The most recent tariffs imposed by the Trump administration are the talk of the town in the business world—but how will they impact the insurance industry?
At first glance, these policy changes might seem most relevant to manufacturers, and importers, but insurance agents, specifically those offering health and business insurance policies, should pay close attention.
Since tariffs affect the bottom line for small businesses, individuals and families, it’s your responsibility to be a trusted advisor, guiding them through their options, so they can stay protected. Before doing that though, it’s crucial to understand how these economic shifts affect your prospects, current clients, and sales strategy. Let’s take a look.
What Do the Tariffs Mean for Small Business Clients?
When thinking about our small business clients and prospects, it’s crucial to evaluate how the tariffs are impacting their operations. Since tariffs increase the costs of imported materials and goods, for small businesses, this often means:
- Higher Operational Costs: When the costs of supplies increase, for businesses this means overall profits are taking a hit. To make up for the losses, owners are forced to reallocate funds from certain areas of their operation to others.
- Less Cash Flow: On a similar note, the cost increases may also cause delays in payments for less pressing areas. This could include insurance premiums and other insurance-related costs.
- Reduced Spending on Employee Benefits: With financial pressures at an all time high, some businesses may consider less expensive benefit plans, or scaling back supplemental perks.
While none of the above sounds great for insurance agents, believe it or not there is a silver lining! As businesses reassess their budgets, an opportunity to help them navigate these changing needs presents itself. By offering key insights, and comparison tools, you can effectively help them find coverage that meets their needs and financial preferences.
Anticipate More Questions and More Comparison Shopping
As businesses and individuals start to feel the financial pressures, they’re more inclined to look at their expenses under a microscope. Since insurance is a service that most pay for on a monthly basis, it’s often one of the first areas that gets audited. By anticipating the concerns of prospects and current clients, it’ll be easier to address their pain points effectively. Here’s what you may see:
- More Quotes and More Comparisons: In the past, some clients may have been quick to choose the first plan that presented comprehensive benefits. Now with more financial concerns, you can expect individuals and businesses to want to explore all of the options at hand. By having an in-depth understanding of all of their options, you’ll position yourself as a knowledgeable industry expert.
- A Balance of Cost and Coverage: When evaluating potential plan options, affordability is now more important than ever for the average consumer. With that said, in addition to being well-versed in plan benefits, be sure to keep cost-saving aspects in mind, as this is a major selling point.
- Short-Term Decision Making: Many agents use the phrase “long-term planning” in their pitches when it comes to insurance coverage. While we shouldn’t forget this altogether, there will likely be a shift in thinking, as many consumers start to prioritize the here and now. In terms of coverage, this could mean clients choosing lower monthly premiums over long-term value.
Pro Tip: Come to meetings prepared with up-to-date carrier information and side-by-side plan comparisons. Additionally, while it’s important to provide clients with affordable coverage options, be sure to educate them on the hidden costs that come with alternative plans.
How Health Insurance Agents Can Add Value
With costs rising for goods, materials and services across the board, both individuals and group clients are reassessing their insurance needs. For agents, now is the time to step in with flexible solutions that focus on maintaining stability while the economy starts shifting.
For Group Health Clients:
- Offer Alternative Plan Options: Less traditional employer-sponsored plans can help business owners manage costs while still providing essential benefits. Consider adding options like HDHPs (High Deductible Health Plans), HRAs (Health Reimbursement Accounts), level funded plans, and self-funded options to your sales pitches.
- Emphasize Preventive Care and HSAs: In addition to offering cost-friendly plan options, highlight other ways employers can help manage employee costs. This includes plans focusing on preventative care services (routine doctors visits, regular exams, vaccines, etc.) which help keep teams healthy and claims low. Health Savings Accounts (HSAs), are also a great addition to many health plans, helping employees to pay for high out-of-pocket expenses.
For Individual Clients
- Customized Plan Recommendations: Similarly to group health insurance, agents offering individual or family coverage should think outside of the box in terms of affordable client alternatives. In addition to HDHPs serving as an affordable option, explore subsidies, tax-credits, or even off-exchange options if applicable.
- Keep In Touch: While it’s always recommended to keep in contact with clients throughout the plan year, it’s even more crucial now that there are so many question marks revolving around the economy. Reach out to clients on a regular basis, making sure that their plan is a good fit for them as their budget changes.
How Business Insurance Agents Can Prepare
Businesses across the country are facing a number of challenges in connection with the tariffs. These include rising equipment and material costs, supply chain disruptions, and new supplier partnerships, all of which add new risks to the equation. For agents focusing on business coverages like commercial property, liability and business interruption, there are a few points to keep in mind:
- Reassess Coverage Limits: As the costs of machinery, equipment and materials go up, current policies may not account for the added expenses, leaving owners underinsured. Be prepared to discuss updates to policy limits, if clients haven’t made changes themselves already.
- Address New Risks and Liabilities: Businesses who begin to work with new vendors, partners, and transporters will likely encounter new sets of risks, since every company operates differently and has unique regulations. It’s important to hear out your clients’ concerns and face them with finely-tuned solutions. This could mean simply increasing a policy’s limit, or finding an entirely new plan.
- Leverage Industry-Specific Knowledge: Learn about the specific challenges that particular industries are facing. For example, retail and manufacturing businesses are two sectors heavily impacted by tariffs. By showing that you have a deep understanding of problems these types of companies are facing, you’ll be able to stand out from competing agents.
Final Thoughts: Uncertainty Presents Opportunity
The uncertain economic times are frightening for many businesses and individuals, but you can help by providing cost-friendly solutions and a chance to restructure outdated plans.
By understanding the concerns of your clients, offering non-traditional alternatives, and using comparison tools, you’ll stand out as a strategic partner. Don’t think of your products as another bill clients have to justify, but instead as a smart investment that provides financial protection when they need it most.
Work with Benepath!
If you’re worried about the economic uncertainties having a negative impact on your book of prospective clients, Benepath is here to help! For over 20 years we’ve led the insurance lead generation space, helping connect agents with consumers looking for comprehensive coverage, and we want to help you too! We offer high-intent leads in the following verticals: individual health, group health, and business insurance.
To learn more, simply fill out our contact form on the righthand side, or give us a call today at (888)-684-3121.
