Creating Group & Voluntary Benefits to Support the New Employee Experience

How group & voluntary products might better meet employee needs through a transformed customer experience.

(Image source: Unsplash.)

Yesterday was the first day of Fall. Most U.S. companies are just weeks away from their Benefits Open Enrollment. Employees are the focal point of the enrollment process. As they consider their benefits, they are trying to figure out how to select their employer benefit options to best fit the lives they live.

Courtney is 28. As she looks at her company’s benefit offerings, she is unenthused. Her family is growing. She’s interested in employer packages that will help her to simplify her life. Can she add her pets? Does she get a discount for using a wearable device? Can she bundle auto and renter’s through her employer? Can it all be administered through one app and can all of the premiums be paid from her paycheck?

Steve is 62. He thinks he will retire at 69 or 70. As he saves for retirement, he is price-conscious regarding his life, accident and critical illness coverages. He’s in great health and he can prove it with data from his Strava app. He loves his work. His plan is to do a little in gig work in retirement as a part-time consultant. Steve is interested in keeping many of his benefits in place once he leaves his employer.

Jamie MacGregor, CEO, Celent.

Courtney and Steve work for the same company. Their life circumstances are completely different, but to their employer and their benefits providers…they are nearly identical. They have “static” benefits that are not portable. They are not appropriately tiered. To many group insurers and voluntary Benefit providers, Courtney and Steve are not even names; they are fractions of policies sitting under a group number.

The Customer Experience Walks into the Workplace

Retail customer experience and mobile customer experience are impacting the employer/employee benefits relationship. Employees are shopping for jobs more frequently than they shop for cars, so employers are having to become attractive. Group insurers and voluntary benefits providers are strategizing on how to shift their business in a way that caters to employers. Fringe insurers and those who realize that they may have viable group and voluntary market products are now looking to see if they fit into the picture as well. Both groups are looking at the customer experience from two angles; the employer customer and the employee customer. Both customers will push them to become mobile/web-ready/customer-savvy benefits providers.

Courtney and Steve are likely to be very happy with the changes that happen in their benefits packages in the next 2-3 years.

Majesco is excited for the opportunity that technology is bringing to group & voluntary benefits. Last month, Celent released a Majesco-commissioned report, Next-Gen Platforms in Group and Voluntary: Exploiting New Opportunities Across the Worksite Ecosystem.  We discussed the report over a series of insightful articles but we also asked two industry experts to join me in a round-table webinar to get to the heart of group & voluntary’s real market opportunity and then to set the stage for what is required if an insurer wishes to take advantage of the market timing. If you want the full conversation, you can view Untapped Market Opportunities for Group and Voluntary Benefits with Diversified Plays, Open Ecosystems and Next-Gen Platforms.

In this article, we’ll cover just one of the threads—how group & voluntary products might better meet employee needs through a transformed customer experience.

Joining me were Seth Rachlin, Executive VP, Global Insurance Industry Leader, Capgemini and Jamie Macgregor, CEO of Celent. Jamie began by giving us a market overview.

Jamie Macgregor

“Where we are today is a pretty exciting time. Technology has matured to a state where it is generally making a difference to the employee engagement and customer experience. Plus, I think the wider market, the employees and customers, ultimately expect way more of the industry. The world of work is changing. Everybody can see that. You can certainly feel it when you look out into the wider marketplace.”

Jamie then walked us through the greatest changes in the marketplace. In the last generation, it was common for employees to stick with one job for life. Today in the U.S., the average person will hold 12.3 jobs between the age of 18 and 52. The battle for talent is becoming crucial to companies of all types, making benefits more than just a nice additional package. COVID has caused some people to rethink their jobs and careers in favor of jobs that won’t require long commutes. Employees are looking for flexibility and a great package. A recent MetLife study found that 69 percent of employees say that having a wide range of benefits would increase their loyalty to their employer.

Employees need a workplace benefits experience that fits their lives.

In group and voluntary benefits, the employer has long been considered the customer. Part of the shift that Jamie described, however, has created an entirely new employment dynamic, where companies treat their own employees like customers—making sure that the experience looks inviting from the outside and doing their best to keep the employees happy once they’ve joined the organization. With employers needing to please employees, group insurers and voluntary Benefit providers are now needing to look one layer deeper in the experience. How can the industry improve the employee experience through the group & voluntary channel?

Jamie Macgregor

“The keys to opening up the opportunity…are really about finding ways to increase relevance with the end customer at the right moment. If you think about it, the traditional insurance fact-finding approach is geared towards identifying big life events, such as when you join a new employer, when you buy a home, or give birth to your first child. It’s less good at identifying other life events such as a promotion, a sports injury that stops you from working for a few days, or the unfortunate passing away of a close friend from a dreadful illness. These types of events are often missed by the industry when perhaps they present the perfect opportunity to engage in a conversation about goals and protection.

