Winning in the Voluntary Benefits Market: It’s All Digital!
The way to employees’, employers’, and insurers’ hearts may just be… voluntary benefits. In the world of competitive hiring, employers are looking to offer additional incentives more than ever, and voluntary benefits can be one of the most lucrative product lines for the group insurance companies that offer them. However, to win in this market and drive success, group insurers must leverage technology-driven innovations.
Digital functionality now serves as a distinguishing factor for employers looking for voluntary benefit offerings. When considering a new insurance carrier, more than half of employers (59 percent) would select a carrier that works well with their benefits technology platform, even if their product is a little more expensive.i By utilizing modern benefit administration platforms, employers can offer their employees a seamless experience when selecting and enrolling in a comprehensive array of benefits, such as defined contribution pension plans, medical insurance coverage, and supplemental health coverage.
Innovations that will Drive Success in the Voluntary Benefits Market
Post-enrollment servicing has also become a critical differentiator for group insurance companies. Almost all group insurance executives agree that employees now expect seamless policy administration solutions from carriers, which includes providing streamlined onboarding and efficient billing processes. Half also agree that brokers are now more willing to switch carriers so that their employer clients can receive better policy administration solutions.i Maintaining satisfactory service levels heavily relies on a group insurance company’s ability to efficiently onboard new employer clients and promptly and accurately initiate the billing process. Unfortunately, legacy policy administration systems often lack the capability to support the swift activation of new cases, both in terms of installation and enrollment, and face challenges in performing fast, accurate billing.
According to employers, their top five unmet digital needs are same-day claim payments, self-service quoting, text messaging, application programming interfaces (APIs) for seamless data exchange, and digital onboarding.i API capabilities are a particularly challenging gap to fill. With employers expecting to offer more benefits five years from now than they do today, the ease of connectivity between group insurance policy administration platforms will likely become make-or-break to remain competitive.ii
Streamlined service experiences for employers, brokers, and employees are also critical. Access to artificial intelligence capabilities can assist with underwriting, customer service, and potential future endeavors. API enablement can ensure more efficient integration with benefit administration platforms and a better employee experience. The current common electronic data interchange (EDI) approach to benefits administration vendor integrations needs more data validations and are error-prone, requiring insurers to verify the data exchanged and respond to the sender after multi-day or multi-week delays. These delays break the user experience and reduce efficiency for group insurance companies and their employer clients.
Increase Employee Understanding
Within the employee enrollment process, insurers need to provide more educational content about their products and services. Only 54% of employers indicate that “employees understand their benefits and how to use them.”iii This knowledge gap reduces participation rates, utilization, and the overall value of group insurance products. Insurers should provide creative, visual content before and during the enrollment process to show employees representative examples of the coverage available to them.
In today’s competitive hiring landscape, voluntary benefits have emerged as a powerful tool to win over employees. To succeed, group insurance companies must embrace technology-driven innovations, including digital functionality, API integration, and enhanced service experiences. Improved educational content is also essential to boost employee understanding and enrollment in group insurance products. In this digital era, technology holds the key to winning the hearts of employees and employers alike.
i Eastbridge Consulting, “The Voluntary/Worksite Market – An Executive Perspective 2023”, April 2023
ii Limra, “Fast Forward: Employer Views on the Future of Benefits”, January 2023