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Non-Profit and Social Service Solutions. Building an Association, Building a voice Presented By Wentworth Financial Services, Inc. The Wentworth Team.
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Non-Profit and Social Service Solutions Building an Association, Building a voice Presented By Wentworth Financial Services, Inc.
The Wentworth Team Our team members take an ownership approach with each of our clients. This results in long-lasting and caring relationships. This approach is one of the cornerstones of Wentworth Financial Services Inc.’s 25+ years of business success. By providing regular communication on the evolving trends of your plan and by interacting regularly with key personnel and employees as a resource to their benefit concerns, we build a valuable partnership with our customers. Wentworth is a division of Cowan Insurance Group, which provides insurance and risk management products and services to businesses, organizations and individuals. Cowan is affiliated with Frank Cowan Company through common ownership. Together, they have been operating in Canada for over 80 years.
In House Services Group Benefits / Retirement Cowan Financial Solutions Health and Disability Management • Individual Consulting Life/Disability/Critical Illness • Executive/Key Person Compensation • Buy Sell Agreements • Key Person Insurance • Financial Planning • Short Term Adjudication • Early Intervention • Return-to-Work Program • Policies & Procedures • Long Term Disability Administration • WSIB Case Management • Prevention & Wellness • Group Benefits and Retirement Consulting • Employee Surveys • Group Benefits Third Party Administration (Admin. / Claims/ ASO) • International Programs (Inpat/Expat) • Affiliation with US Broker
History and Trends within Non-Profit Sectors Traditionally the Non-Profit and Social Service sectors were considered to be a “high” or “undesirable” risk by a majority of the insurance carriers across Canada. Concerns were mainly attributed to high rates of disability claims and poor experience results within insured benefits.
History and Trends within Non-Profit Sectors Factors which contributed to this classification of “high risk” in disability and experience rated benefits: • High employee turnover • Lower wages on average than compared to for-profit • Higher average ages • Higher female content • Physical and psychological demands of the job • Funding for the sectors are perceived as unstable • Additional or higher than average administration timelines and complexity
History and Trends within Non-Profit Sectors Historical Responses by Insurers to these sectors: • Straight denial of coverage • High rates applied to cover perceived risks • Only consider large, well established groups for coverage • Only cover groups through association/pooled plans to limit individual risk • Will only consider groups on a case-by-case basis, with no guarantees on continued quotations for similar cases Overall, there is a trend of avoidance with this market in general.
History and Trends within Non-Profit Sectors Concerns from Non-Profit Employers regarding Group Benefits: • Increasing costs vs. set budgets • Education of both management and employees • Training for Plan Administrators • Competitiveness of benefit program offered • “Availability” or support levels offered from brokers/plan-advisors • Disability management • Obtaining coverage for the first time
History and Trends within Non-Profit Sectors As a result of the historical view of Non-Profit and Social Service organizations today’s Insurance marketplace is restrictive and expensive not only for the employers themselves, but also for the brokers representing these groups who often invest additional time in education and administration of groups in this sector.
History and Trends within Non-Profit Sectors Facts for Ontario : • Over 40,000 people employed in the developmental sector in Ontario • Annual provincial government funding of 1.5 billion on developmental community based services • 3rd highest level of funding applied to any ministry in Ontario (behind health and education) • Over 300 groups in Ontario alone • Over 36,000 individuals who are directly supported by these agencies with over 300,000 people impacted by these services • Continued funding is expected indefinitely as there will always be individuals in need of support
History and Trends within Non-Profit Sectors In summary (pt. 1): Historically: A market with a bad reputation that has been avoided by insurance carriers and subsequently by brokers.
History and Trends within Non-Profit Sectors In summary (pt. 2): Ideally: A large market with only a few aggressive competitors that offers long term funding and support from provincial and federal sources…i.e. “Recession Proof”
History and Trends within Non-Profit Sectors In summary (pt. 3): Realistically: A challenging market with better than average stability over the long run.
Association Styles There are three main styles of running an Association Group Benefits product: 1. Set/Standard Product with Shared ExperienceExample – Chamber of CommercePros - Initially a good deal as there are discounts for new members. Rates are generally lower than if marketed alone due to the volume discounts & lowered expense ratios.Cons - Shared experience between members (you can be penalized even if your experience is good). “Good” groups will eventually leave as their experience will be better than average, but will still get hit with the average increases. Set product offering (i.e. must fit in the “Box of Benefits”), very little opportunity to have custom plans.
