Four major digital trends are driving the employee benefits marketplace, leading to cost savings for employers and better employee engagement.
A report by Maxis GBN – a joint venture between MetLife and Axa – identified these major developments, which they said are changing the global employee benefits industry. These are
- centralised global benefits platforms
- data analytics generating increasingly sophisticated insight
- targeted wellness programmes using health technology
- insurtech innovations, such as AI, distributed ledger technologies and robotic process automation.
The report demonstrates that companies can see dramatic results by using this new technology and data analytics.
One Maxis GBN client, face with a very high loss ratio (130 per cent) in one jurisdiction was able to bring this down to break even after analysing health claims data to identify cost drivers and then use this information to make wellness recommendations.
This was despite wider medical costs increasing from 9 to 15 per cent over the same period.
Previous research commissioned by Maxis GBN found that 75 per of employee benefit professionals consider the use of data and new technologies the biggest growth opportunity for this sector – while eight out 10 (81 per cent) said this would shape product and service offerings.
One of the major catalysts of change in the EB sector is cloud-based benefits platforms. These allow multinationals to centralise administration as well as control costs, reduce overheads and improve risk mitigation.
However, Maxis research suggests adoption by employers at the global level is still lagging behind local-only usage, with only about 10 per cent of employers saying they use a benefits platform in every country.
However the company says it is confident this figure will increase significantly, given the need for more centralised control over benefits spend, the trend for flexible benefits and tightening regulations around data governance.
Similarly, expectations around distributed ledger technologies (DLTs) such as blockchain have accelerated over the past 12 months and it’s likely that DLTs will be increasingly used across key aspects of the insurance world including employee benefits to deliver smarter, instant contracts, better transparency and claims management, as well as greater flexibility for all parties.
Maxis GBN director, digital marketing & innovation Helga Viegas says: “We are seeing a significant acceleration of ‘digital transformation’ type activity in the global employee benefits space.”
He adds: “DLTS are one of the most exciting parts of a fast-digitising employee benefits industry even though it’s a change in the underlying IT infrastructure that will be fairly invisible to the end user. While a number of challenges remain for those looking to implement a blockchain solution, such as how to effectively exchange information between different systems, the business case is very strong.”
Maxis GBN launched a Data & Digital Innovation Lab in March this year to capitalise on these trends and have begun developing new digital products and services.