For many group benefits insurers, digital transformation raises a number of concerns that aren't faced by insurers in individual lines of insurance.
For instance, group insurance plans typically involve a combination of life, health, vision and dental offerings that are tailored to meet the needs of specific employers and their workers.
Insurance carriers have customized their internal systems over the years to accommodate this range of offerings—which means that digitizing these systems requires an equally custom and often more complex approach.
Because of their complexity, group insurance plans also tend to incorporate more third parties than individual insurance. These parties can include brokers to liaise between insurance carriers and employers, and policy administrators to manage insurance distribution to employees. With any new digital systems they introduce, insurance carriers have to first be sure that they'll be able to support and interface with the various different operating models of each of these stakeholders.
Each of these concerns have led many insurers to put group benefits lower on their list of digital priorities than other business operations, while others have put off digitization altogether.
Those that have begun the digital transformation process, however, are quickly finding that the benefits far outweigh internal system modernization and infrastructural overhauls. And in many cases, these benefits can be achieved well before digitization is complete.
As more group insurers look to make the case for digitization, here are a few ways that modern infrastructures will lay the foundation for much larger business gains.
1. New operational efficiencies will drive time and cost savings that can be passed onto customers.
Competing against other insurers on pricing is difficult because rates are heavily influenced by external factors. For example, in the group insurance space,
What's more within insurance carriers' control is the experience they provide to their customers. Through digitization, insurers will be in the position to capitalize on new technologies such as Robotic Process Automation (RPA) that can automate everything from back office underwriting and claims processing, to customer-facing chatbots and support centers.
This new level of efficiency will enable insurers to complete processes in seconds that would otherwise take days, or even months—creating a ripple effect that extends all the way to the customer. Further, by automating their most heavily-manual and time-consuming operations, insurers will be able to reduce their administrative overhead costs, putting them in a better position to keep their rates as competitive as possible.
2. Digital frameworks will power new digital experiences.
Insurance carriers are often associated with the negative idea that they're only involved with their customers when they need to make a claim. New digital technologies provide an opportunity to reverse this perception by introducing products that create opportunities for insurers to develop relationships with their customers outside of the claims process, and improve their overall experience.
For instance, offering wearable technology that tracks activities like exercise and attending health screenings provides a way to offer lower rates to lower risk groups, while incentivizing better mental and physical health.
Digital customer portals are another way for insurers to redefine the customer experience, eliminating many of the manual, paperheavy processes that often come with obtaining insurance coverage. With AI, for example, insurers can automate lengthy questionnaires that are necessary for gathering information during the underwriting process, rather than doing so over the phone or in person.
3. Data-driven insights will enable insurers to meet rising demands for tailored benefits packages.
Insurers have traditionally taken a one-size-fits-all to group benefits, providing the same offerings to all of the employees within an organization regardless of factors such as their age, gender, health condition and more.
Especially as younger generations enter the workforce, employees are beginning to expect a wider range of benefits that are tailored to their unique needs. This is ultimately leading employers to make decisions about which insurance carriers to work with based on the diversity of benefits they offer.
It's in insurers' best interest to build their offerings around this growing need for personalization.
Achieving heightened personalization for thousands of different employees can be difficult with manual processes. But with digital systems, insurers can organize and analyze their internal data at a never-before-seen rate, and use the resulting insights to build policies around the individual needs and risk profiles of their clients.
Digital transformation can quickly become overwhelming when it's viewed solely through the lens of platform modernization, data migration and system integration. This perception undermines the true purpose of digitization, though, and the tangible business outcomes it creates.
