How Mass Personalization Will Open the Small Business Benefits Market
Anthony Grosso | December 13, 2017
Looked at from a marketing lens, your personal truth is that you are a demographic of one. And anyone who can grasp that and understands your needs and preferences will score some serious points, and wallet share. This type of mass personalization could be key to successful benefits insurance small case marketing on Main Street.
The concept of mass personalization is enjoying tremendous success with tech-savvy retailers selling wine, clothes and even prescription eyewear over the internet. The way they work is each company gets to know and understand you as an individual. Either by answering some of their questions, providing your measurements and/or speaking to your “personal” representative.
Then, somewhere, somehow, this personal information is stored and some algorithms are used when they put together a monthly offering or a real-time offering which is tailored specifically to your interests. Your offer appears, you accept it, it arrives in the mail and you happily pay. You barely notice the payment, only your mass personalized products. So why is the concept of mass personalization within insurance non-existent? There are several reasons and the most prominent for this discussion is legacy technology.
Being personal on Main Street
First of all, new product introduction in general – let alone personalization of that product - has historically been a serious challenge for benefits insurers. According to Celent, a new product introduction on legacy system could cost millions and take many months to accomplish. Furthermore, depending on the age of your legacy system, your ability to introduce new products could be even more severely restricted, says Celent. Expect increased complications if attempting to introduce products your legacy system would have never anticipated, such as pet insurance, merchandise discounts and identity theft.*
In conjunction with putting new systems in place for flexible and fast product introduction and changes, benefits insurers can also begin to consider personalization of product and there is one segment of the market in particular where it can be a true differentiator: small business. In the small case market, the ability to bundle products into plans that are tailored to the unique needs of a diversity of small business operations is important. Great opportunity exists in this underserved market. Approximately a third of the total US workforce are employed in firms of 2-100 employees yet 36% of small employers to not offer ancillary benefits. **
Your goal should be to make the shop down on Main St. feel like they matter to you. Fortunately, the next wave of product design can provide insurers with mass personalization of their product offering to employers and employees that will open new doors.
Thinking it through
To get it right, carriers should expect their product offerings from core to voluntary to adjust to the needs of each demographic within the small case market. It’s not a one-size-fits-all approach; a small accounting firm has different protection needs than does a small construction firm. But what they both need is the experience of simplicity. Carriers should be able to bundle the appropriate set of products and plans per market segment with the limits and values preset. This is not saying the coverages are simple; rather, the complexity is already thought through by the carrier and presented simply to the small business owner. As in my own mass personalization experience, the first task is to understand your customer then sort and pack the right products to fulfill their needs.
The problem is that the legacy technology of most carriers essentially hard-codes their plans into their systems. Some carriers very literally have thousands of these plans, somewhere hardcoded in compiled code, never able to be untangled or reproduced and modified and leveraged for mass personalization. Add to this conundrum the simple fact that it was never contemplated that their systems store actual customer information such as interests, needs, preferences, measurements or anything else not specifically required to facilitate the sale and support of the actual hard-coded insurance product being sold.
Easing the pain of plan building
For underwriters, the task of creating customized plans, packages and options is a difficult and often manual process. It slows down the new business processing cycle times and creates potential problems for the carrier when the sold plan may not be fully supported by the carrier’s systems.
The solution is a plan and package designer tool with which non-IT users are able to configure an unlimited number of plans and packages all generated from the base product. Each plan can have pre-defined default data pre-populated to eliminate error-prone manual entry. And embedded in each plan is a multitude of rules which will ensure that any plan option that was sold is compliant with the company’s product filings and is fully supported within the system.
To make the underwriter experience particularly user-friendly and flexible, a spreadsheet-paradigm rules engine can be introduced into the plan creation process. It will streamline product development by configuring an unlimited number of product, plan, coverage and package eligibility options and parameters using spreadsheets. Time is saved and opportunities are won when business users themselves can create a new plan, import plan data, make changes, and save it back into the policy administration system fully ready for production.
When all is well down on Main Street
Mass personalization is a perfect fit for the small case market. It results in customers thrilled with their personal products but also provides a significant reduction in new business cycle time, improved underwriting throughput, and delivery of a better experience to the company’s producers and customers.
Anthony Grosso is vice president of Product and Industry Marketing at EIS Group, and can be reached at email@example.com.
Footnotes: * Celent – The Changing Technology Landscape of Group/Voluntary, October 2016; ** Eastbridge Consulting Group, Voluntary and the Small Case Market, Spotlight Report, October 2016
- Brewer Lane Ventures Launches and Hires Insurtech Vet Martha Notaras as Managing Partner
- 2020 GIA Cohort Launches on January 14
- The November/December 2019 ITA Pro is here!
- Electronic Chat with Joshua Snead
- Electronic Chat with Wendy Aarons-Corman
- Simplifying the Move to a Third-party Print Provider
- Take a Business-Driven Approach to Continuous Improvement for Core Systems and Processes
- Electronic Chat with Ron Glozman
- Guidewire’s Data Guru Mike Byam on How Insurers are Using Internal and Third-Party Data
- Electronic Chat with Russ Bostick
- Electronic Chat with Rock Schindler
- Electronic Chat with John Siegman
- Electronic Chat with Martin Burlingame
- Insurtech Landscape 2019: Top 5 Takeaways
- Grinnell Mutual Tackles Massive Transformation -- in Stride
- A Candid Conversation with Paul Mang
- SageSure Insurance Managers Improved Competitiveness by Consolidating Payments to a Single Digital Platform
- Digital Does Matter in Insurance-- And Insurers are Missing the Mark
- The 22nd-Century Insurer: Taking a Cloud-First IT Approach
- The September/October 2019 issue of ITA PRO magazine is now available in digital format here:
- ITA Pro Magazine May/June 2019
- Spotlight on the 2019 IASA Conference
- ValueMomentum Selects Erie as Site of Regional Development Center
- Capgemini and Majesco Become Alliance Partners
- Electronic Chat with Dr. Dan Shoham
- Electronic Chat with Todd Greenbaum
- Martha Notaras: The “Outsider” with an Amazing Inside View
- Electronic Chat with Larissa Tosch
- Martha Notaras Will Join ITA LIVE 2019 as a Keynote Speaker
- Five Things to Consider When Evaluating Your Cyber Risk
- ITA Pro Magazine, January/February 2019
- Synergy Between Insurers' IT and Analytics Teams Key to Operationalizing Insights, Says Novarica
- Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
- ITA Announces 1st of Three Keynote Speakers at ITA LIVE 2019
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- SPLICE Software Included in "10 Most Trustable Insurance Tech Solution Providers to Watch in 2020" by The Technology Headlines
- Insurance Marketing & Communications Association Launches Exclusive Council for CMOs
- Slice and SOMPO Release First On-Demand Insurance Product in Asia on ICS
- ClarionDoor Adds Jason Routson as New Director of Sales
- BriteCore Names New Chief Product Officer and SVP of Services
- Swiss Re Corporate Solutions and kWh Analytics Announce Insurtech Collaboration to Accelerate Solar Adoption
- Origami Risk Names David Duden as Strategic Relationships Executive, Core Solutions Division
- The Co-operators Selects Guidewire InsuranceSuite Cloud
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2020
ITA LIVE 2020 –SAVE THE DATE!
April 5th – 7th, 2020
The Diplomat Resort
Become a member today to receive updates – www.itapro.org/MR
BLOGS AND COLUMNS
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Case study of how a Fortune 500 employee benefits provider serving 35 million insureds throughout the U.S. and Europe transitioned from in-house... READ MORE
- Vendor Views