There was a time in the not-so-distant past when Group and Voluntary Benefits were known for their stability and consistency. The players were known. The products were established. Benefits packages didn’t vary much from year to year. The employee was simply concerned with the cost of premiums, particularly for medical, versus their annual pay increase. Year to year, not much changed. (If you are under 30, you may not believe this…but employees often stayed with their employers for life!) Group and Voluntary Benefits insurers lived in a semi-blissful state as Brokers working with HR teams acted as agents, bringing in cafeteria-sized groups of policyholders.

The difficulty was that it wasn’t an easy market in which to gain entry. There were far-fewer voluntary products then than there are today. The top insurers cornered the market. They knew how to please employers, how to make a profit and how to protect their turf.

Then, a dam broke. First the ACA changed healthcare. Then InsurTech. And now the convergence of talent competition, tech advancements, wellness initiatives, wealth management, multi-generational employees with varying different needs and expectations has made group and voluntary business into a new land of prospecting and opportunity. Boardrooms started buzzing with rumors of gold in the hills, only they weren’t rumors. Voluntary and group benefits were and are a real area of financial opportunity. The top players still exist, but there are a growing number of insurers entering the market, expanding the products they are providing, and creating new options in how they are packaged to meet the unique needs of a highly diversified and competitive employee base. 

What’s so wild about Group and Voluntary Benefits markets?

InsurTech could rightly be considered the greatest of the Wild West insurance opportunities, but in terms of opening up new markets, Group and Voluntary Benefits are making their own case for a land of new opportunities.

Majesco recently commissioned a Celent report to assess the opportunity as a part of our thought leadership and strategic marketing to provide another point of view on the future of insurance.  We wanted insight on the opportunities, the technology platforms and ecosystems required to capture the market opportunities now unfolding.  Celent’s report will be available in the next few weeks, but before it releases, we want to lay the groundwork on the high-level challenges and benefits of the new Group and Voluntary Benefits market. What is shaping the new need? What is today’s employer looking for? What is different about life for today’s employee? How do any of these answers relate to Next Gen Group and Voluntary Benefits core platform development?

Next Gen core platforms as an answer to channel expansion (and everything else.)

At Majesco, we talk a lot about convergence and its impact on insurance. Real innovation happens at the point of convergence. Let’s look at how convergence is building opportunity in the Group and Voluntary Benefits market. Right now, all of the factors we list below are real pressures and opportunities that we have highlighted from our research within the market that happen to be creating points of convergence. These points all touch upon issues that can be solved with a Next Gen platform approach.

There are dozens of additional reasons that Next Gen Core Platforms are going to rewrite Group and Voluntary Benefits insurance, but the most basic is this:

Technology has advanced to the point that it fits the gaps created by convergence issues.

Every customer, employer and insurer need can now be met with next gen insurance systems that are architected to fit. Insurers needed systems to be adaptable enough to create new products and flexible enough to stand alone or fit into partner platforms. They needed solutions that would provide the same high-level digital experiences that they may be giving to individual policyholders who purchase through agent, broker or online channels. They also needed systems that could effectively transition from “group” underwriting and purchase to “individual” underwriting, purchase and administration. This would allow for policy portability and a greater degree of population understanding and control.

Is there a formula for Group and Voluntary Benefits success?

At the beginning of this year, in my January 14th blog, I outlined how platform function fits the future of insurance.

“Constantly evolving technology, customer expectations and products are forcing the insurance industry to reevaluate and rebuild their business models and business processes in order to survive in an increasingly competitive market…Companies adopting these digital platforms for their business and operating models are gaining a decisive edge over competitors and accelerating their digital maturity. Companies must develop digital capabilities so they can create unique and personalized solutions that help them adapt to a world in a state of rapid flux.”

The answer to the Wild West in Group and Voluntary Benefits is to digitally prepare for that state of rapid flux. In the same article, we covered the central value proposition for any insurer that is wanting to prepare for success. We called it the The Multiplier Effect — Connecting with Other Platforms and Ecosystems.

“With the breadth and velocity of change in technologies, customer risk needs and engagement expectations, it is nearly impossible for any insurer to possess, nor afford the acquisition of, the resources and capabilities needed to keep up with the changes, let alone anticipate and stay ahead of them. A platform-based insurance business model that leverages platform technologies and a digital ecosystem of diverse third-party partner services completely removes this barrier.”

This is true for all insurers, but it is must be considered the new core philosophy for Group and Voluntary Benefits insurers. With this foundation of understanding, we can now read the forthcoming Celent report and listen more readily to how the industry trends and the technology capabilities are converging to make this a momentous time of platform growth. Insurers will find within the report, not only the deeper details of how technology will work as an enabler, but also the practical paths for insurers to take in transition. Celent will cover everything from Staking Out a Position to Architecting for the Next Gen Ecosystem. We’re looking forward to its release and we’re sure you’ll find it enlightening and consistent with what we have been sharing from our research.   

If your company is considering a move into Group and Voluntary Benefits or you are already a Group & Voluntary insurer wanting to prepare for the future, be sure to sign up today for our August 26 webinar, Untapped Market Opportunities for Group and Voluntary Benefits with Diversified Plays, Open Ecosystems and Next-Gen Platforms. Joining me in the conversation will be Seth Rachlin, Executive VP, Global Insurance Industry Leader, Capgemini and Jamie Macgregor, CEO, Celent.

[i] Group Insurance Broker Sentiment Survey, Deloitte, December 2020

[ii] Group Insurance Benchmarking Study, Deloitte, 2019

[iii] Castrillon, Caroline, Why Millions of Employees Plan to Switch Jobs Post Pandemic, Forbes online, May 16, 2021

[iv] Payne, Emily, Charts: Voluntary benefits on the rise, BenefitsPro website, March 29, 2021, see this chart for more information.

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