Efficiency in scale: why Centers of Excellence are rising

Benefits placement is becoming increasingly complex due to rising healthcare costs, stricter compliance requirements, and the growing number of point solutions available to employers. To stay competitive, brokerages must operate efficiently and deliver consistent, high-quality service across all regions.

This is where a Center of Excellence (CoE) comes in. A CoE centralizes key processes, enabling brokerage firms to streamline their Request for Proposal (RFP) operations, reduce errors, and improve client outcomes. Centralizing benefits placement improves consistency and operational efficiency for regional brokers with 5 to 10 locations or national firms with dozens of offices. This model ensures that brokerages deliver expert consultation and easily navigate the benefits landscape's growing complexities.

What is a benefits placement CoE?

A Center of Excellence (CoE) in benefits placement is a centralized team dedicated to optimizing the placement process and improving brokerage operations. Think of it as an internal general agency that serves individual brokerage offices, providing expertise, standardized processes, and centralized support.

Core functions of a benefits placement CoE:

• Expertise: develops deep knowledge across product lines (e.g. stop loss, non-med) to ensure competitive placements
• Efficiency: centralizes RFPs and renewals, reducing turnaround time and minimizing errors
• Collaboration: fosters better relationships with carriers by streamlining communication and aligning placements with business objectives

The business case for building a CoE

A benefits placement CoE offers brokerages more than just operational efficiency—it can become a profit center that drives revenue and elevates the firm’s competitive position. This can be achieved in the following ways:

Revenue opportunities: supplemental compensation

• Many brokerages use a CoE to consolidate premium volume and negotiate override fees from carriers.
  • For example, brokerages create carrier panels with 8-12 carriers and negotiate 5% override payments on premiums, giving carriers access to large volumes of business.
• Carriers participate to avoid the risk of being excluded from significant business volume, which motivates them to accept these terms. In exchange, they stand to win large volumes of business in an efficient manner.

Operational efficiency: consistency and expertise

• Centralized operations ensure standardized processes, reducing the risk of errors during spreadsheeting and enabling faster implementation, which leads to quicker decision-making.
• A CoE allows brokerages to leverage data insights and make data-driven decisions more effectively.
• Firms with a CoE often improve turnaround time and negotiate better rates by providing complete, high-quality RFPs, which carriers then prioritize.

Cost savings and client experience

• Standardized work flows not only improve efficiency but also reduce operational overhead. We’ve observed national firms reduce the headcount need to manage the placement process from hundreds down to 5-7, and regional firms from dozens down to just 1.
• Clients benefit from consistent service delivery and expert advice, improving retention rates and satisfaction.
• In many instances, firms using a CoE have a significant reduction in processing errors, leading to smoother placements and better client relationships.

The average CoE manages 500+ employer groups and $250 million in annual premium. While stop loss is often the entry point for many firms, once successful, they expand into non-medical lines of coverage.

Key advantages of a benefits placement CoE

1. Data-driven insights
   • A CoE collects and analyzes data across multiple clients and carriers, providing valuable insights into emerging trends, risk management strategies, and forecasting.
   • Data analytics provided by a CoE can reveal trends in stop loss renewals, enabling brokerages to proactively manage renewals and prevent coverage lapses.
   • McKinsey research shows that data-driven firms make faster decisions and achieve better outcomes.
2. Standardization and compliance
   • A CoE formalizes best practices and ensures regulatory compliance across all placements. With standardized processes, brokerages can more easily adapt to ACA requirements and industry regulations.
   • PwC highlights that CoEs allow companies to manage risks more effectively, contributing to a robust governance framework, allowing brokers to adapt to new regulations and minimize exposure to regulatory scrutiny in a streamlined manner.​
3. Scalability for growth
   • With a CoE in place, brokerages can scale efficiently-whether expanding into new markets or managing more complex employer needs.
   • National firms that centralize placement with a CoE are more likely to have smoother transitions when entering new markets, with fewer bottlenecks and quicker turnarounds.

Overcoming common challenges in building a CoE

1. Addressing the "bottleneck" issue
   • While a CoE improves efficiency, it can create bottlenecks if brokers rely too heavily on a central team. ThreeFlow’s platform helps mitigate this risk by enabling direct relationships between carriers and brokers, while still giving brokers control over placement decisions.
2. Managing upfront investment
   • Building a CoE requires upfront investment in technology, training, and staffing. However, the long-term ROI outweighs these costs by reducing operational inefficiencies.
3. Overcoming cultural resistance
   • Centralizing operations may face internal pushback from regional brokers accustomed to independent workflows. To overcome resistance, leadership can highlight quick wins-such as improved client satisfaction-and emphasize the long-term benefits of standardized processes.
   • Rolling out a formal change management framework can help to smooth the transition.

Preparing for the future

Building a benefits placement CoE is no longer optional-it’s a strategic necessity for brokerages seeking to scale operations, improve efficiency, and deliver consistent service. A CoE helps brokerages stay competitive by:

• Centralizing expertise and streamlining operations to reduce errors and improve decision-making.
• Creating new revenue opportunities by negotiating supplemental compensation with carriers.
• Future-proofing operations to adapt to regulatory changes and meet evolving client needs.

How ThreeFlow can help

ThreeFlow enables brokerages to implement CoE practices seamlessly, ensuring compliance, scalability, and efficiency without sacrificing control. With features like:

• Predictable, repeatable workflows that reduce turnaround time.
• Compliance tracking through automated disclosure tabs.
• Usage and performance reporting to measure placement activity and ensure accountability.

Contact us today to see how ThreeFlow can help your brokerage centralize benefits placement.