November 16, 2015
Integrating Group Life and Voluntary Benefits
Data integrity can be a real problem because of the variety of life insurance programs. A fresh start might be the right approach.
Group and voluntary benefits providers vary in a hundred different ways. If you are a supplementary benefits provider that only provides one product to the group market, your data integration issues with multiple brokers and employers may still be complex. The more products you sell into the group and voluntary space, the more difficult your data integration will be.
Let’s say that your organization carries group life, voluntary supplemental life, dependent life, LTC and AD&D products. Without modernization, it is likely that your organization will have several hurdles to surmount. The first is to develop one consolidated repository from all of the data that is likely held on multiple systems. The second is to make that set of data available to the many different people and institutions that have a vested interest in access. On the flip side, insurers need to be able to receive data efficiently, as well. Carriers must be able to import data received from various benefit partners into their source systems through a single point of entry. Without this, entry or import issues could lead to benefit integrity issues, where data is are correct on one platform but incorrect on another. These types of basic data errors will quickly erode relationships with employees and benefit partners.
One way to help alleviate potential data issues is for insurers to focus on providing simple products with simple rate structures. Focus on guaranteed issue limits. Anything that has to be approved or underwritten after payroll deductions begin will cause deduction and billing issues. An exception could be made if an insurer is able to provide automated underwriting decisions at the point of sale.
The data requirements for employers and enrollment partners vary widely (in part because no standards exist), which places more of the data integration responsibility on individual carriers to interact with individual employers or benefits companies. So, the easier it is for your IT teams or vendor partners to make those connections, the better off you are likely to be when it comes time for an employer to renew their contracts. It makes sense to pursue a course that keeps your systems agile.
What about a fresh start?
When it makes sense, we regularly recommend that, instead of attempting to migrate current and past business to a new platform, insurers start fresh with a new system dedicated solely to the one program. If an insurer is moving into a new market or launching new products, why not learn from past system issues and product issues and embrace a clean slate, eliminating the need to translate and carry cumbersome legacy programming into a new environment? Start with a brand new set of products and filings, a brand new marketing plan…perhaps even a brand new name to signify the difference.
Within group and voluntary benefits, this approach makes its case when looking at just a few of the benefits, including simplified testing, fewer resources required to launch, less expense, less risk to the old system and old data and dramatically increased flexibility in data usage, capability development and integration points. Managers who touch the system are far more likely to trust the data they see, reducing a “checks and balances” approach to billing, reconciling, correspondence and a dozen other areas where the need for clean data and quick visualization are essential.
We’ll discuss more about data strategies in the coming months, including ways you can build effective technology bridges and keep a high level of data integrity.