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Running towards reality: Overcoming traditional group and voluntary strategies

Baseball is a traditional game. For fans, it offers the feelings of fantastic play, outstanding pitching and the excitement of sailing at home over a fence. However, just because baseball has a solid tradition does not mean that the baseball business has remained traditional. For players and coaches, the game is about skill and analysis. When you reveal the core of baseball, winning now is about improved data and better use of data sources. I do not think so? Take a look at two late-season events from the major leagues of 2021.

First, there is the strange case of St. Louis Cardinals. The Cardinals did not have their best year, but according to most measurements, it would have been considered a success. They ended the season 90-72 and ended up in a Wild Card spot. They had a winning streak of 1

7 games in September. But in a surprising move, shortly after their last match, the Cardinals' front office released its manager for "philosophical differences". At least one of these differences was the manager's opposition to the full use of analytics. Who could have imagined a day when data usage would be such a powerful litmus test for executives that it could remove a winning manager?

Then there is the case of Houston Astros catcher Martin Maldonado. Maldonado is one of the worst hitters in baseball, but he is by far one of the league's best catchers. Even though he only hit .172 during the regular season, he was re-signed to a $ 5 million contract through 2022 and many consider him to be the most valuable player on the team. [i] Why? Maldonado is the king of analysis. He studies every batter. He informs every pitcher. He uses the numbers to change the game. Tomorrow, his team will start Game 3 of the World Series, in part because of his attention to analysis. , wisdom and experience. But with both, today's insurance and today's baseball, high-level performance requires going to the next level to put together a competitive combination of players, data and tools. Today's and tomorrow's products and services for group and voluntary benefits will require optimized operations, next-generation technology and groundbreaking analyzes. These will help insurance companies build their own insurance dreams.

Last week we released The New Reality and Future of Group and Voluntary Benefits, a thought leader written by Majesco and Deloitte's insurance experts. In the report, we look at the current situation for group and voluntary benefits through the lens of both Majesco and Deloitte research as well as recent joint roundtable discussions with leading group and voluntary benefit insurers – and even a buyer of benefits! We then look specifically at Voice of the Market Players – employers, employees and brokers. We round off the picture with Future State of Group and Voluntary Benefits which will require new strategies, new products, new business models and a new approach to technology.

In today's blog we will assess what the report has to offer. say about the current situation. Are insurance companies with group and voluntary benefits going in the right direction?

Insurance expenses – predictive or reactive?

Majesco's 2021 strategic prioritization surveys, based on results from insurance surveys after COVID-19, reflected a rapidly growing gap and gap leader. and Laggards when looking at their focus on key strategic initiatives over the past year and the next three years. But there is a potential promise of change. In Deloitte's Midyear 2021 US Insurance Outlook survey and report, although 52% of respondents reduced discretionary spending, often in areas such as talent acquisitions, only 6% suspended or postponed long-term technology projects, while 96% accelerated digital transformation initiatives to address a "new normal." [ii]

In addition, the two main activities prioritized by insurance companies to support financial and operational stability over the next 6-12 months involved the implementation of new technologies. The first, improving efficiency (70%) and the second, improving the customer experience (68%) proves that insurance companies are looking for technology to work profitably in all functions. In addition, insurance companies are making more aggressive technology investments, with 68% of respondents planning to increase spending on data analytics and 59% increasing investments in artificial intelligence (compared to 40% in Deloitte's latest survey).

Expenditure tells a story. Insurance companies realize that they need to improve efficiency in order to control the overall business. It is a reactive solution, but it is necessary. Group and voluntary benefits insurers see industry shifts and they predict their own results. This has increased the focus on transforming older cores with cloud-based next-generation cores designed to enable new business models and digitize capacity. They realize that the experience of the employer and employees will be the standard of measurement with which they will succeed. Can they become a dream insurer by giving employers what they need – non-traditional, API-enabled, non-restricted products that return data when they use analytics properly?

Success in the future will be highly dependent on these key areas:

  • The customer in the first place
  • Transformation of business models
  • Innovative new products and services that meet the needs of several generations and different employees and employers segments [19659013] Embraces the next generation of core, data, digital and ecosystems
  • Continuous innovation as the market landscape continues to change

Strategy development that matches the real group and voluntary landscape

The primary Benefit Group and Voluntary Challenge providers deal with significant older debts in terms of old business models supported by several older core systems, technology architectures and archaic business processes. These core challenges hinder their ability to implement a profitable growth strategy, improve operationally, respond quickly to market opportunities and innovate with new products and services, let alone have a customer-centric vision.

In many cases, insurance companies lack a comprehensive strategic response that balances current operations with the rapidly changing expectations of market forces. Changes in purchasing behavior, the regulatory landscape, the competitive landscape, innovation and the foundations of older technology and architecture can make the basis of all strategies seem unstable. The generational shift in customer preferences, plus the employers' desire to shift costs / risk to employees, increases the focus and demand for partnerships between ecosystem actors to enable personal, digital and omni-channel services.

