Question

Blue Cross Blue Shield of Florida (Florida Blue) has begun opening retail health insurance "stores" around the state. Florida Blue has historically and continues to rely on intermediaries (agents, brokers, wholesalers) for their sales. In fact, 95% of their sales are through these channels. The stores are designed to make it easier for individuals and small business owners to purchase health insurance plans. They also provide convenient, face-to-face answers to complicated questions about health insurance benefits, value options and financial protection. When Florida Blue realized that customers want to work with professionals rather than trying to do it themselves on the internet, the stores seemed like a great new distribution channel. But, Florida Blue also respects and needs its brokers and the value that brokers and agents add -- face-to-face consultation -- and fear that opening the stores might be perceived as direct competition and alienate them.

Did Florida Blue do the right thing opening these stores at the risk of upsetting their traditional intermediary channel partners? Why or why not?

How seriously should Florida Blue consider the threat of a broker backlash due to the stores?

What could Florida Blue do to reduce the backlash from their brokers who may be threatened by BCBSF opening its own store?

Answer 1

Florida blue did the right thing by opening these stores it can have stores as well as brokers combination

Florida blue since opened the new stores killing the traditional way of doing business would help florida blue for market penetration, it would help them to get more customers than before and would also help to generate more revenue though setting up new stores will need some investment however in the long run it will be beneficial for florida blue, all these stores would help customers as well as it will solve their grievances as and problems they are facing so it will be more accessible which will help florida blue to gain new customers at the same time and it is the need of the hour to cater different customers in different locality to increase customer base as well as generate more revenue which ultimately achieves goal of profit maximisation.

There will not be much threat from broker backlash because of these stores, that ultimately brokers will not give any leads which would be a problem but that will be taken care from the new stores as it will get some new customers, or at the same time florida blue can have stores as well as brokers combination of both which will be win win situation for both of them also they can also hire some of the brokers as their new agents as they will be perfect fit for it, apparently it will help to maximise the revenue and that way can enter into new untapped markets so this way florida blue can reduce the backlash from brokers.