Running Toward Reality: Overcoming Traditional Group and Voluntary Strategies | Insurance Innovation Reporter
Denise Garth // November 1, 2021
Last week, we released The New Reality and Future of Group and Voluntary Benefits, a thought-leadership jointly authored by Majesco and Deloitte insurance experts. In the report, we look at the current state of Group and Voluntary benefits through the lens of both Majesco and Deloitte research as well as recent joint round-table discussions with leading Group and Voluntary Benefits insurers—and even a buyer of benefits! We then look specifically at the Voice of the Market Players—employers, employees and brokers. We round out the picture with the Future State of Group and Voluntary Benefits that will require new strategies, new products, new operating models and a new approach to technology.
In today’s article, we’ll assess what the report has to say about the current state. Are Group and Voluntary Benefits insurers running in the right direction?
Insurance spending—predictive or reactive?
Majesco’s 2021 Strategic Priorities research, based on post-COVID insurer survey results, reflected a rapidly widening gap between Leaders vs. Followers and Laggards when looking at their focus on key strategic initiatives in the past year and the next three years. However, there is the potential promise of change. In Deloitte’s Midyear 2021 US Insurance Outlook survey and report, even though 52 percent of respondents trimmed discretionary spending, often in areas such as talent acquisition, only 6% cancelled or postponed long-term technology projects, while 96 percent are accelerating digital transformation initiatives to deal with a “new normal.”[ii]
Furthermore, the top two activities prioritized by insurers to support financial and operational stability over the next 6–12 months involved implementation of new technology. The first, enhance efficiency (70%) and the second, improve customer experience (68%) prove that insurers are looking to technology to operate profitably across all functions. Furthermore, insurers are fueling more aggressive technology investment, with 68 percent of those surveyed planning to increase spending on data analytics and 59 percent increasing investment on artificial intelligence (compared to 40 percent in Deloitte’s last survey).
Spending tells a story. Insurers recognize that they must improve efficiency to control overall operations. It’s a reactive solution, but it’s necessary. Group and Voluntary Benefits insurers are seeing industry shifts and they are predicting their own outcomes. This has increased the focus on transforming legacy core with cloud-based next gen core designed to enable new business operating models and digitize capabilities. They realize that the employer and employee experience is going to be the measurement standard by which they will succeed. Can they become a dream insurer by giving employers what they need—non-traditional, API-enabled, non-constrained products that give data back as they use analytics properly?
Traditional products—One-size fits one group. What about the other groups?
In our next article, we’ll look at the future of the Group and Voluntary Benefits market. How and what are these new strategies going to effectively supply the market with what it’s looking for? Which products are the most likely to grow in use and interest among employers and employees? For a preview, be sure to read, The New Reality and Future of Group and Voluntary Benefits. For a data-specific view on how usage and analytics is shifting across the entire insurance value chain, be sure to view our most recent webinar, Insurance Moneyball: Winning in the Digital Age of Insurance.