More employers are adopting technology to administer their workplace benefits and human resources. As a result, brokers are being forced to offer solutions to meet their group clients’ needs.
But the increase in demand has led to a burst of technology providers, each with its own business models, strengths and weaknesses. How does a broker choose the right technology solution for their clients?
The right choice comes down to addressing five simple statements, according to Kyle Reese, director of business development with Employee Navigator, Bethesda, Md. Reese’s company is a provider of benefits, HR and compliance software for brokers and their clients. He is giving a presentation on “Benefits and HR Technology Strategy for Brokers” at the National Association of Health Underwriters 2016 Convention this week in Albuquerque.
Reese distilled the five points in his presentation from tens of thousands of conversations he has had with health insurance brokers.
1. Not offering technology? That’s a dealbreaker.
The use of online technology for benefits enrollment and HR administration has become so popular with group clients over the past two years that it has become a dealbreaker when doing business with a health insurance broker, Reese said.
“Brokers struggling to either retain their existing groups or win new groups," he explained. "Smaller groups want the same technology that’s usually been available only to larger employers. So not offering technology is a dealbreaker.”
2. Offer only one system.
“Until recently, a broker might have wanted to pick the right system for their clients. Sounds good in theory,” Reese said. “But then you have a bunch of brokers on the road talking to clients about the strengths and weaknesses of different systems and they don’t know what the strengths and weaknesses are.”
Reese compared the offering of multiple technology systems to an office in which every employee uses a different email system. “Scheduling calendar invites would be a nightmare,” he said.
3. The system must be agnostic.
After a technology system is chosen, that system must be what Reese described as “agnostic.”
“As soon as a tech platform is purchased by an insurance carrier or broker, their competitors lose interest,” he said. “When a carrier buys a platform, it’s unlikely that their competitor is going to want to make it easy for their clients to use that platform. Or have a carrier say they want to make it easy for their competitors to sell their products on that carrier’s platform.
"As an example, Amazon didn’t get big because they picked one publishing house to sell books through – they sold books through all publishers."
4. The system must be cheap.
Technology should make things cheaper, Reese said. As more clients want technology, it must be cheaper.
5. Keep it under control.
“As technology becomes more important to the broker, that broker needs to retain more control over the technology,” Reese said. “In the past, they were able to outsource the administration of online enrollment or HR tools to a third party. But as more of a broker’s book of business involves using technology, that’s too important to give control of it to someone else.”
Technology used to be considered a “nice to have” but not a “must have,” Reese said. But that trend has changed. “The industry is saying that we don’t want to administer our HR department or our employee benefits out of a filing cabinet anymore.”
The insurance industry as a whole and its individual brokers may be a bit technology-resistant, but Reese said they are being forced into change to survive.
“Some brokers may be making a nice living and they don’t see where they have to change anything and they might be perfectly fine serving their existing clients and sunsetting their business and that’s OK,” Reese said. “But we don’t believe those will be the successful brokers five years down the road.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]
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