Other parts of this series:
Consider this fact: 45 percent of workers say they have less than $1,000 to pay for out-of-pocket medical and illness expenses, while 25 percent have less than $500. These numbers represent a growing appetite for supplemental healthcare offerings. What’s more, for a variety of reasons the Affordable Care Act will undoubtedly stimulate the voluntary benefits marketplace further. A massive opportunity for voluntary benefit insurers? You bet—but only for those life insurers who are ready to pounce.
What it will take to win in the voluntary benefits market
The following five actions will put tomorrow’s most able voluntary benefits players on the path to success:
- Develop a clear and concise segment, channel and positioning strategy. Recognize what you do best and stay focused. Each employer market segment behaves uniquely, requiring different strategies, capabilities and competencies. Pursuing an employer with 5,000 employees sounds exciting. However, it requires a much different approach than for a small business.
- Offer a broad portfolio of benefit solutions that meet multiple employee needs in the segment(s) targeted. According to MetLife, nearly half of employers that currently offer voluntary benefits say they are likely to increase the number of products offered in the next two years. Even more encouraging, perhaps, is that 62 percent of surveyed employees report they are interested in having their employer provide a wider array of voluntary benefits than is currently offered. Clearly, having a broad portfolio of voluntary products will be a competitive advantage. To reach the underserved middle market consumer, life insurers will need to develop products for the unique needs and the more limited spending power of this segment.
- Make it easy and seamless for employers. Carriers that combine product, enrollment, billing and administration into a single, seamless package will be rewarded. For that critical first sale to employers, we believe this will be a source of sustainable competitive advantage.
- Re-imagine, simplify and personalize the shopping and ongoing customer service experience for employees. Today’s employees are connected consumers. They’re connected to social networks and like-minded consumers. They’re connected to brands. Replicating a face-to-face experience on a self-enrollment platform is now possible. This concept of mass personalization will enable forward-thinking carriers to infuse every employee interaction with greater engagement and intimacy.
- Allow employees to enroll at any time. The path to higher participation levels lies in allowing employees to enroll at any time. It would transform what is today often a very static marketing process into one that becomes a direct-to-consumer opportunity for carriers.
The workplace is quickly emerging as the most efficient and effective channel for accessing the underserved middle market. For life insurers, voluntary benefits have the potential of being a meaningful growth engine, and those that come out winners will be the ones that transform the employee experience. The path to success will necessitate a top-to-bottom value chain realignment. For those breakaway carriers, the rewards will be significant.
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