Tag Archives: Benefits Enrollment Systems

Today it was announced that Sun Life acquired Maxwell Health. The first thing I asked was why? I don’t see the benefit to an employer or their employees. I see no benefit to the broker distributors. In fact, I hardly see a benefit to Sun Life. I can see the benefits to Maxwell if they either needed cash or their investors wanted out. I don’t really need to speculate around that here, but I am sure someone will tell me I am wrong. Someone please tell me why this is a good or even “relevant to the market” transaction. I will print it if the reason is sound.

If I am an employer, why would I want a technology solution coming from a single vendor? Technology to manage benefits, HR, and payroll should be owned by the employer, with no attachments. It should be something you invest in to make better every day. It should be engaging and provide employees with all the relevant company information that they need. In a survey I had done, the number one thing employees wanted to see via web or mobile in an employer sponsored HR system was how many vacation days they have left. Most employee benefits technology systems don’t track time off and those that do are bad at it.

As a broker, one would think you would want to represent the employer’s interests. You would want to have more options than representing a single vendor. And why would I need a carrier to bring me a technology solution as I could easily pick up the phone and find ten systems in one hour? Providing choice in health insurance, disability, and other benefits is an asset and the core to being an insurance broker versus an agent for a single company.
Other carriers are already out there providing a broad range of technology solutions. Many are providing discounts. This move by Sun Life could create a competitive advantage, to everyone other than Sun. In my business I could bring a dozen benefits enrollment systems, HR, and payroll to any employer, all with carrier subsidies available from many carriers. I have choice for technology. Choice of carriers. And subsidies for the employer if needed. It is easy to do, and I would add not a real differentiator.

Now if Maxwell develops something real special then maybe there could be something there. However, as I have learned from being in the technology business for years, technology is easily replicated. As the saying goes, “You can’t win or stop a technology war”. So, Sun Life better have a real lot of money to continue to fight the battles of this very active HR/Benefits/Payroll technology war that is going on. I would expect investments of over $100 million per year in their technology would be required simply to compete.

So, my assessment of this transaction is, So What? It is just more noise in a very noisy market that in my opinion doesn’t change the world a bit. (Other than for some employees or investors in Maxwell.)

This article was first published in 2009. It is even more relevant today so I am reposting this along with a follow-up article on the same topic.

A few weeks ago my son asked me if he could use my laptop for his regular Tuesday night drum lesson. I could not imagine why he needed my laptop for a drum lesson. It turned out that his drum teacher was on the road and he was going to be giving his lesson via the internet using Google video chat. So, he took my laptop into our basement and set it on a chair in front of the drum set. Using the built in camera, speaker, and microphone, along with a wireless high-speed internet connection, my son played the drums while his teacher watched, listened, and instructed, from his hotel room 700 miles away.

A few days later I was talking to an insurance company sales representative about the use of web-based benefits enrollment technologies. He commented that one of the drawbacks of web-based, self-service enrollment systems was that participation in voluntary plans was significantly lower when compared to face-to-face enrollment meetings with a professional enroller.

It occurred to me that there were some interesting similarities between the two situations—and some profound differences. While my son’s drum teacher leveraged technology to create a “face-to-face” drum lesson and generate revenue, the sales rep considered the technology an obstacle which reduced revenue. It has been my experience that those in the benefits business, though not afraid to invest in technology, often struggle with applying the right technology to the right situation. Let’s address how brokers can leverage technology to improve customer service and generate more business.

For benefits brokers, leveraging technology is moving away from a “ nice-to-have” strategy and more towards a “have -to-have’. With insurance products becoming more commoditized, and some form of healthcare reform on the horizon, benefits advisors will have to adapt to a changing market. This new market is likely to result in both flat or reduced commissionable revenue and a shift towards fee for service revenue. If that is the case, brokers will need to become more efficient, managing more customers with the same or fewer employees, while improving and expanding customer service. One way to do this and remain competitive is by investing in technology.

So how does XBOX get into this discussion? Well, be patient, I will get there.

There are dozens of processes in a benefits brokerage operation that can become more efficient with technology, I will focus on just a few. Let’s start with a common process for most brokerage firms, the customer service call. When it comes to customer service most brokers are very responsive. In fact, when one asks brokers how they are different, the average broker’s response is that they provide superior service. This presents two problems to the brokerage firm that is truly trying to differentiate itself. First, I have yet to meet a broker that didn’t say they provide superior service. Second, most brokers are not able to quantify the service they provide. The typical service call is documented with paper notes or simply by typing notes into some database type system. Most cannot produce a report on the types of calls, response times by their staff, or which insurance companies are having the most versus least number of issues.

