I was recently a panelist at LIMRA's Supplemental HealthProducts conference. Supplemental health product development is hotfor a couple of reasons. One is the numbers: According to LIMRA,collective sales of these products in employer-related markets areup 5 percent over 2016, continuing a multi-year growth trend. Moreimportantly, employers are confused by uncertainty over basicmedical products and concerned they need to offer voluntary optionsto fill coverage gaps.

The panel focused on trends in product development. In deferenceto my fellow panelists and facilitators, I will limit this columnto things I discussed, though everyone had great things to say.

The first topic we discussed was how insurers are incorporatingcustomer feedback into product development. We look to everycustomer in the product value chain for input: the employer,employee and broker (who is a facilitator for the others). Weconduct marketing research and want to know that any development isgoing to satisfy needs for employers and employees—and that it willbe sold by our brokers.

The best process is to get “outside in” feedback from ourbrokers and then apply “inside out” thinking based on ourexperience to put their insights into action. This includes goingbeyond the product and thinking through the support process: Howwill the product be enrolled, how will it be serviced, and whatcustomer experience should be expected?

A few years ago, we asked employers and employees how we couldimprove our evidence of insurability process. For the most part,they liked what we were doing because they didn't know how much theprocess could be improved. When we told them how we could transformthe process, they were delighted. So research combining what isdone with what can be done fosters customer delight.

The panel was asked whether customers prefer simple products orcomplex products that offer a multitude of benefits but might beconfusing. My opinion is that simple, but relevant, is best. Openenrollment can be very confusing for employees. They are given alimited period of time to make their benefit elections for thecoming year. Products need to be understandable and meet needs theemployee can relate to. Second, added features add cost, and lowcost relative to value is a cornerstone of buildingparticipation.

How are these products evolving? Customer input on productdesign is the prime mover. Customers like personalized service,such as assistance finding the best treatment plan and medicalproviders. Customers also want supplemental products to mirrormajor medical coverage where possible, as in eliminatingpre-existing condition exclusions.

Why are these products so important in today's market? The easyanswer is that they fill gaps in the medical plans provided byemployers, gaps that are more evident than ever to workers becausetheir out-of-pocket expenses are rising for both common anduncommon events (an emergency room trip or a serious medicalissue). Many employees simply do not have available savings tocover these costs, which is why so many bankruptcies and otherfinancial issues are driven by health care-related expenses. Whenyou consider these factors together, it becomes clear why manyemployers now consider these products to be a part of theirmainstream benefit offering.