Business

Why the Great Resignation Could Drive a Renaissance in Workplace Benefits

Published

1 year ago

July 9, 2022

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Bob Meier, EIS Product Solutions Manager, Benefits and Healthcare

While slowing considerably, the pandemic has spurred a boom in self-employment and career hopping, as people shift employers in search of greater opportunity and work/life balance. But, in taking these bold steps, employees typically give up their health, dental, life, disability and other employer-led insurance benefits, many of which are expensive and difficult, if not impossible, to replace outside of traditional employee benefits programs.

Whether they are changing jobs or leaving the workforce due to layoffs or retirement, most people would welcome the option to take their employer-provided insurance with them. For them, benefits insurance portability could significantly reduce their insurance costs and increase their sense of security. But, more importantly, they would benefit from not having to shop and qualify again for equivalent benefits, fear premium increases or being denied because of their lapsed coverage, age, or health status.

Should insurers be concerned? Well, it depends.

Bob Meier

Chinese philosopher, general, and strategist Sun-Tzu wrote, “In the midst of chaos, there is also opportunity,” which is why shifting employment trends could threaten some employers and insurers.

But, benefits insurance portability offers a big opportunity for those ambitious insurers and employers willing to grapple with the challenge, ensuring a competitive edge for years to come.

Why benefits insurance portability is a winner for carriers and employers that respond

From the employer’s perspective, benefits insurance portability increases the value of the total compensation plan they can offer and could give employers a competitive advantage in tightening job markets.

For insurers, portability increases their attractiveness to their employer clients by helping them attract and retain talent. In addition, the insurer retains the customer, who could continue to purchase from them as they buy homes, and cars, marry, save for college, and plan for their economic future.

Benefits insurance portability also allows insurers to satisfy those evolving customer demands in new ways, through cross- and up-selling opportunities and by helping close the growing gap in insurance ownership.

Basically, benefits insurance portability is a win-win-win and will be a huge part of the future of insurance and how individuals purchase and shop for insurance. But only if insurers are equipped to take advantage of this shift.

Why many insurers will struggle with benefits insurance portability

For insurers, the question is how to maintain a relationship with an individual who once was part of an employer group.

This is not merely a hypothetical as it immediately reveals the inherent limitations of legacy and even “modern-legacy” policy administration, billing and claims systems, which almost invariably are built around policy records and not customer records.

Unfortunately, this is where many benefits insurance technology platforms will fall short. The most-contemporary insurance core systems, aka coretech, avoid such limitations via customer-centric data structures.

Another approach would be to create new group policies for “solo-preneurs” in the same way as they do for large employers. However, this also would reveal limitations with most legacy systems, which lack the low/no-code tools that enable business users to configure and iterate insurance products rapidly. Instead, many insurers still rely on developers to code and refine insurance products, which can take many months or even a year to develop.

Finally, insurers will also need a platform that can scale to house both group and individual benefits products and synchronize the inherently different data that accompanies these different types of insurance products. Adding to the challenge is that legacy and modern legacy systems simply may not be capable of managing multiple insurance segments – or even lines of business – on a single platform.

To handle a hypothetical 300,000-employee case, convert it from group to individual, and port that data over, carriers need a burly – and scalable – rules engine and configurable workflows to change the billing structure and automatically generate new policies. Otherwise, the additional work could be staggering from the carrier’s perspective.

But benefits insurance portability doesn’t need to be cumbersome or costly. As today’s employees embrace more flexible work options, employers and carriers need to be equipped for it. To provide excellent customer and employer experiences for those new products, benefits insurers also will need cloud-native insurance platforms with open APIs.

What’s to come: Partnerships to create personalized bundles of products and services

Data portability – the ability to move data to, through, and from systems, apps, partners, and data providers at scale – is an integral part of insurance portability.

Data portability is critical because it ensures you can interact with insureds as individuals rather than as a cluster around a specific product. It’s also vitally important that insurers are able to consolidate and order data around those individuals, which only be done with the free flow of data between systems and departments.

