A key theme at LIMRA’s recent Group and Worksite Benefits Conference was how carriers could adapt to the disruption swirling about the insurance industry in the form of new entrants, market forces, customer expectations, products, and processes. What are the impacts on the benefits sector?
Speakers referred to some relevant examples. The recent announcement by behemoths Amazon, Berkshire and JP Morgan about collaborating to tackle rising medical insurance costs had a significant impact on the market cap for major insurance carriers on the day of the press release. At the other end of the scale, start-ups like Lemonade are disrupting the way consumers approach purchasing insurance.
Group insurance carriers find themselves in an interesting predicament. They have to keep track of overall insurance industry change and disruption and understand its potential impacts in a uniquely complex value chain. In that value chain, they need to maintain healthy partnerships with many entities.
The perennial question of who is actually a customer for a group insurance carrier prevails: is it the employer, employee that is covered or is it the broker and benefits administrator? Each has an important role to play, and the carriers have to have the flexibility and tools to maintain a healthy relationship with each. The ability to facilitate these relationships will make insurers less vulnerable to unwanted disruption.
Are we innovating in the right direction?
Yes, we are in a heavily regulated industry and barriers to entry are still high. Incumbents have an edge. Yet carriers who can innovate to address disruption have a greater edge. I have personally seen quite a few carriers investing heavily on innovation by establishing test labs and delving into the tools for the future.
My concern is are they focusing on modernizing the underlying capabilities that will help them scale these innovative ideas and tools in the near future to satisfy all partner/customer expectations and keep new entrants at bay. From quoting, pricing, underwriting, policy issuance, undergoing policy administration to billing and claims, if all these processes and capabilities are not streamlined and connected, data inconsistencies remain in place at the most basic level. A stronger focus on building a unified enterprise platform is necessary.
Digital experience is out front, with millennials in the lead
In a number of sessions, there was discussion about how the workforce is changing. There are up to five different generations in the workforce today. Each generation has different needs, but one common desire is to have information at their fingertips, with millennials—understandably—leading the way. This points to the need for insurers to invest in digital capabilities that enhance their digital footprint. This is an area where group insurers struggle mightily on account of the complex value chain and lack of system integration within it. But new API-centric user experience frameworks can facilitate integration and generate and manage the persona-driven, omnichannel digital experiences needed.
Automating renewals with AI/ML
There was a lot of discussion among attendees around AI and machine learning (ML). One of the many use cases I can think of is where certain blocks of group business go through automatic renewal. Using enhanced decision-making capabilities with ML engines reduces the time and effort to process these renewals. Having all the information about the customers in the block – from policy provisions, census and demographic information to historical claims and premium information – quickly integrate with the ML engine to bring back the decision and issue out a proposal will streamline the process immensely. This, of course, is not possible without an end to end system that can provide rapid access to internal and external data as required.
Strategic enrollment partnerships
On a final note, there is always a lot of talk at LIMRA group benefit events about enrollment and benefits administrators and the amount of energy being spent to ensure the various parties get things right and make things work. In one of the sessions, it was mentioned that carriers should move from tactical to more strategic partnerships with one or two benefit administrators. This is a good idea as it allows for effective onboarding of a new customer and improves overall customer service. Having a modern platform with built-in enrollment APIs (for initial, annual and ongoing member changes) out of the box should help carriers manage these strategic partnerships. More thoughts on this can be found on my blog that was written after the enrollment session earlier this year.
Vinod Paluri is a product executive at EIS Group responsible for the PolicyCore solution.