Carriers Pressured To Upgrade Tech Infrastructure

By Cyril Tuohy
InsuranceNewsNet

A “heat map” of the 2015 technology insurance landscape among group life and annuity insurers reveals agent portals, customer portals and distribution management as the top areas of importance. This is according to a survey published by the consultancy Novarica.

The top concerns within the agent portals are illustration and needs calculations, policy inquiries, group changes and group-level reporting metrics, according to Novarica’s report on business and technology trends in group life, annuity and voluntary benefits.

Agent portals allow agents, advisors and producers to log on to carrier websites and view customer policies. Agent portals differ from customer portals, which themselves are undergoing transformation as carriers upgrade those systems.

On the customer portal side, carriers have added educational materials, planning tools and side-by-side comparison tools of benefit plans and features.

Online accounting for variable products, and the ability to initiate transactions such as address changes and changes to policy beneficiaries are becoming more widespread through the customer portal, the report also found.

“Agent and customer self-service capabilities are increasing in importance, as are education and planning tools (including tools for needs analysis),” write authors Rob McIsaac, Novarica’s senior vice president of research and consulting, and Steven Kaye, associate vice president of research.

With regard to distribution management, compliance, commission management and producer self-service tools are appearing more frequently as carriers upgrade to adapt to producers’ demands.  

For insurance carriers, whose lifeblood is to distribute products through the agency system, upgrading distribution infrastructure is a “rolling project,” where sections of a company’s infrastructure undergo improvements block by block.

As a result, agent portal technology routinely appears at the top of the infrastructure improvement food chain. This is especially true in an era of low interest rates where investment revenue flowing to carriers is limited.

The harder it is for companies to derive revenues from investing, the greater the pressure to look to operation efficiency to turn a profit. Premium growth in the voluntary benefits market has grown steadily in the past several years.

The Novarica report also said that carriers are feeling even more pressure to upgrade infrastructure. This is driven by a number of factors, including plan sponsors becoming more price conscious, new requirements from the Affordable Care Act coming online, and advisors gravitating toward mobile platforms.

Monique Hesseling, a partner with the consultancy Strategy Meets Action, wrote in her Feb. 24 blog post that imperatives for insurers this year are designed to “enhance interaction and communication with policy owners and distributors.”

She wrote that the initiatives are driven by the need to lower costs, chase profitable growth and meet the needs of distributors and customers.

In the last four years, dozens of carriers have implemented new systems and processes in group life, annuity and voluntary benefits.

For competitive reasons, carriers are loathe to tip their hand about specific improvements they intend to unveil this year. But the past four years yield clues about where the industry has chosen to focus some of its resources.

In the agent portal space, Assurant Employee Benefits in 2012 introduced disability plan comparison tools to help agents and brokers assess different indexing methods, Social Security and return-to-work offsets, McIsaac and Kaye wrote.

Offsets affect long-term disability contracts when claimants, as they often do, return to work in a partial capacity before coming aboard full time again.

In 2011, Companion Life upgraded its website to include unique landing pages for agents. The landing pages give agents the ability to download voluntary enrollment illustration software, the Novarica consultants also wrote.

MassMutual’s Plan Smart Analysis, rolled out in 2011, assesses the percentage of employees on track to replace a specified level of retirement income and helps advisors and plans sponsors calculate a desired retirement income level, Novarica said.

In the customer portal space, where carriers have sunk resources into posting education materials and planning tools for group members, OneAmerica has incorporated calculators and improved mobile, self-service functions, the Novarica report said.

Guardian Anytime, the group portal for Guardian Life, enables brokers and policyholders to request changes online.

Standard Insurance’s customizable group life and annuity online educational modules help employers inform employees how policies work and how employees can estimate their coverage needs.

Novarica reported that upgraded commission and incentive compensation systems have been introduced by Reliance Standard Life, Sentinel Security Life and Principal Financial Group.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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