Association Styles (con’t) • Administered through a TrustPros - More Flexibility (i.e. plan design can be custom). Multiple methods of funding available. Cons- Must become member of Trust. Trust is responsible for any deficits or unpaid premiums, which can be passed on to members in good standing. Trusts are meant to generate profit and must also pay for the management team.
Association Styles (con’t) • ConsortiumExample – OASIS, WCSSP, HHCAPros – Benefit from the volume discounts and lowered administration costs. Rates are based on your own experience, but can share in the good experience of the whole group. Individual Funding method can be chosen by each member, not dictated by association.
A History of Success & Wentworth Cowan Social Services Program (WCSSP)
Oasis Benefit Program: A History of Success Partners Since Day One! Since 1998 Wentworth has been the official provider and benefit consultants for the Oasis Group Benefits Program. We are the only insurance brokerage firm in Oasis history that have been appointed by the board of directors and recognized as an exclusive partner/provider.
Oasis Benefit Program: A History of Success A product was required that addressed the specific concerns of the Non-Profit Employers and focused on a strong relationship between the Oasis organization and the benefits provider. The development process with the Oasis Group Benefit Program was geared to avoid the typical “cookie-cutter” approach, as it had failed to provide stable and cost competitive benefits for this sector in the past.
W.C.S.S.P: Building on Success The W.C.S.S.P. builds on the lessons learned through the 11 years of selling, administering and servicing the Oasis Benefit Program so that a comprehensive product with a specific market focus can be offered. It is intended to be a program which is directed at ALL non-profit and social service organizations, there is no restriction to be a member of Oasis or any other governing body.
A History of Success Problem #1: Cost Control Solutions: • Guaranteed Expense Levels – In order to help control the level of expenses paid out, each Oasis/WCSSP member organization is guaranteed an automatic Target Loss Ratio, regardless of size. These expense level are extremely competitive for groups under 100 lives and subsequently requires less of the allocated budget to pay for administration vs. claims. For groups over 100 lives, we have the ability to negotiate for even better TLRs based on their size.
A History of Success Problem #1 (cont’d): Cost Control Solutions: • Volume Discounted Pooled Benefits – Although each group is considered a unique entity under the program, the prices for Life, AD&D, Dependent Life and LTD are generated with volume discounts based on the size of the entire program as a whole. This helps to control the costs of these benefits as effectively it creates a beneficial “spread of risk” that is applied to the pricing.
A History of Success Problem #1 (cont’d): Cost Control Solutions: • Oasis Profit Participation – Effectively this provides a premium credit in years where an individual organization’s experience has been positive, which allows for increased cash flow through reduced billings. Please note there are some restrictions in plan design to be eligible for the Profit Participation component (pooling levels, size, etc…). • WCSSP Claims Gain Participation – Even though each group is individually rated based on their own experience, in years where the full block performs at preset membership levels with positive experience, a pro-rated premium credit will be awarded across the board.Wentworth is one of the only brokers in Ontario to be offered this program for our clients by Manulife Financial. Normally this program is designed to pay a portion of the proceeds back to the brokerage firm, but our stance is that 100% of any credits earned are paid to the block of clients.
A History of Success Problem #2 Education and Training of Plan Administrators and Plan Members Solution: • Acknowledge the extra time and support that will be required to assist in these areas for this sector, which allows Wentworth to promise and follow-through on a strong and supportive broker presence that provides constant communication regarding plan performance and updates to plan/benefit offerings. Training opportunities for Plan Administrators are readily available from Wentworth when requested, either in person or over the phone depending on physical location. • Disability Management – Through Cowan we have been able to include an offering of a free review of each client’s internal disability management process with their administrative team
A History of Success Problem #3 Competitiveness of the Benefit Program Offered Solutions: • Flexibility – The Oasis/WCSSP Benefit Programs were developed to allow each member organization to design their benefits as they see fit (i.e. no set plan structures to choose from). This allows the organizations to fine-tune the aspects of their plans which they feel give them a competitive advantage with their benefit offerings over both short term and long term timelines.
