Voluntary Carriers Push Into Self-Serve Functions
By Cyril Tuohy
Voluntary benefits carriers, pushing further into the self-service model, will offer online information to customers by enhancing email, chat functionality and mobile apps as the Internet penetrates deeper into the life and benefits industry.
Carriers are also looking at developing more self-service transaction capabilities for claims and billing, according to research conducted on 19 voluntary benefits carriers by Eastbridge Consulting Group.
Many voluntary benefits insurance carriers are incorporating strengths from the individual and group markets, the survey found, while improving the customization of the experience and service level for employees.
The majority of carriers surveyed continue to outsource their administrative and service practices, according to the report titled “Administrative and Service Practices of Voluntary Carriers,” which polled the largest of the approximately 65 carriers active in the voluntary market.
Life and benefit carriers of all stripes have been adding self-service functions over the past few years as Gen X and Gen Y buyers, many weaned on the Internet, feel comfortable buying, selling and trading over the Web.
Surveys show that when it comes to life and benefits products, buyers want information about those products and services over the Internet. Even if they don’t end up purchasing them over the Internet, information allows them to browse at their leisure.
In an interview with InsuranceNewsNet last month, Ginger Bates, research director of Eastbridge, said that executives of voluntary benefits carriers believe they can gain a competitive advantage by serving customers directly, a trend magnified by the health insurance exchanges.
Inroads made by the self-service model will alter the role of brokers and intermediaries from one that simply comparison shops on behalf of employer-clients to one that is more consultative, Bates added.
Voluntary benefits are paid for entirely by the employee. They are a subset of the benefits marketplace and offered in addition to shared benefits in which the employer and employee contribute to premiums.
Examples of employee-pay-all benefits include vision, dental, accident, supplemental medical coverage, medical indemnity, critical illness, cancer, long-term disability and term life. Term life policies are the most common voluntary benefit sold in the marketplace.
Employers like offering voluntary benefits because they don’t contribute to premiums. For employees, voluntary benefits supplement the coverage they already have, but at a lower price because of group rates unavailable in the individual market.
Brokers like to sell voluntary benefits because they provide a new revenue stream, especially with thinner profit margins on the employer-paid side of the benefits equation, Bates said
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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