By: James Ocampo, Executive Vice President, Wellfleet Workplace
The future of voluntary benefits is one of strategic technological transformation. It’s a future that embraces cloud-based ecosystems and digital disruptors to help improve the customer experience and the bottom line for carriers and their broker partners.
‘Big Data’ is a buzz phrase that’s been around for some time and a concept that companies are still struggling to leverage because of technological limitations. A major part of this struggle can be attributed to ‘legacy’ systems (outdated computer systems and applications). That’s why IT architecture and systems integration are at the forefront of the future of the voluntary benefits market.
APIs and flexible system integrations
As companies evaluate existing technologies, they’re running into limitations around what interactions can take place, which is why a strong focus on systems architecture is so critical. Carriers that can’t effectively exchange data with internal and external systems face long turnaround times and open themselves up for errors that often run downstream. One place you might see this is when enrollment data doesn’t sync with claims or billing data, leading to negative implications for the employee, employer and broker.
When systems are developed with an open architecture (one that makes it easy to add, change or replace new connections, software or hardware), one is able to partner with any chosen entity—present and future. Further, it creates a system that is highly scalable and platform-independent.
Developing an open architecture should include the use of APIs. When strategically using APIs it becomes easier to integrate new partners as needed.1 This eliminates the need to maintain multiple versions of code and enables secure transactions in real-time. In other words, say ‘goodbye’ to batch processes and ‘hello’ to real-time processing.
Compounding the importance of flexible and open systems architecture is the need for cloud-based technology.
The COVID-19 pandemic served as a catalyst for companies to re-evaluate their IT strategies. You and I are living in a world that is experiencing radical changes in technological advancement. However, this rapid growth can only be sustained if done at scale. Therefore, we’re seeing a rapid growth in cloud-based systems that include a mix of components, such as ’Infrastructure as a Service’ (Iaas), ’Software as a Service’ (SaaS) and ’Platform as a Service’ (PaaS).
This is because the adoption of these systems helps reduce expenses, improve collaboration and broaden capabilities.2 Perhaps most important in the insurance industry is the fact that clouds are always on. Since systems don’t experience downtime, enhancements and upgrades that meet customer needs can be rapidly released on a more frequent schedule and not interrupt the moments that matter in the customer journey such as enrollment and claims submission.
Artificial intelligence and the customer experience
I also see a greater emphasis on ‘AI’ and predictive analytics to empower the end consumer. From the underwriting process to claims handling, emphasizing personalized interactions should be a top priority.
Voluntary benefits cannot be looked at as one-size-fits-all coverage. Carriers need to focus on engaging the customer for long-term growth and persistency. This starts with leveraging customer data for year-round engagement, which helps keep benefits top of mind during open enrollment.
To support this, algorithms should be designed to provide decision support for consumers as they are navigating the buying journey. This should include the delivery of personalized, real-time product advice based on the customer’s unique demographics and circumstances.
AI is all about improving the customer experience and building consumer confidence. Carriers will need to adapt to and deliver on those benefits to continue to win customers over.
Robotic process automation
As we improve our ability to store, analyze and harvest big data, we increase our ability to scale operations. Technology and data science enables insurers of all sizes to identify opportunities for improvements to processes and resource allocations.
One place where carriers, particularly those with legacy systems, can gain quick wins, is through robotic process automation or “RPA”.3 By identifying high volume, rules-based processes, leaders can reduce or eliminate tedious tasks, which improves the customer experience and allows staff to focus on higher value work. Areas where insurers could leverage this successfully include state filings, claims handling and website chat-bots.
In an always-on world, RPA technology helps improve business process by enhancing the customer experience 24/7. Further, RPA processes can drive positive ROI in quarters, not years, by reducing training costs and IT resources, and utilizing streamlined software migration.
Changing platform ecosystems
I believe employers and brokers are looking for marketplaces where the buying experience is deep, simple and personalized. By that I mean, deep in product offerings, with simple, intuitive features, and personalized communications throughout the customer journey.
Consumers have been trained to go to one place to get the answers, products or services they desire. We all know Amazon. It’s a marketplace that brings buyers and sellers to one platform. Consumers can get a range of goods, cloud-computing services for their businesses, and a world-class experience. Although there are multiple platforms and companies involved in these purchases, the customer is unaware of all the moving parts behind the scenes.
What makes this a great experience? For starters, the customer can quickly make an informed purchase decision – with the help of product overviews, videos and customer reviews. Further, they can transact easily – pay for, return, refund, etc. – without a need to re-enter pertinent information. In most cases, it’s a matter of one or two clicks. Lastly, they receive personalized recommendations based on their demographics, buying behavior, and the products and services owned.
Group carriers need to take note and plan for how they can play in a similar digital ecosystem. Getting there will depend on the available resources, strategic vision and level of commitment. This drives home the need to orchestrate an ecosystem that goes beyond the open enrollment space for core medical and voluntary products. It’s time to dream big. What if employees had access to a system that brings together services related to financial well-being, like health insurance, medical services, employee benefits programs, banking and retirement services?
Rise in Insurtech
Helping drive this change is the rise in Insurtech companies. With a growing focus on product flexibility and consumerization, legacy carriers are falling behind. This is mainly due to technical debt and the high cost associated with addressing customer needs. To address those barriers, we’re seeing much of the current market growth and modernization at larger carriers happen through acquisition.
When you look at the record amount of venture funding in the Insuretech space4, you can see that carriers are feeling the pressure to do things differently. Because of the multiple layers within most enterprises and the huge investment required to incorporate these new digital players, identifying technologies that enable true differentiation in the market will be critical.
Digital first for the future
Finally, the need for digital tools and purposeful user experiences will be greater than ever. Since the COVID-19 pandemic, more employees are working from home. In fact, according to a McKinsey survey, 58 percent or Americans now work from home at least one day a week.5
Add to that how the ‘Great Resignation’ has made remote working table stakes in employee recruitment and there will no doubt continue to be a greater need to accommodate for virtual touch points for all stakeholders — from virtual meetings with brokers and their clients, to benefits fairs and meetings to aid in assisting remote and gig employees.
We live in a world where consumers have higher expectations of the companies they do business with. They need to feel they can trust these businesses that their information is safe and that they’re receiving good value for the money spent, especially when it comes to intangible goods. So, in addition to providing security measures to safeguard customer information, we need to provide personalized experiences across their journey. Systems should be developed to quickly provide solutions and proactive recommendations across a customer’s portfolio of products to enable positive future outcomes.
Even before the pandemic, we believed the future of workplace benefits was very much technology-driven. Now it’s more apparent than ever that to thrive moving forward, we need to be engaging our customers and investing in the technological advancements we’ve all come to expect in every other facet of our lives. If you create too much friction or it’s hard to do business with your company, consumers are just going to go someplace else.
Visit WellfleetWorkplace.com, to learn more about Wellfleet and its customer-centric approach to products and technology.
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About the Author
As EVP of Wellfleet Workplace, James Ocampo focuses on driving strategy, execution and providing financial leadership for the division. He holds an undergraduate degree from Boston College, and an MBA in Finance and Strategy from The Wharton School at the University of Pennsylvania.
Wellfleet is a Berkshire Hathaway company focused on protecting people against risk throughout every stage of life — from birth to grade school, college, the workplace and beyond. Wellfleet’s Workplace division delivers customizable, digitally-forward benefit solutions through a suite of employee benefit products, including: Accident, Critical Illness, Hospital Indemnity and Short-Term Disability Income insurance. For more information, visit www.wellfleetinsurance.com