Again, this will prove challenging for insurers saddled with legacy systems and those structured around insurance products.

Those insurers that are able to break free of the constraints of legacy systems and their archaic product-centric data structures, however, will find themselves liberated to completely reimagine the enrollment and other customer experiences enabled by data portability, which provides the foundation for new methods of distribution and sales, like embedded insurance and ecosystems.

Consider the simple and unified presentation of embedded insurance and its impact on the customer experience. Embedded insurance positions insurance products as an add-on purchase at the point of sale and in a context where the protection makes sense. The $40 extended warranty Amazon offered with your student’s new laptop? With your payment details at the ready, it’s a no-brainer for most of us. Or $5 trip protection as you’re booking your flight, room, and rental car after two years of Covid confinement? Done.

Just as insurers and their partners are personalizing, suggesting, and bundling products and services in the above scenarios, ambitious insurers are looking to improve the enrollment experience with data-driven, personalized, and bundled insurance products.

Paper-based brochures, checklists, redundant and nonsensical application forms and underwriting questions are soon to be the kiss of death for insurers. The reason? Employers and employees increasingly expect the same elegant customer experiences they have with banks and retailers from all of the companies they do business with.

Insurers already are partnering and swapping data, sometimes referred to as “The Great Crossover.” Such an arrangement already exists between John Hancock’s Vitality Plus wellness-incentive program and Allstate’s Drivewise telematics program.

Essentially, data gathered through fitness watches, bio-monitoring bands, and a meditation app can make Vitality participants eligible for lower premiums. Since the partnership between John Hancock and Allstate, Vitality participants also may now qualify for further discounts based on safe-driving data gathered and shared by the Drivewise program.

Partnerships between insurers to offer a more complete portfolio of coverages make a great deal of sense considering how difficult and time consuming it has been for insurers to launch new products.

According to McKinsey & Co.’s “Ecosystem 2.0: Climbing to the next level,” insurers are eagerly pursuing partnerships and ecosystems to expand their product portfolios, make their products more attractive to people, and offer customer experiences that simplify buyer journeys, increase retention, and create product and service bundles that are data-driven, attractive, and drive revenue growth and customer loyalty.

The sticking point for many insurers, though, are legacy systems, with their hard-coded limitations and lack of openness. Ambitious insurers, however, are freeing themselves from these antiquated technologies through either greenfield innovation or digital transformation on API-rich, cloud-native policy administration and insurance core systems.

Employers, insurers and insureds all want the same things: simplified customer experiences, data-driven personalized options, and the security of stable coverage, pricing, providers, and market share.

For ambitious insurers, the great resignation could be the catalyst to fill the gaps between products and needs. For them, benefits insurance portability just makes sense and very well could spur a renaissance in workplace benefits.

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In-platform solutions are only a short-term enhancement, but bespoke AI is the future

Published

13 hours ago

September 27, 2023

editorial

By Damien Bennett, Global Director, Principal Consultant, Incubeta

If you haven’t heard anyone talking about artificial intelligence (AI) yet, then where have you been? Conversations about AI and its advantages to society have been a key talking point over recent months, with advances being made in the generative AI race and ChatGPT opening a whole plethora of possibilities. Many have highlighted the advantages of AI, but notably it’s ability to create human-like content.

But these discussions have only scratched the surface of what AI is capable of doing. It is for far more than just essay writing, adding Eminem to your rave and photoshopping dogs into pictures.

In marketing, we have been using AI for years, for everything from analyzing customer behaviors to predicting market changes. It’s enabled us to segment customers, forecast sales and provide personalized recommendations, having a huge impact on how our industry works.

It is even, for the more savvy marketers of the world, becoming a key tool in maximizing budget efficiency – which is apt, considering over 70% of CMOs believe they lack sufficient budget to fully execute their 2023 strategy.

