Time for the white heat of group risk
Technology is changing the way the entire economy operates and the group risk sector is no exception. Stephanie Spicer sees both benefits and threats for intermediaries
From smarter data management to more effective member communication programmes, the roles technology can play in growing the group risk market are wide and varied. Efficient processing of data will allow intermediaries to spend more time consulting and less time dealing with administrative hiccups, while on the communication front, the potential for new media to transmit messages to employees, employers and advisers is vast.
Such were the views of delegates at the recent Corporate Adviser industry forum on Growing The Group Risk Market The Role of Technology.
“We have recognised that social media specifically is how a lot of people communicate through analogue, twitter, iPads and iPhones and Blackberries,” said Paul Avis, sales and marketing director, Canada Life Group Insurance. “The world is moving on from us issuing a technical bulletin to a world where you have instant information about the things of interest to you. So the challenge for us as providers is to make sure that what we do is relevant because the volume of information we can provide is massive.”
The next challenge he says is to work on the employer and employee communications. “We have tech guides on group life and critical illness which are 72 and 60 pages long respectively. That is fine for the technical people in the organisation to read but we need to make the employer and employee information really simple and the plan is to use these new media to do it,” he said.
Adviser delegates at the event said that the need for the employer and the employee to understand the value of the product is key. Equally important is communicating the message to the employer of what they are getting in terms of return on investment (ROI).
While the use of technology to spread the product value message is well under way, when it comes to the ROI piece, there is some progress to be made.
But advisers and insurers agree that new technology is not the only valid form of communication, as without recourse to older, more traditional methods there is a risk of alienating those whom new media has passed by.
“The problem for a lot of the generation of mid 40 year olds is that a lot of the technology has passed them by,” says Chris Ford, director of group risk at Jelf Group. “But many of the younger generation live on Facebook. So you have to use all the social media available and then structure it to the right client because every client is different.
“If you have a client where the staff are all internet geeks and office based, the internet is the way to communicate. But for a client which is a high street retailer with shops all over the country and different categories of line managers, the staff won’t be able to access the internet or intranet in the day because they are in the shop, but they may at home, or it may be that twitter or texting works for them.”
That said however, in a straw poll of the panellists at the event it became apparent that advisers expect new media to become more prevalent. When asked if they thought that within three years employees would want to receive group risk benefits information through their mobile phones or other portable devices, just 25 per cent believed only a tiny minority would, with 50 per cent thinking a considerable proportion of employees would expect to be communicated with in this way, while 25 per cent said this would not be what staff wanted.
“The problem for a lot of the generation of mid 40 year olds is that a lot of technology has passed them by”
Carl Chapman, consultant at Bluefin said there is a risk of losing the paper approach altogether.
“People are used to receiving payslips online, for example, but I do wonder how many actually look at them that way rather than when they have them land on their desk and they have to open the envelope. The same goes for total reward statements for flexible benefit schemes the statement should be paper based on the desk so they actually read it.
“Technology is not going to go away and it is going to drive this industry forward but there needs to be a line somewhere. For example, the intermediary has a platform, the insurer has a log-in platform, the client has an intranet, so with all these different platforms it can get very complicated for the employee. Very few have a single sign-in process or adequate links to all these platforms.”
A valid point in the midst of all this high tech, immediate access world is that there will always need to be a pause in the flow of information for the reason the market loves to dread compliance.
“Whatever media, frequency, whatever format you want, is where we have to get to,” said Ford. “Whether it be hard copy, face-to-face, telephone, online, webcast, tweet, whatever level of information there will be an army of people employed in this world of immediate media to do all this communicating. But insurance will always be a heavily compliant world, so the immediacy will always have to go through the same governance and TCF considerations as any technical product of the time. It will never be as immediate as in the non-compliant world.”
What will be welcomed however is the time normally spent on administration that technology should free the adviser from.
Chapman envisages a platform system which will take care of the administration, the underwriting and the claims.
“You get to the point where a platform is run by the intermediary, the employer feeds data onto that platform, the insurer can tap into that platform and pull data out of it, work out the claims, underwrite the claims, feed the information back in to the platform that the employers then log back into. It is almost taking away the middle man. It frees up the adviser time to do the consultancy piece.”
Karen Gamble, director health and wellbeing at Heath Lambert Employee Benefits agrees and sees more time saving still beyond the group risk piece.
“By using a platform owned by the adviser other products such as pensions and private medical insurance can be put through the same technology. But are we making a two tier market among those brokers dealing with say three or four corporate clients of 200 lives max, who don’t have the technology? We are in danger of segmenting our own market.”
For Avis there are three stages to the technology issue: administration, cross-selling and linkage with all the platforms, such as payroll and flex.
“We are doing the administration but we are nowhere near cross selling and using the datasets that we currently have in our spreadsheets. And to get to the linkage is going to be chaos because of the functionality, application protocols and all the rest.”
“Whatever media, frequency, whatever format you want, is where we have to get to”
Other financial services industries use technology far more than the group risk sector, said delegates. For example, mortgage intermediaries can actually compare products with clients through an iPhone app, something that seems light years ahead of what is available to group risk intermediaries.
But there was a view amongst delegates that too much technology could actually present a threat to their very businesses. If, for example, group risk products could be compared on a platform akin to a price comparison site, that would lead to a commoditisation of group risk products that could see a race to the bottom with price the key driver.
There was a consensus among delegates therefore that the news that the Grid simple quotes system is not to be developed further is a good thing.
David Dolding, head of consulting at Lorica Consulting, said: “That will protect the position of specialist intermediaries. We have made the investment to train our staff in group risk and we have dedicated teams to write proposals to go to insurers. There was a feeling within Lorica and certain other organisations that if a quotes engine was made available to the whole intermediary market, some people would be benefiting for free from our investment and the investment of other firms like us.”
It could be argued that a group risk industry that constantly calls for more growth in the market is holding itself back as a result of this resistance to an industry-wide solution, although delegates agreed that comparing group risk products is not as straightforward as comparing mortgages, for example.
For the industry the conundrum remains that providers are being asked to provide simple products and simple solutions, yet the group risk market is technical rather than transactional. Better use of new technology will be part of the solution, but it will not be a cure-all.