It does not matter what happens to Zenefits, the company.
Whether Zenefits survives is immaterial. What is important is that Zenefits has changed the value proposition for the health insurance brokerage industry once and for all. As a result, of Zenefits offering commercial customers free HR software customers expectations of what they should expect from their health insurance broker has fundamentally altered.
Just as UBER has changed the landscape of the taxi industry forever, the advent of Zenefits has changed the health insurance broker value proposition.
There may be some that are breathing a sigh of relief watching the powers that be come down on Zenefits. My advice is don't rest on your laurels. This is only the beginning of the change. If it is not Zenefits, it will be somebody else, but this is not the time for complacency. Now is the time to contemplate a future where spreadsheets and MS Access long the tools of choice for brokers from Miami to Seattle are no longer going to hold up. Now is the time to review the software provided by the incumbent Agency Management System vendors and ask is this going to sustain my firm in the long hard battles ahead.
One only has to look to the email sent out by the new Zenefits CEO, David Sacks, for the reasons why traditional brokers need to re-evaluate their tool set.
"This is a great market for us because (1) it's huge (with many million small businesses in the US); (2) it's "greenfield" (meaning that it's under-served by technology — in fact, an Excel spreadsheet is often the main competitor); and (3) the free aspect of our product is extremely compelling."
The good news is the massive advances in cloud computing have created a technology landscape where traditional brokers now have access to tools that even large multinationals would have struggled to develop only five or so years ago.
The problem is that with choice comes responsibility. Brokerage managers now face a challenge regarding ensuring they bet on the right horse going forward. Just as one can make the right choice with the flick of an AMEX card, one can also do the wrong thing and in a world of Zenefits and UBER, the repercussions can be devastating.
So how does one prevent oneself becoming the next Blockbuster? Who has time to rifle through the new product announcements that seem to litter the tech blogs on an hourly basis. Well, one makes sure one selects the right advisors and by advisors, I don't mean your Agency Management System vendor. What the industry needs now more than ever is good, honest advice because if I am certain of only one thing, it is that there are going to be winners and losers over the next eighteen to thirty-six months. The only unknown is who will make up which list.