Many of us are preparing for the worst case scenario in the next few years, which is IFP commissions going away. There is certainly anecdotal evidence that commissions will continue to be reduced and possibly eliminated.
At the same time, though, there is some significant investment money behind the larger companies in this space. eHealth is public and their primary revenue stream is IFP, companies like Health Sherpa and GoHealth are VC backed (Health Sherpa has Kapor Ventures, founded by Lotus founder Mitch Kapor, one of the legendary figures in the beginnings of the commercial software business). I'm sure there are others as well.
If I take a dispassionate perspective on this, I have to come to the conclusion that none of the VC investments would have been made had there been anything turned up during the due diligence investigation that indicated commissions would be ending. eHealth, while having the usual Risk Factor indication about commissions 'could be reduced or eliminated' (along with 50 others) is really counting on IFP even though it is expanding its Medicare business.
Disclosure: before getting into the insurance business I had mergers, acquisitions, and venture capital experience with companies I worked for or with-the due diligence process for the lead investor is very extensive and these investments, while having risk factors, have to pass with flying colors.
So, with all of that being said, are our businesses truly at risk in either the short term (or long term) or are we just so used to getting beaten over the head that we have just come to expect the worst?
At the same time, though, there is some significant investment money behind the larger companies in this space. eHealth is public and their primary revenue stream is IFP, companies like Health Sherpa and GoHealth are VC backed (Health Sherpa has Kapor Ventures, founded by Lotus founder Mitch Kapor, one of the legendary figures in the beginnings of the commercial software business). I'm sure there are others as well.
If I take a dispassionate perspective on this, I have to come to the conclusion that none of the VC investments would have been made had there been anything turned up during the due diligence investigation that indicated commissions would be ending. eHealth, while having the usual Risk Factor indication about commissions 'could be reduced or eliminated' (along with 50 others) is really counting on IFP even though it is expanding its Medicare business.
Disclosure: before getting into the insurance business I had mergers, acquisitions, and venture capital experience with companies I worked for or with-the due diligence process for the lead investor is very extensive and these investments, while having risk factors, have to pass with flying colors.
So, with all of that being said, are our businesses truly at risk in either the short term (or long term) or are we just so used to getting beaten over the head that we have just come to expect the worst?