Now, as AI becomes more intelligent, the number of efficiencies it can unlock continues to rise. Not only can it help brands get the most out of their available resources and identify any areas of waste, but it can also help highlight new opportunities for growth and maximize the impact of your budget allocation.

The trick, however, is to veer away from the norm of using in-platform solutions with a one-size-fits-all approach and create your own, bespoke solutions that are tailored to your business needs.

Pitfalls of in-platform solutions

In-platform solutions aren’t by any means a bad thing. In fact, built-in AI tools have become increasingly popular, owing to their ease of integration, user-friendly interfaces and minimal set up requirements. They come pre-packaged with the platform, offering the user the ability to leverage AI technologies without the need for in-depth technical expertise or the upfront cost of building a solution from scratch.

However, the streamlined and accessible nature of in-platform AI solutions comes at the expense of complexity and customization. They are designed to serve a broad user base, but for the most part are built using narrow AI solutions with predefined features and workflows.

This makes them great for assisting with common AI tasks, but they lack the flexibility to tailor functionality towards unique business requirements or innovative use cases, limiting the potential efficiencies and cost savings that can be unlocked. Additionally, if a business’ competitors are using the same platform, they are probably using the same AI solution, meaning any strategic advantage gained from these will be reduced.

Bespoke AI solutions, on the other hand, may carry a higher initial investment – but can offer a significantly more attractive ROI over a short amount of time.

Why customized and adapted AI is the key

The difference between bespoke AI and in-platform solutions is similar to that between home cooked food and a microwave meal. Yes, it is more time consuming to prepare, and yes it likely carries more of an upfront cost, but the end result is going to be far more appealing and will carry more long-term value (financially… not nutritionally).

That’s because bespoke solutions, by nature, will have been tailored to address your brands specific needs and challenges. These custom-built tools allow for much greater efficiencies by streamlining workflows across different channels, automating more complex tasks, and providing deeper, more relevant insights.

The increased level of optimization can significantly improve productivity and reduce operational costs over time, offering a higher ROI. The increased flexibility of bespoke AI also allows brands to implement innovative use cases that can significantly differentiate them from their competitors.

The data analyzed can be specifically chosen to match business requirements, as can the outputs of the AI tool, providing a significant advantage when understanding and acting on the insights provided.

Additionally, these tools are, by nature, more scalable. They can be updated, upgraded and expanded as needs change, ensuring they continue delivering value as the business grows. They can also be designed to integrate with any existing IT infrastructure, from CRM systems and databases to marketing platforms and sales tools – leading to more efficient and effective decision-making.

Managing finances with AI

It’s no secret that AI in marketing automation has, and will continue to, revolutionize the way marketing is done. It has a bright, if slightly terrifying, future and can help CMOs to unlock new efficiencies, maximize the impact of their budgets and increase their ROI. And as this technology becomes more advanced, its impact will only increase.

But we already know that…and so does everyone else.

So, in order for businesses to make themselves stand out from the crowd , they must look to fully adopt the power of AI. Creating a customized and unique AI solution could be the way to set yourself apart from your competitors. A bespoke AI tool can provide brands and businesses with features unique to them and their business needs. As a result, companies will benefit from more useful data and better results to make more data-driven decisions for their business. Ultimately, this will help brands to maintain a competitive edge over their competitors, deliver ROI and most importantly optimize their budgets.

Business

Exploring the Transformative Potential and Ethical Challenges of AI in Wealth Management

Published

1 day ago

September 26, 2023

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Nuno Godinho, Group CEO of Industrial Thought Group

In recent years, the advent of AI has sparked both excitement and scrutiny within the Wealth Management industry. The technology’s capabilities, including but certainly not limited to generative AI algorithms like ChatGPT, offer a new dimension to data analysis, market prediction, and portfolio management. However, while it presents a promising avenue for enhancing decision-making and elevating client interaction, AI also carries inherent challenges that demand careful consideration.

