Albert Einstein famously feared “the day that technology will surpass our human interaction” and predicted “the world will have a generation of idiots” if it happens.
Fortunately, the group risk market is not too idiotic to date, though it has to be said that technology has featured less than in many other areas of insurance. The individual protection market, for example, makes significant use of price comparison sites, and most intermediary transactions are via a provider platform, whereas the group sector is considerably less tech-heavy in its approach.
Zurich head of market management, corporate risk Nick Homer says: “We are now seeing more use of provider platforms at the SME end of the group risk market, and the focus is shifting from just issuing quotes to providing end-to-end support, but at the larger end business is less transactional and there is a need for customer-level judgement.
“For employer-provided solutions the broking model will always require a process of several rounds of engagement and refinement, and so there’s only so much technology can do in the context of providing instant decisions. For large corporates, in particular, intermediaries will always want to have a very personalised engagement with providers relating to the specifics of the case.”
Crucially, the provider platforms that are being used for SME business don’t diminish the role of intermediaries, but they free up their time and allow them to service a wider group of clients. To reduce the intermediary’s importance would probably require the development of a revolutionary whole-of-market comparison site.
But the sheer number of quirks in provider propositions is unlikely to make this feasible and, even if it was, how could such a creation address issues like ensuring group risk packages fit in with company sick pay arrangements or with the pension lifetime allowance?
Mattioli Woods employee benefits team director Sean McSweeney says: “I’ve only heard of one organisation that claims to offer pan-industry quotes on group risk of any kind and I’m not convinced it’s fit for purpose.
“If providers could find a way of effectively approaching employers directly it could prove detrimental to advisers but there’s no evidence of it happening. I think the cost of sale is simply too high for providers.”
It’s hard to find any downside threat that technology is posing to intermediaries, as long as they’re prepared to adapt to its implications. But upsides are far easier to identify.
For example, recent cost reductions have made flex scheme technology much more affordable to small employers. Mattioli Woods reports that that a couple of years ago only around 5 per cent of its clients were large enough to access the technology to facilitate critical illness cover via flex but now the proportion is over 50 per cent.
Additionally, advanced technology is delivering a lot of the newer health and wellness solutions that are adding value to group risk products, making them easier to sell and resulting in existing clients wanting to increase scheme sizes.
Even pre-Covid, the likes of Unum and AIG were providing health and wellbeing apps offering features such as virtual GP and virtual physio services and enhanced mental health support. But during the pandemic things really shifted up a gear.
Recent Grid research shows that interactions with group risk embedded services – much of which moved online during lockdown – increased exponentially last year to a record 138,222 interactions, compared to 74,707 during 2019. These included employee assistance programmes (EAPs), HR and line manager advice, online GP services second medical opinion services and physical and mental health apps.
Howden Employee Benefits & Wellbeing head of benefits strategy Steve Herbert says: “Now, increasingly, even group risk providers not offering specific health apps are beginning to include free features like virtual GP services and mental health support on group risk products, and are sometimes extending them to non-scheme members and even their families.
“I can’t see a wholesale return to these being charged for post-pandemic because they have become increasingly appreciated as being part of the package.”
There is clearly still some way to go with this technological revolution, and the pace of change is such that virtually every group risk provider is crowing over at least one recent development.
Aviva is particularly proud of the positive feedback it has received for its DigiCare+ Workplace smartphone app, launched in September 2020. Powered by Square Health, it is designed to give employees a single point of access to the guidance and care they need to help, detect, manage and prevent physical and mental health problems.
Aviva head of distribution, health and protection Jason Ellis says: “It allows an employer to show its paternalistic side to their employees, and offers tangible and useful day-to-day benefits outside of the potential for a claim. HR professionals particularly love the access it provides to the annual health check.”
Legal & General highlights its January 2021 launch of Protect, a hybrid product that gives easy access to group protection cover 24/7, providing online underwriting in minutes to enable individual choice and control. It caters for employers with schemes of at least 500 lives who aren’t yet ready to buy expensive tech solutions.
Last month Legal & General also launched ONIX, a new portal that enables intermediaries to self-serve group life and income protection quotations and to go on risk for businesses of any size. It provides a smoother customer journey by removing the restrictions that plague current portals and make them clunky.
Also in August, Zurich teamed up with YuLife, which equips employers with a digital interface to oversee its incentive program and anonymously monitor staff’s engagement levels. Employers gain enhanced wellbeing services, enabling them to assess staff’s overall health and wellbeing risk factors and determine their wellbeing agenda accordingly.
YuLife’s technology also allows intermediaries to boost wellbeing by gleaning insights about customers as intermediary businesses integrate YuLife data into their own platforms and access a complete set of engagement metrics.
This type of facility really is core to the changing role of the intermediary. Because technological advancement has freed up more of their time, a significant proportion of this needs to be spent analysing data for clients.
The role of the group risk intermediary is very much in transition and, as it starts to become increasingly valued for its consultancy input, the term broker will start to seem more and more inappropriate.
Tech solutions driving greater coverage
Employers are increasingly seeing highly visible support services within group risk schemes as an attractive perk to engage remote or hybrid-working employees of all pay grades.
In a four-week period Prosperis has seen three employer clients extend their group life schemes from a limited head count to covering all employees as a direct result of wanting to make Unum’s Help@hand health and wellbeing app available to the whole workforce.
Appreciation of its virtual physiotherapy and virtual GP facilities to help employees working from home and reduce absenteeism have proved particularly important.
Prosperis head of employee benefit consulting Steve Ellis says: “Those intermediaries who don’t have a value proposition in this technological age are going to struggle, and the days of group risk intermediaries just being brokers are fast disappearing. It’s no longer death by spreadsheets as you can’t see wellness on Excel.
“So long as the price fits within a certain banding you can justify selling propositions that include a lot more than just an insurance benefit, and the market needs to switch business much less now.”