Providers have been looking to technology as a differentiator for years. Now intermediaries are getting in on the act. Edmund Tirbutt finds out how
Nobody is yet suggesting that robots will soon be wiping out jobs in the group risk field. But a clear divergence in approach to technology is emerging among group risk intermediaries, with some players making heavy investments in IT that arguably give them an edge in terms of both broking and other value-adds such as accuracy, MI and ease of use.
While most intermediaries are not looking much beyond developing flex capabilities, a small but forward-looking minority have created innovative new platforms.
PSHPC has invested nearly £1m in its Gladis system, launched in 2012, and reports that it has become very popular during 2015, with the number of administered schemes doubling to 193. The platform, which is free to clients, provides an enhanced service, allowing group risk membership data to be updated monthly and policy administration and accounts to be automated and accurate.
PSHPC managing director John Dean says: “Gladis speeds up claims and prevents disputed claims as the system points out if people aren’t eligible, ensures accounts are accurate and tells the employer how much it owes in premiums.
“Because of the accurate data, our average rate for Gladis clients is much better than for other clients. When we go to new-business pitches, having Gladis as a no-cost option is normally seen as attractive, although employers don’t actually have to use it.
“We raised the necessary funds by asking our private shareholders for more money and I feel Gladis has put us four or five years ahead of the rest of the market. With all the consolidation going on in the sector, we will eventually be left with half a dozen super-brokers who can afford to invest in technology.”
Data integration
Barnett Waddingham has also been at the forefront of technological advance with the launch of its BWell tool in April 2015. This sophisticated soft-ware collates and integrates data from absence management, employee assistance programmes, income protection and private medical insurance claims and occupational health reporting, together with the results of a broader survey. It then produces a holistic infographic report on which it can give advice.
Although available to the open market, usage to date has been limited to two pilot schemes, one internal and the other with the National House Building Council.
But Barnett Waddingham head of workplace health Carl Chapman reports that BWell is receiving a lot of interest. He meets three or four companies a week about it and expects 2016 to prove a big year.
Chapman says: “One of the aims in developing the system was to enable us to differentiate ourselves from other employee benefit consultants. We are aiming to make our mark with both technology and consulting, whereas some intermediaries are leading with technology, others with consulting, and most in the middle are just broking houses, which aren’t leading with either.”
Another intermediary initiative of note is Portus Consulting’s October 2015 launch of its Pure Benefits system, aimed at enabling new-to-market small businesses and third-party users such as accountants to access group risk and other products in a simple one-stop-shop format. It has been funded by “significant investment” from Portus, an IT partner and a number of insurers.
Portus Consulting director of consulting David Dolding says: “We could see a gap in the market for smaller companies to have accessible options for purchasing benefits as the commissions involved weren’t going to pay for employee benefit consultants’ time and insurers weren’t introducing the necessary systems. All the research we’ve done suggests it will be successful and it proves that even a relatively small firm like ours, which has only 42 employees, can still find the money.”
Affordability
Other intermediaries are doubtless having serious internal discussions about whether they can afford to invest in their own hi-tech solutions, and some may conclude that they cannot afford not to because the risk of being left as a bystander in this technological age is not worth taking.
Aon Employee Benefits head of broking and proposition for health and risk Matthew Lawrence says: “The exciting part is there is so much more to come. Considering the developments in digital diagnostic tools, digital platforms to connect all stakeholders in the health chain, next-generation wearables or online support networks for coaching individuals with different needs, the opportunities to rethink the traditional model of health and wellbeing seem limitless.”
Across the sector, man and machine are becoming increasingly acquainted and technology is playing a crucial part in enabling insurers to access smaller businesses where slim margins make whole-of-market reviews unrealistic for intermediaries.
However, progress has been neither seamless nor meteoric. Initiatives launched in a blaze of publicity often take many years to make their mark. For example, Canada Life’s Class system, launched in 2005 to make group risk products more cost-effective and easier to administer for employers with under 100 lives, managed to take on only 1,000 schemes during the first four years. It now has over 6,000.
Canada Life Group Insurance marketing director Paul Avis says: “It didn’t look like a great success initially but in 2010 we invested heavily in technology again and aligned it with a brand-new set of terms and conditions. The success results from a combination of the two, not just the technology.”
Similarly, a recent trend towards wearable devices able to measure and provide feedback and data on employees’ exercise levels, movements and sleep patterns, looks unlikely to be an overnight success.
i2 Healthcare director Simon Derby says: “I am sceptical about wearables because the people who tend to use them are the worried well who are already conscious of health issues. Certain corporates are into them but I’ve never seen a fat bloke like me wearing one. It’s a fad, and I feel interest will wane quite quickly.”
Aviva UK Health medical director Dr Doug Wright acknowledges that the data his company gets from wearable devices is still inconclusive due to lack of volume but he expects the devices to increase in importance in the future.
Human resilience
But even if technology usage in these and other areas increases exponentially, there is broad agreement that there are certain areas of group risk requiring empathy and interpretation where humans will never be replaced.
Ellipse chief executive John Ritchie says: “Machines will never be able to do claims. They can be used to get proof of death more quickly but will never be able to talk to people at the claims stage. I also can’t see them handling complaints when things go wrong.”
Zurich Corporate Risk propositions manager Nick Homer says: “The judgement of an underwriter is needed for larger and more complex risks and this is not yet being replicated by technology. Some automation clearly helps but one of the key things is the underwriter looking at the claims experience and establishing whether claims have been driven by things peculiar to that organisation.
“This judgement is unlikely to be able to be carried out by technology. Existing data can give you a rear-view mirror and some systems already capture some underwriting data. But the view of how this may impact in the future will always need an underwriter’s personal judgement.”
But Unum head of proposition development Andrew Potterton is unusual in his view
that technology could, in due course, encroach even on some of these supposedly ring-fenced manual functions.
He says: “We have all learned to never say never where technology is concerned. Medical underwriting is being done successfully through sophisticated reflexive questioning, so why shouldn’t claims, and even IP claims, be assessed and managed entirely online? Creating the question sets and interpreting the answers is established technology now.”
Technology extends to financial wellbeing
In October, JLT Employee Benefits broke new ground by entering a partnership with financial wellbeing specialist Nudge Global that allows it to provide Nudge’s financial education software to clients via its own platform. According to recent Nudge research, 79 per cent of reward leaders think financial education improves employee understanding and appreciation of rewards and benefits.
JLT head of rewards and benefits consultancy Andrew Drake says: “Wellbeing has traditionally been about physical wellbeing whereas now the shift is towards financial and mental wellbeing, which I believe are interlinked. Nudge can help employees understand the various financial challenges they may face and how benefits offered by their employer, including group risk products, can help them overcome them.
“We also expect data to become available that shows a link between addressing financial wellbeing and reduced absence, and therefore reduced income protection claims. We are always looking for the best technological solutions to help us deliver value with our employee benefits.”