Benefits of AI in Wealth Management:

In a world where CX is key, AI enables wealth managers to provide personalised advice, improved portfolio performance, real-time insights, and convenient access to information and support. Previously it has been impossible for advisors to deliver hyper-personalisation at scale; now, AI-driven customisation lets them tailor investment strategies and recommendations to their clients’ unique financial goals, risk tolerance, and investment horizon.

AI algorithms can also analyse vast amounts of data to identify trends and opportunities, resulting in potentially higher returns on investments. And, more widespread use of automation will gradually reduce the cost of wealth management services, meaning higher-quality investment advice at a lower price. This is critical as firms fight to stay relevant for modern investors disillusioned by traditional advisory firms and private banks.

Relationship-wise, there are many other advantages. AI-driven data analytics make it easier to gain a deeper understanding of an investor’s needs, preferences, and behaviours, all of which help to build long-term relationships. Through predictive analytics, firms can differentiate their service and proactively identify new investment opportunities, such as emerging market trends or underperforming assets. At the same time, chatbots and virtual assistants facilitate constant communication to answer queries and increase engagement. By strategically integrating AI technology into their operations, firms have the power to optimise top and bottom lines, strengthen client connections and position themselves for long-term growth.

Navigating the Ethical and Practical Challenges:

While AI holds remarkable potential, major obstacles must be overcome. With AI’s reliance on large amounts of data, ensuring client data confidentiality, managing consent, and complying with global data protection regulations like GDPR are significant challenges. Another issue is algorithmic bias – as AI learns from data, it may inadvertently perpetuate inequalities or biases present in the training datasets used. Vigilance is necessary to ensure that AI systems don’t amplify these issues. A key concern is the absence of standard governance, leading to a lack of accountability and transparency. Black-box algorithms can make decisions without providing clear explanations for their reasoning, making it difficult for clients and regulators to understand and trust AI-driven outcomes. Overall, the responsibility for AI-generated recommendations remains complex, requiring collaborative efforts to establish robust regulatory frameworks.

Striving for Data Integrity and Reliability:

The efficacy of AI-driven solutions hinges on the quality of training dataset they are supplied with and rely upon. Therefore, ensuring accurate, unbiased, and comprehensive datasets is paramount to generating trustworthy insights. The absence of standardised data sharing can lead to skewed results, ultimately impacting the quality of AI-generated advice. Transparency in data usage, validation, and generation reasoning will be pivotal to cultivating client trust and minimising systemic risks, which ties back to the absence of standard governance, as the output from AI-generated advice will only be as good as the data sets provided. We need to understand the “lineage” of all data used and generated by the algorithms. Until the industry can come to some accord on how we plan to use all of our respective data, it will be prone to various biases and fragmented advice, which will lead to liability and reliability issues down the line. It’s worthwhile wondering whether we can see the industry opening up in an age of data equals value.

The Role of Collaborative Partnerships:

Amidst these challenges, collaborative partnerships emerge as a potent avenue. Established wealth management firms can harness the expertise of FinTech AI companies to augment their capabilities while mitigating the risks associated with AI adoption. A symbiotic relationship, where innovative AI solutions are developed by trusted partners, helps safeguard against potential pitfalls and aligns with the pursuit of ethical, data-driven decision-making.

Looking Ahead: Striking a Balance for Sustainable Progress:

As we journey into the AI-powered future of wealth management, it’s evident that a balanced approach is essential. The integration of AI has the potential to expedite the transition to wealth management 4.0, revolutionising personalised client experiences and advisory services. However, this progress must be underpinned by clear ethical guidelines, data integrity, and collaborative partnerships. Striking this equilibrium promises not only a more informed, efficient, and personalised industry but also one that upholds the principles of transparency, accountability, and client trust.

In conclusion, AI’s impact on the wealth and asset management landscape is profound, offering unparalleled insights and opportunities. While navigating challenges will be crucial, a collective effort to harness AI’s power while ensuring its responsible application will pave the way for a resilient, future-forward industry.