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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 agrosso@eisgroup.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

 

 

 


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