At our 8th annual Novarica Insurance Technology Research Council Meeting, the discussion was wide-ranging at the Life/Health/Annuities breakout session. The session focused on both Individual and Group product lines, with a particular focus on both Group and Voluntary benefits. For the Group space, after many years of depressed investment (no doubt fueled by the Great Recession), we’re now seeing carriers particularly focused on new capabilities that can help both defend existing market share while opening up new opportunities in the emerging areas of Worksite / Voluntary Benefits.
The Worksite/Voluntary space is also one that Individual insurance carriers are eyeing as an opportunity, which sets up an interesting “race” as companies prepare to face off in what may be a critical area for both lines of business in the future. In fact, competition and competitive capabilities were very much top of mind during these discussions. While Group and Individual Life carriers certainly see the Voluntary Benefits space as an area that they can gain leverage from current capabilities to build market share, there are other forces in the market that also see this as prime real estate for the future. Group Health carriers come to mind, for example, and we discussed the importance of being aware of alternative forms of competition that could make this space even more interesting in the coming years as the full impact of regulatory and demographic changes emerge.
In terms of capabilities that are high on the list of carrier concerns, the group had a wide ranging discussion that touched on electronic enrollment platforms and electronic signatures, consumer portals, approaches to integration with TPAs, death certificate processing, and group benefit enrollment vendors. The continued focus on electronic capabilities that effectively enable both a higher level of end consumer self-service and a great ability to support Straight-Through-Processing of transactions was central to the discussion. Better service can frequently be lower cost service too, when the functionality is available to allow both prospects and customers to handle transactions when they want, on the device they want, with other capabilities available to guide consumers through the navigation of options and features. Mindful that customer expectations around what a good experience should be are now essentially established in other domains (e.g., retail, banking), insurance carriers have some key focus areas to address in order to remain competitive.
Many participants were interested in digital channels, legacy system modernization or replacement, and especially the evolution of Group-oriented solutions. Handling different sizes of group cases was cited as a challenge with vended solutions, and several participants talked about using multiple solutions for non-core processes and systems. Private exchanges are not yet addressing their potential in the market, but carriers are watching them carefully. Each year, as the enrollment periods for benefits approach, the reality takes notable steps toward the promise of these platforms to deliver capabilities and plan sponsor/member access.
Customer experience remains a particular challenge, particularly when there is a need for carriers to span multiple internal systems and / or to integrate internal capabilities with functionality delivered through TPA’s or other third parties. This highlights the need to be thinking concurrently about both the desired user experience and the underlying architectural investments required to make “good experiences” a reality.
Discussion also explored the current state of commercial solutions available to cover a wide range of functionality to support Group insurance. While historically lagging behind Individual insurance alternative, the Group oriented capabilities are coming on quickly. A number of companies at the session are poised to make significant investment decisions in the near future.
The session also explored some of the differences in the challenges represented when addressing legacy core systems that come from a mainframe environment (1960’s to 1980’s technologies) when contrasted with the “legacy client server” and related solutions that date to the 1990’s (up to the present). While it is tempting to think of a correlation between the age of the systems and the magnitude of the challenge, this may simply not be true based on access to qualified resources and the stability of the underlying technology. In any case, there’s a clear understanding across participant carriers that getting after some of the aging foundation in the technology stacks will be critical if they are going to meet future state needs for flexibility, time to market and experiences that can support greater diversity of both customers and distribution channels.
The idea of a Special Interest Group (SIG) session, that would bring together Novarica Research Council members for a full working day that focused on specific lines of business, grew out of this session in 2014. Already this year, Novarica has hosted sessions focused on Group Insurance and Annuities. Another session, focused on Individual Life capabilities, is now scheduled for October 14th in Boston, MA (tentative agenda).
Anyone interested in this SIG event can let me know by sending me an email. As many carriers turn to start budgeting for 2016, things look both interesting and opportunistic for carriers and their IT organizations.
Upcoming Novarica Insurance Technology Research Council Meetings
The Novarica Insurance Technology Research Council is a free, moderated knowledge-sharing community of nearly 400 insurer CIO members. Members represent a cross-section of property/casualty, life/annuity, and health insurers, and range from the very small to the largest companies in the industry. Some of our upcoming 2015 events include: