Dealing with rapid advancements in technology and its industry disruption
New benefit technologies are springing up on a regular basis and presenting advisers and brokers with an incredible amount of choice – and, in some cases – competition from high-tech ventures moving into the market.
Michael Lujan is the co-founder and chief strategy officer at Limelight Health, a Silicon Valley-based start-up that offers a quoting technology platform, called QuotePad, for health insurance agents, carriers and private exchanges. He is president of the California Association of Health Underwriters. He also helped launch the California Health Benefit Exchange, now known as Covered California, and is a former agent, general agent and director of sales for Blue Shield of California.
Lujan gave a presentation titled “Broker Technology: The Changing Employee Benefits Landscape,” at last week’s Workplace Benefits Renaissance (WBR) event in Atlantic City, N.J., after which he sat down to talk with editorial director John McCormick. What follows is an edited version of their conversation.
What do you see as the key technology trends for benefit advisers/benefit brokers these days?
I think the market’s pretty clearly moving in the direction of integrated HR, benefits, compliance and payroll. While every small business has a common need, they don’t have a fully dedicated benefits and HR department. I think the market is clearly responding to that need.
We’re seeing a lot of technology disruption. How long will this period of disruption last?
I would love to give you a very profound insightful answer to that, but who knows? I think we should probably prepare for this to be the new normal. We’re going to be in a constant state of evolution and we should probably embrace that. At least for right now I’d say we shouldn’t be looking at this as anything less than a five-year ride.
Are advisers and brokers ready for technology disruption?
I think, for the most part, yes. But the challenge is navigating through the lists and lists of new vendors. It seems like every week there’s 10 new companies they’ve never heard of. But brokers, for the most part, have adopted to the new wave of technology. They’re just now wading through the different vendors and figuring out which ones are good and which ones they should partner with.
What’s the best way for an adviser to narrow the field?
Have a lot of meetings. Meet face to face with the vendors if you can. There’s also some good webinars and good online sites they can access. And an event like WBR is a great opportunity to meet with vendors and interview them.
"Advisers and brokers should Interview vendors like they would a potential employee because, in many cases, the vendors they choose are effectively going to be joining their team."
Advisers and brokers should Interview vendors like they would a potential employee because, in many cases, the vendors they choose are effectively going to be joining their team. And advisers and brokers should be sure to talk to several vendors. Don’t just start with a short list.
And they should talk to their peers. They should find out who others think are good. But they also need to understand their segment. Brokers may hear that company X is really good, but that information might come from a broker who works upstream in the larger group market. And if a broker is a small group, downstream-market broker, that vendor might not be a good fit. So brokers need to talk to brokers like themselves.
It’s one thing to buy technology; it’s another thing to implement it. For a lot of advisers and brokers, big and small, putting in systems is not an easy task. How can they overcome the deployment challenges they’re likely to face?
I recommend brokers prepare an RFP and ask questions: What does an implementation look like? Is it totally self-serve? Does the vendor have field reps and what does a typical implementation take per client? And what kind of resources are available — is it all going to be call-center support or is there field support?
I also think it’s good to try a technology before you buy it, which helps because then you’ll get a good sense of how it’s going to be implemented. Obviously, the better technologies will require a lot less implementation and training. They’re intuitive enough to where you can almost plug and play.