Cost shifting, along with significant changes in demographics, expectations and technology, are making voluntary products a hot commodity for producers, according to a new report. A level playing field also is seen for startups and established players alike to adapt and thrive with new voluntary products, services, technology and business models.

The report, “Riding the Wave of Change in Group and Employee Benefits,” was published by Majesco, a global provider of core insurance software, consulting and services for insurance business transformation.

“The boundaries between insurer, healthcare provider and benefits adviser are rapidly blurring,” observes Denise Garth, SVP of strategic marketing at Majesco.

She says there’s an ever increasing need for insurers to aggressively market and sell group products through multiple channels that include brokers and advisers. Better engagement is also needed for agent portals, which she believes “must be able to manage simulations and have the ability to build demographic-based scenarios using age, health and other appropriate factors.”

Moreover, Garth suggests customer portals or private exchanges should be sufficiently scaled up to deliver agency portal-like capabilities and extended through a variety of devices. “As customers are increasingly comfortable with technology driving their decisions,” she points out, “it is important that technology intervention in decision making be increased so that the best agents are freed up to handle the best of customers and the most complex cases.”

Attracting talent
One driving force behind voluntary benefits being used to enhance employer-paid offerings is as a tool to attract and retain top talent across all industries. Key selling points include “the ease and simplicity of shopping for additional protection while conveniently paying premiums through payroll deduction,” Garth notes. Another consideration is the expectation of portability from a group to individual-based market when employees find other employment opportunities.

The rapid emergence of new technologies is also significantly reshaping the market and its focus. For example, she says wearables and advanced medical devices emphasize well-being and longevity rather than illness and death. Digital health and well-being offer insurers a chance “to redefine the market and competitive landscape,” according to Garth.

There’s also growing recognition of the potential to offer benefit options that appeal to the unique needs of employee segments. Consider, for instance, how more millennials are saddled by large student loan debt and baby boomers are delaying retirement in the face of rising healthcare costs and low wage growth.

Garth cites Willis Towers Watson research showing that student loan repayment is expected to grow 26% by 2018, while long-term care insurance grows another 22% within the next two years. She says those findings also point to 73% growth in critical-illness insurance, 70% growth in ID theft protection and 60% growth in pet insurance.

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