Block strategy lays foundation for a successful book

You see her at insurance industry events accepting awards. Each time you log onto LinkedIn, you encounter yet another post about how she's "honored" to be considered for yet another opportunity, "humbled" to be trusted with additional responsibility. What's the secret to this rival broker's success (and potential hubris)? She's most likely mastered block strategy — and you can, too!

A block strategy is an approach in which a broker moves beyond isolated deals to build scalable, strategic momentum with the right employers — all under one aligned carrier or program strategy, often used with captive structures. Indeed, savvy brokers are reshaping their entire book and market success with coordinated, high-performing blocks. 

Block strategy offers a myriad of benefits for brokers and employer clients alike. Brokers accelerate their book growth by moving multiple clients from underperforming models into a high-performing model, like a captive, with a common strategy. Instead of managing multiple fragmented programs, brokers streamline administration, vendor coordination and cost management across clients with the help of sophisticated analytics. Alignment across underwriting, vendors and plan design drives better outcomes at scale.

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From clients' perspective, joining like-minded employers under one captive structure reduces volatility, amplifies performance and enables volume purchasing power. A block creates more predictable risk and cleaner data sets, leading to stronger underwriting terms and renewal leverage. Reaping benefits as a unit fosters cohesion, with groups in a block being more likely to buy into the strategy — creating a sense of shared ownership and long-term alignment.

You might already be well-positioned to embrace block strategy. Review your book and look for four or more employer clients that, combined, account for over 1,000 enrolled employees and over $2 million in gross written premiums, as this is the smallest "sweet spot" for pricing leverage and performance momentum.

Before aligning these clients under a captive, you'll want to ensure they're aligned philosophically. Cohesion is easier if these clients already share cost management values, risk tolerance or a funding strategy with other group members. Ask yourself: Have these clients expressed dissatisfaction with fully insured plans, underperforming level funded arrangements or fractured captives? Finally, are they equally committed to managing addressable and avoidable risk and prepared to collectively purchase for a multi-year return? A captive manager can help you pinpoint ideal groups, evaluate clients' preparedness for a block arrangement and design a smart strategy that serves your group long-term and sets the foundation for ongoing book growth.

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Delivering more value to clients can result in higher payouts tied to performance, persistence and scale. Embracing a captive approach with proven results can be the leg up you need to get ahead in a competitive landscape. Easy to replicate and refine through experience, one successful block can serve as a launchpad for continued success.

Adopt block strategy and the next time you encounter that rival broker, it might just be at the top.