A History of Success Problem #3 (cont’d): Competitiveness of the Benefit Program Offered Solutions: • Unique Offerings – Through non-standard benefit offerings developed (or in current development) in conjunction with specialty carriers Wentworth offers the ability to enhance the Oasis/WCSSP plans at lower than market average pricing. Examples of such benefits include: • Special block pricing on E.A.P. offered through Ceridian to members • Enhanced benefit offering along with reduced pricing on AD&D coupled with a basic critical illness policy issued through Ace Ina • Disability Management services, now offered through Cowan • Retiree Benefits • 2 year (extended) rate guarantees on renewals
A History of Success Marketing: • Wentworth is an active participant and sponsor throughout the year in Oasis Organization’s activities on both the individual group level and with the organization as a whole. This allows us to increase brand recognition and foster a positive reputation of support.In particular, Wentworth is a major sponsor of the Oasis AGM which provides a great networking opportunity with both potential and current clients. Through participation in the annual trade show our information booth has been traditionally a good source of new contacts. • Wentworth is automatically notified by the Oasis Organization whenever a new group becomes a member.The new member then receives an Oasis Group Benefit information package from Wentworth, which is then followed up by a sales agent for review. • Oasis distributes a quarterly online newsletter which we have committed to purchasing the first advertisement space they have made available in the December issue. • Wentworth/Cowan distributed newsletters which cover overall trends and industry specific information.
A History of Success: Proof is in the Numbers Wentworth Financial/Cowan InsuranceProfit Participation Plan (OASIS) Total Refund since last quarter of 2010: $56,101 Total Number of Lives Insured (NFP): 2239 Total Clients (NFP): 375 Total Premium under current management (NFP): $68,402,000
Building An Association There are two methods of building an association style plan: • Building the plan and then the interest. • Building the interest, and then the plan. The difficulty in option one is that as a broker we would try and build a plan that would be beneficial for your industry and would have to get support from a specific carrier (as opposed to going to ALL carriers to get the best deal) without any actual numbers to support our negotiations. This leads to the plan not fitting the ideal structure for the industry and the carrier not being able to offer the best options as they have to “guess” at the potential success…and they will always bet on the safe side with their money.
Building An Association Option two allows us to take a more dynamic route where we work in concert with your administration & members through open forums and focus groups to build a plan from the ground up that encompasses the “Must have, Want to Have & Wish to Have” aspects that fit YOUR industry the best. Through this co-operative process, we would look to compile a sizeable pool of companies that are prepared to move into the association when it has been built. This gives us a stronger negotiation position with the insurance carriers, as they know the strength of the initial association and would be more willing to negotiate on key items and benefits.
Building an Association This is your chance to build on your terms, to best benefit your industry. The more interest, input and direct support you can offer, the better the results will be. Over the coming months we will be looking to your membership for their support and knowledge, without it there will be very little to build with. With it, we will have the opportunity to build something which benefits the association, your companies, your employees and their families on your terms.
The Next Step: Stage 1 STAGE 1: With the approval of your board of directors to perform a feasibility study on the creation of an association group benefits program for the exclusive use of its members, the next step will be to setup a series of information gathering sessions and invite out your general membership. From these information sessions we will be able to determine the following: • Overall interest in the potential of the program. • Industry concerns that need to be addressed. • Sample demographics of potential members. • Overall structure of the potential plan. Once we have this information compiled, we will be able to submit a findings report to your board of directors with our suggestions on how to move forward based on the response from the general membership. EXPECTED TIMELINE ON DELIVERABLE FROM STAGE 1: 1-2 Months
The Next Step: Stage 2 STAGE 2: Provided we are granted approval to continue, we would then create a focus group with the interested members to begin to fine tune an offering for your group benefits association plan. Once the offering has been decided upon, Wentworth Financial would market the plan to all major carriers within Canada and create a final report showcasing the best offerings in terms of rates and available coverage which would be submitted back to your board of directors for final approval. EXPECTED TIMELINE ON DELIVERABLE FROM STAGE 2: 2-4 months from project start date.
The Next Step: Stage 3 STAGE 3:With final approval granted we would then be able to put the plan in place and begin a cycle of heavy recruitment to maximize the benefit and strength of the association plan. EXPECTED TIMELINE FOR PROJECT COMPLETION: 4-8 months from project start date.
Questions? Questions?