“Employers and providers have the opportunity to work together to use their collective knowledge and expertise to capture these events and proactively engage in a positive conversation about current needs.”

Denise Garth

“Let’s go a little deeper around the employee market landscape. There is a great employment shift happening and companies want to attract and retain employees. But many companies have a whole range of different generational groups under their roof, and each has a different set of needs. Let’s talk about the implications of that for our traditional processes, traditional plans and the traditional way that we’ve handled employee benefits.”

Seth Rachlin

Seth Rachlin, Seth Rachlin, Chief Innovation Officer, Insurance, Capgemini.

“There is tremendous volatility in terms of careers and people moving around. People aren’t going into offices. How is that relationship between the employer and the employee really sustained, really developed, and how does it really take on character and meaning? Benefits are an important part of that equation and, as you point out, Denise, it’s about having benefits that are appropriate to an employee at their point in life.

“As is broadly true in insurance, we need to move consistently from a one size fits all to more tailored offerings, more tailored products, more tailored and complete packages that actually hit the employees at the point where they’re at—with the ultimate goal of trying to deepen that employment relationship.”

Employees want portability. Do employers?

There are some questions and puzzles for potential group & voluntary benefit providers, some of which will only be answered with time. For example, is insurance portability (the ability for employees to take their benefits with them) good or bad for the employer? The employer is all about attracting talent through flexible benefits, but they are also about retaining talent. Where is the fine line?

Jamie Macgregor

“What you really want to do from a provider point of view is to maintain a relationship with the end customer while they are switching firms or working multiple jobs concurrently in the gig economy.  To capture the customer, new more flexible propositions are required, which are more geared toward the individual than the actual employer themselves, so there is more transportability. But how does that work in practice and how does it actually generate the right proposition for the employer too? It’s difficult to square those two things off, I think, but necessary.”

Seth Rachlin

“It’s really challenging because on the one hand we’re talking about benefits as a way of attracting and retaining employees. And on the other hand, we want them to be portable so that they can keep the benefits if they leave. It calls into question who the customer is.

“For every insurance company that I’ve worked with in the group benefits space, if you ask who the customer is‑the customer is the employer. The customer is not the employee. It places insurers in an interesting box with respect to who’s paying the bills versus whom they also might want to serve.”

Employees are wanting a more holistic understanding and experience

Denise Garth

“Something that’s happened as a result of COVID is that many people, employees in particular, have gotten really sensitive to looking at their whole financial resiliency as individuals or as households. There are some non-traditional kinds of value-added services that are kind of like ‘products’ that are offered, such as school loan reduction or legal services or financial planning services. All of those types of things are taking a higher kind of interest.”

Jamie Macgregor

“But when you look at it, it needs to be an advised proposition to explain the differences between some of those products, especially in the life sector. The general direction has to be toward making these propositions simple and making them all relevant. If we’re going to address the protection gap, then (the solution) has to be obvious to the end consumer.”

Seth Rachlin

“Yes. It’s all about how you provide advice. The Capgemini World Insurance Report this year was very focused on the advice equation. And we interviewed consumers around the globe. For all of the great strides that have been made in terms of digitization — most of the consumers, and particularly the millennials and Gen Z, felt that they didn’t understand insurance products and that they needed someone to explain them. The advice equation, whether it’s digitally enabled advice or whether it’s traditional advice, is still highly relevant for the kinds of products that we’re talking about.

Next-Gen Platforms for Group and Voluntary

In each of these cases, traditional products, processes and systems will likely lack a key digital component to engagement, policy retention and advice. Group insurance and voluntary Benefit providers are going to need to meet employee engagement and protection gaps with next-gen platform solutions. They will need to be cloud-native. They will need to be API-ready so that they can participate in current and future benefit ecosystems. In our next article, we’ll consider those preparations in detail. You can dig deeper into the opportunity by reading Next-Gen Platforms in Group and Voluntary: Exploiting New Opportunities Across the Worksite Ecosystem.  Plus, be sure to catch our full conversation with Jamie and Seth and by viewing, Untapped Market Opportunities for Group and Voluntary Benefits with Diversified Plays, Open Ecosystems and Next-Gen Platforms.

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Denise Garth // Denise Garth is Chief Strategy Officer responsible for leading marketing, industry relations and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners and the industry. She is a recognized Top 50 InsurTech Influencer and industry leader with both P&C and L&A insurance experience as a CIO and business executive with deep international ties in Asia and Europe through her ACORD leadership role. Denise is an acknowledged strategic thinker, innovation leader, international speaker, and author of thought leadership and articles regarding the key issues and opportunities facing the industry today to prepare for the future.

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