain the notion of comparing my program to this program. And maybe the best option is to stop running my own and just join up with that one. That might be another option as well.

Definitely. Yeah. The other really nice advantage about this is it’s also supporting the NSBA. So we’ve been able to build in a component that’s rather than taking full compensation, we can support the NSBA and embed it in the premium. So not only is it likely that the premium point overall is going to be competitive, maybe even lower than what they’re paying right now. But as I said, more dollars going to their claims and they’re supporting the NSBA along the way. So it’s a really great win-win story for everybody.

All right. Colin, do you want to jump in here?

See, I just wanted to touch in into, because I think Paul or Ryan, you made a really good point around flexibility. And so just want to be clear too, that this is not a one size fits all predetermined plan. It’s just, it’s a higher target loss ratio negotiated by the NSBA. And yes, they grow as a result. However, you still have the flexibility. No one’s going to say, well, if you move to this, you’ve got to let that go. Or the limit is fixed at this. You can still make choices and take advantage. So I think that’s a really important thing just to touch on that. There’s complete flexibility as Ryan said, in the choices you can make as well.

I know we were talking also about the propensity in a difficult market time and when pandemics are around you and you’re looking to really be cost conscious, that one of the instincts for a business owner is to shop it around. Are you seeing that a lot? Are business owners coming to you and saying, I need to go to market again, as you call it, to shop this around and see if I can get a better price.

I’m seeing lots of it. At least the conversation. It’s not always in the best interest of the clients. So we will educate them a little bit on the strategy that’s involved and the timing. And what’s going on inside their own plan to determine whether it’s an attractive time for them to look at other insurers. I do run into plenty of cases where you really don’t want to go right now because you’re almost pigeonholing yourself with your incumbent provider. So naturally there is a better time in this instance to consider going to market.

I assume that the insurers are kind of overwhelmed. I get an ocean of applications in a difficult time too. Right. And they probably have as much trouble as the rest of us dealing with volume like that. And just saying, I’m not going to be particularly open-minded about some of this stuff.

For sure. hey, I mean, they’re a business too. And I think there’s a balancing act to be had here when the benefit plan, if you’re taking it to market constantly, eventually these insurers are going to look at your business and essentially say, we’re just not interested in investing or discounting to try to attract that piece. Because we’re going to watch it disappear as fast as we earned it. So there’s got to be a level of stickiness or loyalty to the business for the insurer to really get excited about investing and wanting to attract that business.

The classic business scenario, beware the grinder. Huh? All right. Colin I know you do want to talk about some opportunities you have within the company as well. So maybe with the last three or four minutes we have here, perhaps we could talk about that.

Yeah. I come on the show from time to time to announce that we are hiring at Butler Byers. And so for anyone that’s listening now, and you think this idea of selling insurance a little different, talking risk, being more focused on the consultive side of insurance and risk rather than just quoting, for anyone listening out there and you’re thinking that sounds like a career for me, we are looking for commercial producers, we call them. I’m also looking for anyone that’s interested in joining our personal lines practice. Butler Byers had, we’ve had a great last couple of years. We’ve added several to the team. I want to add several more this year. And so, if anyone’s listening and you know someone, or you enjoy the show, you enjoy what we do and you want to send someone our way, they can certainly reach out to me directly. And we can have a conversation about how it works, what to expect, that sort of thing.

Colin, do you differentiate? I mean, will you look at somebody who’s inexperienced, if I could put it that way, not necessarily experience in insurance or is it someone who is a seasoned player that you’re looking for?

Yeah. Really good-

Or all of the above.

It’s funny. Most of the hires I’ve made, not trying to deter anyone from applying. I’ve had no prior insurance experience and now, again, that’s not deliberate, but I’m looking for people that are coachable. And I talk to a lot of brokers. I would say the volume of those reaching out to me would be, I don’t know, five, six, seven, to one. However, if you already have predetermined bad habits and I determined that it’s going to be an uphill battle trying to coach you into looking at the industry a lot different, I just find it easier to say, I’m going to take Paul here who doesn’t have any bad habits because he’s not in the industry. I’m going to teach him the right way or at least our way.

And so again, I don’t want to deter any broker out there, but primarily for me, are you coachable and are you going to look at a completely different system? And are you going to be able to say no to look, I just want a quote. I don’t want to put the work in. Get me a price. If you’re okay saying, well, hold on. There’s a right way and a wrong way and let me explain that to you. If you’re that person, regardless of whether or not you’re in the industry, reach out.

All right. And they can just contact you directly through Butler Byers. And you’re the one who’s fielding the calls.

Yeah, absolutely. They can reach out through our, we’ve got a chat or an email through our website. Actually, we’ve got a brand new website just launched today. So check that out. Let me know what you think. But yeah, you can reach out directly through that. You can even phone in asked to speak to Colin or find some way to connect. I think we’ve got a careers link on the website now. And I say, think just because it literally just did launch today and I have not double checked that.

All right. Well, thanks again. And look forward to seeing what kind of response you get from what your new website looks like too. And had I known that, maybe that would’ve been the theme of today’s show, but, we’ll save that for another time. I want to thank Ryan Warner for joining us today, the benefits specialist with Butler Byers. And always Ryan, your insights are really tremendous. So thank you for that. You’ve been listening to Risky Business, commercial insurance with Butler Byers, Paul Martin here. Thanks for joining us. Talk to you next time.