Not having reportable information may not be a problem with clients where a strong relationship exists. But, what happens when your contact leaves the firm and a new HR person takes over? It is at that time a brokers value may come into question. It is also a time at which the broker has a tremendous opportunity to demonstrate their true value.

For a new HR person the information you have can be leveraged to make that persons transition into a new job easier. However, according to John McKean in his book, “Information Masters: Secrets of the Customer Race”, only 5% of the body of knowledge about a client is available digitally and indeed only 20% of the knowledge is recorded at all.” For many brokers this is often the case. Therefore, though they may have provided great service, they can’t prove it to a new HR person. Thus they lose a competitive advantage over a broker who may be prospecting the same employer.

Another risk point for brokers is when a key employee leaves the firm. In organizations where information is not tracked all knowledge walks out the door with that person when they leave. This not only puts you at risk of losing your asset, but may result in a lapse of service to a customer. Information existing only in the minds of your staff is not a reliable service model.

A major problem for many firms is they don’t have an adequate system for simplifying the tracking of information. I once asked a service rep at a brokers office what her number one technology need was. Her response was very telling. She said her primary method of communication with clients on service issues was e-mail. She said it took her 11 mouse clicks to save an e-mail to her system, and she saved 60 e-mails a day. That’s 660 clicks! She spent an average of 45 minutes a day saving e-mails. While this person saved all her e-mails, another service person at the same firm said she didn’t save her e-mail correspondence because it took too long. The owner of this large regional firm thought they were all set with technology. The problem for his staff was the technology was the wrong technology. In a business environment with ever increasing demands for both greater productivity and quality, this may not be tolerable.

So, how does one make it easier to manage data and improve service? This brings us back to my son and his XBOX. , On most nights, XBOX is the primary tool my son uses to communicate with his friends. For those of you who aren’t familiar with XBOX, it is an internet based video game console that runs through a TV. It allows friends, each in their own home, to gather in chat rooms (up to 8 fiends at a time) and talk via a headset. If they want to play a video game they can play the same game. Two friends can also connect via video and see each other on each other’s TV screen.

Now move this technology into the business world. Imagine a broker’s client being on their “buddy” list. All clients should be on the buddy list. If a client needs to reach you they wouldn’t call and leave a message or send an e-mail. They could see if you are “present” simply by looking at your name in their Outlook. A green light by your name would signal you are available. Better yet, they could see the names of your service team and click on the name of any available person. Once clicked, a message would appear on the available service person’s screen asking to talk. If accepted, the service person would be instantly talking to your customer via the internet. This instant access eliminates any phone tag, saving substantial time. You could bring another person such as an insurance company claims office rep into the conversation if you would like. Viewing your client’s computer screen or even seeing the caller would be possible as well, further personalizing the experience. You could record the conversation and save it to a client file in your computer. Once the service issue is resolved, an e-mail could automatically be generated and sent by the system to the client thanking them for their business with no manual intervention.

Although this technology exists today, I have yet to run into a broker that provides this type of service. The combination of Microsoft Products called Office Communicator and Microsoft Office live is what I call XBOX for business. Other software firms have similar technologies.

Now let’s go back to the issue of voluntary benefits enrollment. You can be a broker in New York helping an employee in Texas through the open enrollment process. The employee can sit at a kiosk computer at work, put on a headset and click on the green dot on the screen to talk to and see a sales person in your office. If you want to show them where to click to enroll you can share their screen and even click for them. You can jointly go through their insurance needs calculator on the screen too. From 1200 miles away you can do a personal face-to-face voluntary enrollment, answer questions for the employee, and have the data transmitted into the insurance companies system automatically. This use of XBOX like technology will improve voluntary enrollment results while significantly reducing the costs associated with in person face-to-face enrollments.

It didn’t take long for a group of teenagers to leverage technology to conduct nightly conference calls without picking up a phone and paying an extra fee. In just a few years Microsoft has changed their behavior and created a new method of communication. It is not hard to imagine that businesses will adopt these same technologies in the next year or two. And for those that do, there are a whole bunch of college kids using these technologies in their dorms right now that will come well prepared to communicate in the new business world. What’s more, these same kids are also the insurance buyers of tomorrow.