Traditionally, employer clients have looked to their insurance brokers and brokers have looked to general agents (GAs) or carrier sales representatives for information on the best rates and products.
But client questions are increasingly shifting to technology matters.
Employers offering group benefits to their employees are now as curious about the features and capabilities of the technology used by carriers and ben-admin systems as they are about their rates. And according to a recent study by Ease, 50% of employers sourced their benefits technology from a broker. That new emphasis puts brokers -- and GAs -- in the unfamiliar position of tech advisers, intermediaries between clients and vendors.
That’s what we learned from a recent webinar with representatives from a leading brokerage and general agencies. Technology is transforming insurance, an industry that has traditionally lagged behind others in its adoption. It appears that this new prioritization is driven by clients demanding the same modern experiences, interoperability and ease of use from their insurance carriers that they have in other business functions and personal consumer experiences – also known as the “Amazon Effect.”
For clients, easy data exchange is everything; in fact, 66% of employers prefer carriers that connect to their software over those offering the best-value insurance products.
What’s going on with benefits technology today?
The role and versatility of technology is quickly advancing, due in part to the changes brought on by the pandemic and its new work models, as well as by clients and their employees’ expectations. Employees want to better understand their insurance benefits and have benefits experiences that help them use these valued assets in easier ways, which are essential pieces of their total compensation.
Employers are eager to provide modern, differentiated benefit experiences to retain and attract workers, and improved technology is necessary. According to a recent report by Guardian, 79% of employers expect to increase their spending on benefits technology in the next three years.
To get the desired result, clients need a digital benefits strategy, one that will not only please workers but help employers become more efficient and control costs by lessening administrative burdens, reducing manual transactions and addressing compliance. The optimal technology should reduce administrative costs by automating functions now done by people.
The demand for this new technology isn’t only from large clients; small employers also want tech that will allow their various systems -- such as payroll, ben-admin, COBRA and cafeteria plans -- to interact seamlessly.
See also: Why Brokers Should Embrace AI
Where should benefits technology go next?
The panelists want the industry to emphasize investments in speed and accuracy, with a focus on getting insurance cards in new members’ hands as quickly as possible with no glitches or delays. That requires automating the process to minimize or eliminate the manual tasks that slow things down and introduce the possibility of errors.
In addition, brokers must be sure they’re up to speed on the latest industry technology, who offers what, and how different systems interact. If brokers don’t know how to deliver the tech experience their clients want, their clients will find other brokers.
Another point of emphasis was the importance of adopting technology that could help produce clean, accurate data right off the bat -- from the beginning of the process. Too often, insurance enrollment data is unavailable, incomplete or inaccurate. Incorrect data must be fixed at some point, which comes with a high cost in time, labor and strained relationships among sales teams, brokers, groups and more.
See also: AI and the Future of Independent Agents
What do brokers want from ben-admins and carriers?
At the top of their wish list for carriers is application programming interface (API) integration for every policy to allow a single point of entry and an easy bi-directional flow of data so manual intervention is no longer required. There has been progress in this area, but fewer than 15% of carriers now offer it. The need is particularly great for medical insurers.
From ben-admin platforms, the request is to add technology to make their systems flexible enough to accommodate and merge data from multiple sources and handle employers’ increasingly complex benefit structures.
The brokers also requested that carriers and ben-admins focus on speed-to-market for products, simplicity, improved communication and easy data flow among all parties. This, they noted, would allow brokers and GAs time to have the strategic conversations that bring the most value to their clients.
As thought leaders and change agents in our industry, we regularly convene experts to get at the important nuggets in our industry. Talking with leaders like our panelists is a great way to assess where the industry stands and where it needs to be.