Employee benefits insurers are facing a fundamental change in the way consumers compare and consume their products in light of mandated insurance exchanges and shifts in customer expectations, according to a new report from Celent. To adjust, insurers may need to update their application architecture and case install/enrollment processes, where dramatic changes may be necessary for streamlining distribution and service channels.
Also, in the face of increasing automation and abstraction in the sales process, insurers will need to seek out new, innovative ways to stand out among customers. The report, “U.S. Enrollment Business Transformation: Changing Business Connections and Technology Challenges,” compares this last challenge to the concerns P&C carriers have around batch raters, this abstraction makes competition on brand value more difficult.
“Insurers, brokers, exchange sponsors and even employers, driven by the trend toward employee benefit consumerism and the shift to more voluntary products, all are vying for the consumer’s attention through control over the customer experience,” the report says. “While business leadership and HR teams are still critical to the process, this is still a dramatic shift from insurers’ and brokers’ traditional focus, where ease of employee enrollment was one important factor among many others.”
To make the proper adjustments, Celent points to several crucial technologies, including mobile/tablet, big data and next-best action engines, which are designed to use predictive analytics and work with consumer- and agent-facing support systems to make recommendations.
Celent says insurers should also consider investing in brand extension through other channels and technologies to mitigate the commoditization that occurs when sales become more automated. As some crucial customer touch points are replaced, consumer education stands to become an important area of investment.
Another way insurers can combat the commoditization of benefits products, according to the report, is by developing unique, interlocking distribution and product strategies by market segment. The report goes on to say that while small to medium business segments will transform the most at first, even large benefits providers will be forced to react to private exchange models and the shifting consumer landscape.
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