In our recent times. roundtable discussions with group and volunteer leaders, topics such as enabling a true digital experience from end to end during sales, ecosystem connectivity through APIs, claim and leave transformation, improved market speed for new product launches and automation of sales-related operational tasks were identified as top-of-mind challenges and imperatives. With all these considerations on the table, group and volunteer strategies seem to go against reality; managers understand the possibilities and they plan to meet the market.

Traditional products – One size fits a group. What about the other groups?

The efficiency and profitability of Group and Voluntary products have so far been their main character. Brokers could say: "We do not need names. We do not make data. We just need to know how many people you have in the company. Send us the premium. Your employees are covered."

Traditional products focused on life, accidents, disabilities, medicine , dentistry and A&H, lacks innovation and responses to new needs and expectations, especially for Millennials and Gen Z. There may be four or five more demographic segments with widely differing needs.

Employers and employees are looking for products and services that are more affordable, tailored to very specific needs, portable, digital first, simpler and based on trust. wants all the services that help employees manage their lives and employment.Employees like the idea of ​​account-based benefits that can (or may not) subsidy race by their employer, but which is ultimately theirs to use, save or move with them. Some employees just want catastrophic coverage. Others want full coverage. Still others want coverage for or help with completely new needs, such as pet insurance or repayment of student loans. One size fits all gives way to "build-your-own" coverage. Even the registration tools have had to be changed to enable digital registration with alternatives in addition to the alternatives, as well as proposing alternatives based on where they are in their life journey.

The only way Group and Volunteer Suppliers will fit the new forms. will be to reconfigure for flexibility. The reality in today's new benefit landscape is that only those with a framework for innovation will be able to stay in the league. This means that the most important strategy for all companies will be the adoption of a next generation framework.

Group and voluntary segments switch to next generation technologies

The Group and Voluntary Benefit market segment has lagged behind in heritage modernization due to complexity , the cost and difficulty of reimbursing, given that many policies on the systems can be from 30 – 50+ years old. A large number of these insurance companies have complex, aging infrastructures.

Based on Majesco's 2020 Core Systems research, L&A and Group work overwhelmingly with 50-75% non-platform solutions, as shown in Figure 1. [iii] A staggering 40-75% have either 2-5 or over 6 policy systems, which represents a significantly older challenge. Both real group benefits and voluntary benefits are challenged with core solutions that are not platform-independent, which means that insurance companies have a significant disadvantage when it comes to adapting, renewing and accelerating growth.

However, group and voluntary benefit providers are on the move. According to Majesco's research, voluntary benefits represent the strongest transition to platform-based solutions among all types of insurance companies. This is not surprising given the significant market interest and growth in voluntary benefits due to changing staff demographics, more job movement and the desire for innovative new benefits and portability.

Figure 1: Status of L&A and Group Core Systems

Data-driven analysis will make the difference

The importance of capturing, enriching and using data to deliver a relevant and engaging customer experience is paramount, including for group and voluntary benefits. The ability to combine employer data with staff-generated data provides a basis for creating personal experiences and tailored offers that can drive increased and broader registration of benefits and improve customer loyalty.

One of our roundtable participants said it best, [19659002] “Everything is driven by data . If you do not have a good computer model, it will be difficult to succeed. Data is crucial for digital and customer experiences. ”

Every digital or customer-focused business process and solution is ripe for embedded analysis. Structured, unstructured, transactional, real-time and third-party data across the group and the Voluntary benefits ecosystem can be used to drive innovative data-driven bills, improved issue guarantees and claims, and ultimately improved customer experience. This is a mandate, not an option.

To succeed in the insurance of the future, insurance companies must prioritize and address their technical foundation in order to drive digital transformation, innovation and growth. It is the current state of the group and the volunteer market – the need for transformation of traditional players, the opportunity for real growth and the excitement of a strategic plan that will produce a winning team.

In my next blog we will look at the future of the market for group and voluntary benefits. How and what will these new strategies effectively provide the market with what it is looking for? Which products are most likely to increase in use and interest among employers and employees? For a preview, be sure to read, The New Reality and Future of Group and Voluntary Benefits. For a data-specific view on how usage and analysis change across the entire insurance value chain, see our latest webinar, Insurance Moneyball: Winning in the Digital Age of Insurance.

Abhishek Bakre, Senior Manager, Strategy and Financial Services at Deloitte Consulting LLP, Denise Garth, Chief Strategy Officer at Majesco

[i] Wagner, James, "The Astros & # 39; Secret Weapon? A Catcher Who Hit .172," New York Times, October 26, 2021.

[ii] Shaw, Gary, "Midyear 2021 US insurance outlook: Most carriers preed for growth as economy rebounds," 27 July 2021, https://www2.deloitte.com/us/en/insights/industry/financial-services/impact – of-pandemic-insurance-industry.html

[iii] Garth, Denise, "Insurance Digital Transformation: A New Era of Core Systems, Next Gen Technologies and Ecosystems," Majesco, March 13, 2020, https: // www .majesco.com / white-papers / insurance-digital-transformation-a-new-era-of-core-systems-next-ge n-technologies-and-ecosystems /

The post Running Toward Reality: Overcoming Traditional Group and Voluntary Strategies first appeared on Majesco.

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