Group Insurance Technology: Back to the Future for Policy Admin & Billing

This is the first in a series of three blogs to start a practical and real discussion about industry challenges and how technology can help.

Often, we look at technology and think about the grand advances we’ve made since Otto Rohwedder sat down after a long day of slicing bread and thought, “Geez, wouldn’t it be great if this was automated?” Things such as space exploration, television, computers, microwaves, and the internet. All are great examples of groundbreaking advances that have changed the way we live. While breaking new ground is great, the key is being able to harness that new-found power and use it to deliver value across an organization or to the consumer.  Similar to a lightning bolt, where you have 1.21 Gigawatt’s of raw electricity, if you can’t harness that power like Doc and Marty, you’ll be left in 1955 with a broken clock tower and stuck at the ‘Enchantment under Sea’ dance.

So how can we harness the power of technology and derive value? Where is the flux capacitor in insurance?  The answer is in the challenges we face daily. For this blog series, the focus is on real challenges facing our industry and what practical, smart solutions can be applied to overcome them and send us back to 1985… or later!

Let’s look at it from an insurance carrier perspective, both from external and internal perspectives. There are three challenges that if addressed can bring profitability, scalability, and better client retention:

  • Cost
  • Premium Leakage
  • Administrative Complexity

First: Cost. Putting portfolio performance and loss ratio management in a box for a moment, the number one challenge facing carriers is cost control.  How do you grow your top line without a one-to-one growth of your costs?  How do you drive greater profit margins with more revenue?

Having worked in and around an Underwriting organization for many years, I could list about a dozen logical, thought out, and proven examples of cost issues that plague most Insurers.  That would be too easy, why not go to the less glamorous, but equally entertaining process of client onboarding.  Also known as New Business Implementation, doubling part time as the part of the show where you let down your client with a poor experience.

For this example, we’re assume we made it through the RFP stage, finalist selection, and won the business. For a brief point all parties are happy and looking forward to the future of a fruitful mutually beneficial relationship.  Then reality sets in and the implementation process begins.  This is also the phase where the real benefit plan is uncovered via an excavation process similar to when ancient ruins are found on a construction site… everything grounds to a halt.  Confusion sets in.  Implementation processes blend both business and technical needs and can be quite complicated. Throughout the process, plan design and administration information will be communicated across various mediums: Carrier pigeons, slide show, emails, and many, many meetings.  The other part of this is the place the Carrier must ‘load’ this information administer the plan.  This is usually a series of ‘systems’ you may recognize some of these:  Microsoft Excel, Access, and Word.  Legacy databases, black screens, etc.  The end result is costly as you have a lot of manual processes, duplicative entry, and a long painful implementation experience for your client.

Going back to those three challenges, highly inefficient, ripe for premium leakage, and overall tough to administer. You get the picture. How can we change this?  Easy, use a purpose-built platform to administer your benefits that can leverage API’s to pull the data from your underwriting and pre-sale assets.  That’s way too simply put, but it’s the truth.

Instead of rekeying the plan design and administrative information that was used to create the proposal and win the business, why not pull that information through to the implementation via API’s? This is a much more powerful, effective and efficient process, creating greater cost control via technology and automation. Instead of increasing the likelihood of getting the information wrong via manual rekeying, your chances of installing that case incorrectly goes down by some factor of a large number when using the APIs to aid in the implementation.  This is a better opportunity for a more efficient, much easier process.

The end game here is you take a typically painful process that is fraught with potential errors and issues, and with the right technology applied, turn it into a client retention tool.  This may sound daunting, but the ability to leverage open core technology with the right process reengineering could be the difference between winning and losing your clients.

In the next two blogs, I will go in to more detail on the next two challenges of premium leakage and administrative complexity.  In the meantime, I would invite you to view our website at www.FINEOS.com.

If the three challenges I listed don’t sound interesting to you, feel free to request a challenge for FINEOS to take on!