Thirty-three percent of survey respondents have admitted they are considering getting out of the health insurance business entirely because of Obamacare.
“I think the time of the independent agent may be coming to an end,” one of the respondents told McKinsey.
“I think there is going to be an exodus of agents over the next 5 years,” said another to the surveyors. “Folks will slowly retire or partner with larger firms.”
To add insult to injury, twenty-nine percent of independent insurance brokers claim their businesses have been hindered by Obamacare, according to a recent survey conducted by McKinsey & Co.
The survey was comprised of responses from over 1,000 independent brokers during Obamacare’s first ‘open enrollment’ period from October 2013 to April 2014.
An additional twenty-three percent of respondents said they are particularly worried about ‘premium stability’ for customers, while another sixteen percent mentioned issues relating to the long-term financial health or ‘sustainability’ of Obamacare.
One question that appeared on the questionnaire was ‘if business is worse, what changes are you making, if any, to improve your business?’ The top three responses were: ‘changing focus to other segments/products,’ ‘investing in marketing’ and ‘investing in customer service’ with the first receiving the largest percentage by far.
Moreover, the independent agents identified ‘educating consumers / clients due to their lack of understanding of the ACA,’ ‘investing time and resources in customer service activities that may not directly translate to sales’ and ‘helping consumers / clients complete the enrollment process,” as the top three issues with the ACA’s impact on business during the open enrollment period.
Hundreds of respondents said they spend sixty-five percent of their time either completing administrative tasks such as collecting customer information or answering questions that, once answered, the customer would likely never ask again.
“There has been a 300 percent increase in time spent sharing information compared to the past — about three hours per enrolled life,” one broker told McKinsey.
Perhaps the largest deterrent for independent insurance brokers relates to the amount of growth they expect to see in the future. Less than five percent of respondents thought they would experience over fifty percent growth as related to group conversion to individual plans.
