The group insurance segment is heavily dominated by employer sponsored insurance (ESI) — insurance that is paid for by a business on behalf of their employee as part of a benefit package.

In many cases, employees do not have an alternate option and are rarely involved in the buying process, as this is decided by an HR professional. There is an underlying issue in which this traditional mode disregards the consumer’s buying experience and, by extension, their engagement or service satisfaction — but this is changing.

The group benefits and voluntary insurance industry has traditionally focused on serving intermediaries such as brokers and HR/benefit specialists, rather than the consumers. It is no surprise that the digital phenomenon has focused more on increased automation and cost reduction, rather than customer-centric disruption widely visible in every other industry.

Today’s customers want to take more control of their benefits and options, irrespective of how they are covered, and whether as part of group insurance or directly with insurance carriers. Group insurance handlers are being asked by members to provide the same level of experience and service similar to other service and product providers in different industries. Consumers’ expectations have increased and the insurance industry cannot stay immune to that any longer.  

Today, 40 percent of the targeted market is comprised of millennials and is rapidly moving toward Gen Z. Industry analysis and reports have established that apart from being the fastest-growing generation of customers in the marketplace, millennials exhibit different attitudes toward employment, sales, and marketing, challenging many conventional strategies, including the ones prevalent in the insurance sector.

Research has also shown that millennials and centennials are least likely to actively engage with insurers. They do not trust easily and need a lot of tangible research to arrive at decisions. Most importantly, they are twice as likely to buy insurance online, but are least satisfied with the current level of online experience.

Group insurance providers need to step up and meet the needs and demands that consumers are expecting, particularly for millennials and centennials. Here are six ways providers can stay ahead in the market and successfully fulfill high customer expectations:

Integrated customer profile across various insurance lines  

The disconnect between modus operandi of group benefit providers and rapidly evolving customer expectations is largely due to overtly complex processes, legacy platforms, strategies and technology choices that have not been challenged for change nor resonate with the consumer.

Often, customers are demanding one unified view of their entire insurance portfolio, particularly policies that are with the same insurance provider. Redefining the user/consumer experience under these dimensions and balancing the disruption to existing baby boomers and Gen X consumers (who are slowly but steadily becoming adopters of technology), requires sound operational acumen backed by strong digital technology choices.

Bridge the gap between the insurer and the insured: focusing on strategies that move from intermediaries to the direct consumer

It’s important for group insurance providers to make insurance easy to understand and effortless for the consumer. It’s critical to provide better online outreach, self-service capabilities and access to online tools that assist on issues complimentary to insurance, such as finding the medical provider most suitable to their needs.

Engage with and provide insight-driven customer service

Many group carriers are not provided with detailed information on the consumers they are insuring. Until these issues are addressed, it will be difficult for group carriers to truly enter and leverage the digital world. The fundamental customer service relationship in the group context is in enrollment, billing and claims interactions. These systems should be digitalized on priority, as they will lead to immediate benefits of improved customer engagement and richer experience.

Demonstrate value specific to individual customers

Group carriers are partnering with many companies to drive healthier lifestyles among their members, including incentives for gym memberships or self-reporting regular health visits. In addition to promoting wellness, these efforts will allow group carriers to measure the adoption of healthier lifestyles among their members.  This allows carriers to underwrite policies with higher insights on the member(s) lifestyle and go beyond traditional underwriting methods, such as under which industry or group the member belongs (e.g., insuring mining workers would be riskier than office workers). It is also important to examine the insurance regulations and how far insurance companies can go to monitor the lifestyles of their members. 

Differentiate with investments in digital technology

Analog user interfaces in a smartphone world are a major set-back to the group insurance industry. While transformation strategies focus on streamlining operational processes, there has to be a shift in technology choices.

IoT (wearables, social-media integration), mobile app adoption, or omni-digital channels for personal connect is not about playing catch up — these are key to tapping into a tight market space and customer engagement as the demand is now on making insurance effortless to the consumer – including the interaction of their data with their insurer.

Clearly understanding the employer-employee journey, identifying areas of dissatisfaction and investing in advance analytics will not only help quantify economic outcomes, but also drive focus on the most impactful change levers to drive digital-innovation. 

As the group and voluntary insurance space gears for digital disruption, technology strategies should ensure that digital technology and transformation do not become barriers to technology adoption for the older consumer generations, yet scalable to increasing consumer engagement.

The effect of these digital forces, namely social media, improved online engagement, rich customer experience, availability of third-party aggregate level member (consumer) data and group level self-reporting of health data will certainly change the face of group carriers. It will be interesting to observe how employers and especially brokers manage consumer expectations as group carriers begin this digital journey. It will be extremely hard for employers to let go of control of the employee experience. But the group insurance industry does not appear to have much of a choice — or much time, either. This segment, too, is coming of (digital) age.