If there is one thing that is consistent within the group and voluntary benefits market, it is that nothing is consistent. From year to year, market changes make it very difficult for insurers to get settled into a comfortable framework for moving forward.
Consider what insurers have to contend with:
- Shifting mandates and regulations within the Affordable Care Act.
- An increasing number of benefit administration firms and benefit enrollment partners.
- Employer interest in increasing the number and type of voluntary benefits to produce well-rounded packages.
- Employer requests to administer products and billing in ways that fit their systems and processes.
- Increased need for accessible reporting so HR departments can track usage within their employee populations.
- Market saturation from companies wanting to enter the voluntary and worksite space.
Though we can't cover solutions to all of these in this blog entry, we can quickly look at strategies that make sense with the increasing number of players in the market.
In the past, carriers had a very close relationship with the employer market. Because of the complexity of employee benefit communication, especially in the large employer market, employers are engaging benefit administration firms and benefit enrollment partners. These partners will often offer a free or subsidized service; they bring relationships to the carrier and earn commissions that offset enrollment cost for the benefit partner.
The key benefit partners in the industry have begun to integrate with carriers before the sale. This allows a benefit partner to offer multiple carrier products for a single employer. Further, this will help ensure that the communication between the benefit partner and the carrier is predictable. Because brokers and benefit partners are, more than ever, responsible for bringing the benefit relationship to the carrier, integrating with them is as much a strategic need as it is an efficient way of transferring data.
Insurers are attracted to the group market because one sale means hundreds or thousands of premiums. Catering to and selling through brokers and benefit partners takes that multiplication to exponential proportions AND supplements an insurer's own sales efforts. But many brokers will only carry lines of business that are simple to administer and prepared for the higher volume from a wider array of companies. Both of those questions are answered with technology solutions.
Most insurers are by now familiar with shifting sales channels. The difference in this case is that group benefits providers need to prove their abilities to meet employer needs and remain flexible to broker requests. In this and other areas, insurers need to prepare their systems for the future by building a foundation that is solid and proven, yet agile enough to handle the market's unpredictability.