Stormy Weather: Lessons Learned for Group Insurance

Carriers are concurrently looking at what needs to be done to preserve their traditional core group benefits business, while looking to grab share of voluntary benefits while at the same time contending with new competitors ranging from individual carriers to group health providers.

(Car stranded near the Massachusetts/New Hampshire border, winter 2015. Photo credit: Medeis.)

Sometimes, the best of plans still leave you short of a goal, if not stranded in a completely unintended place. While this can certainly be challenging, if not deeply concerning, it can also open up new opportunities if we are prepared to take advantage of them. I was reminded of this again earlier this week when participating in the LIMRA Enrollment Technology Seminar on Group Insurance, whose circumstances had lessons for the state of the market in question.

(Related: FINEOS Launches FINEOS Administration Suite for the Employee Benefits Industry)

At Boston’s Logan Airport, where the event was held, the organizers did a superb job and seemed to have things well positioned to handle all contingencies—even the local team winning the Super Bowl didn’t seem to cause any untoward issues as we rolled toward the event kickoff. And then Mother Nature hit with another record setting blizzard which left many participants stranded in the wrong place and the plans for delivering content in tatters. This development had the potential to take us to a very unfortunate place, but the capable organizers promptly set up webinar capabilities that allowed us to support both the onsite and remote participants—yours truly reporting from North Carolina. It came off flawlessly: like many things in IT, a good approach is to hope for the best and plan for something else.

The title of our segment was “Staying Connected in a Brave New World”—appropriate literally in the case of the weather-related challenges of the conference, and metaphorically for the range of issues buffeting group insurance and voluntary benefits carriers today. The issues facing these carriers may represent notable challenges—but they could also reflect on new opportunities, given the right preparation. One virtual certainty in this uncertain time, however, is that it is unwise to expect a clean, linear transition between current state and future capabilities. Carriers must leave room to adjust, adapt and pursue unanticipated opportunities when they emerge.

Target-Rich Environment

Our panel discussion, with both carrier and vendor participants, focused on both critical challenges and new opportunities to expand this line of business. It won’t be easy of course. Addressing legacy system issues, dealing with the transition from managing at the census level to looking at individual member data and demographic shifts are all in play for carriers in this space. From our own research at Novarica, we know carriers are also concurrently looking at what needs to be done to preserve their traditional core business (group benefits) even while looking to grab share of voluntary benefits while contending with new competitors ranging from individual carriers to group health providers. All of this, of course, takes place against a backdrop of elevated customer expectations fueled by retail, consumer product and banking experiences. It is, as they say, a target-rich environment for investment. That, of course, begs the question of what strategic decisions should be made, in what order, to properly position carriers for success.

(Related: New Pegasystems Application Simplifies Group Benefits  Underwriting)

As a result, it is no surprise that a range of vendors planning on capitalizing on the evolving market chose this as the week to make major product announcements. FINEOS, Pega and EIS (to name but 3) all took square aim at the space with capabilities designed to significantly advance the capabilities available to support these lines if business. Whether it is a focus on underwriting, the ability to more effectively manage claims, addressing billing issues or moving to plan member-centric data models, the options available to carriers are opening wider.

Leverage Past Experience

Also of note now is that many of the issues and resulting solutions look to leverage past experiences with other lines of business, including commercial lines P&C. The logic of this development is both compelling and something that started to emerge some time ago. It is accelerating as a trend now, which could bode well for carriers getting ready to make key investment decisions that will impact them for years to come.

As I mentioned in my opening remarks—delivered remotely from N.C.—the world is changing fast. For carriers, there is a need to be wary of the “success trap,” which is the notion that even when armed with the capabilities and the knowledge to move forward into a brave new world … companies frequently stumble (and fail) because they can’t let go of the things that brought them to the dance in the first place. A “Kodak Moment” is something very different now than it was 30 years ago.

Bottom line is “don’t be that guy.” The road ahead is exciting, challenging and full of both risk and opportunity. Consider the options, be prepared for mid-course corrections and be situationally aware. And, perhaps most important of all, if there are new and foreign issues being grappled with, consider getting help.

 

Rob McIsaac // Rob McIsaac is a Senior Vice President of Research and Consulting at Novarica with expertise in IT leadership and transformation as well as technology and business strategy for life, annuities, wealth management, and banking. He has broad experience in IT strategy and management in the insurance and financial services industries. Prior to joining Novarica, he served in a series of senior technology management positions including leading the Business Transformation Office at Nationwide Insurance and as the CIO for First Citizens Bank, a rapidly growing regional firm based in Raleigh, NC. Rob spent the majority of his career at Guardian Life, where he was the Divisional CIO responsible for annuity, distribution and broker dealer operations and at Prudential Insurance, where he held a variety of positions including leading e-Business development efforts. Rob holds a BA in Economics from Montclair State University, an MBA in Information Systems from Seton Hall University and has received a number of business and technical designations including FLMI and LLIF. He can be reached directly at [email protected].

Comment (1)

  1. It was an excellent panel. These are the topics that we need to talk about as an industry. In order to be able to take advantage of the opportunities that change can bring, change needs to take place from the core. In other sessions, I was disappointed to listen to ideas about layering “connected” technology on top of legacy systems. Fighting the legacy systems to add incremental benefits, all while making the infrastructure more convoluted than it was before.

    And I really think you’re on to something with the lessons from adjacent insurance segments such as P&C. While GB has its own challenges, there are many, many lessons to be mined from P&C.

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