Insurance carriers have long been the primary stewards of enrollment and eligibility data within their systems of record. As a result, the benefits universe has largely revolved around their technology at the center.

But all that is changing as consumers demand more dynamic, personalized experiences from their benefits providers. A new software ecosystem is developing around these expectations. It’s why a LIMRA and EY study found that two thirds of employers now prefer carriers that can connect with their benefits software over those offering the best value product. “Cost is no longer king; a holistic experience, ease, and quality will win the day,” conclude the researchers.

This shift in perspective has many carriers thinking about how to enable a broader array of digital services that serve consumers better. This could result in lower internal administrative expenses, faster growth across digital and field/broker channels, and of course, higher retention.

For many, the business case is clear, but the way forward is less so. Having been focused on broad, multi-channel distribution of benefits products for my entire career, I’ve grappled with this same trillion-dollar question: How do you adapt systems built for a carrier-centric world to one where distribution opportunities revolve around consumers (and their data)?

I see four clear paths insurance carriers can take to facilitate a digital enrollment and benefit administration experience that meets consumers where they are today, each with their own set of advantages and tradeoffs.

1. Build and compel

Many carriers have begun to build their own enrollment and administrative systems and compel agents and employers to apply for coverage and administer their policies in the new system on an ongoing basis. 

This “build and compel” model can be very costly for the carrier to develop and maintain. It also represents a single carrier’s solution to the marketplace. This means that agents or employers will have to use multiple carrier systems, all different, to administer multiple lines of coverage offered by different carriers in the marketplace.

Pros:

• End-to-end control

• Proprietary system

Cons:

• High cost to develop and maintain

• Expects customers to use multiple, custom systems to accomplish the same task with each carrier

2. Brand and deploy

Some carriers have purchased or leased multi-carrier platforms, branded them as their own, and deployed them for use by agents and employers. There is a significant cost to acquire such a platform and configure internal systems to connect.

While the branded platform may accommodate multiple carriers and facilitate more connected services, it is still a single carrier’s offering and will not meet the needs of a diverse and ever changing marketplace.

Pros:

• Can serve a one-to-many need for subset of employers

• May facilitate more connected services

Cons:

• Significant costs to acquire and reconfigure systems

• A single platform will struggle to meet the needs of a diverse and ever-changing marketplace

3. Plug and play

Given the limitations of the previous options, carriers are recognizing the importance of flexibility and extendability so data can flow easily between many different systems, especially as new consumer-driven benefits software emerges. This requires API endpoints that allow properly configured and secure access to facilitate enrollment and administration for any digital platform.

Building and maintaining these systems requires an immense upfront investment and a lot of technical expertise. For that reason, carriers must figure out how to get by with legacy systems while architecting new infrastructure.

Pros:

• The best way to eventually enable real-time data exchange

• Can facilitate connections between a broad ecosystem of software partners

Cons:

• Slow and expensive to develop; requires technology expertise

• New API infrastructure must work in conjunction with legacy systems during the transition

4. Partner and steer

As carriers work toward Plug and Play, some have chosen to partner and steer. They have partnered with select benefits platforms to go deep in their integrations, often bridging multiple methods to facilitate data flow.

The partnership has shared resources working together to provide a connected experience. The challenge here is always who are the right partners and what integration approach makes the most sense for the partnership.

Pros:

• Enables a deeper level of connectivity with key partners

• Can help transform systems without broad technical investment

Cons:

• Deep integration means there are a lot of risks in choosing the wrong partner(s)

• Limits connectivity to subset of the market; can slow progress toward plug-and-play connectivity

No matter which path carriers take, API technology will facilitate connections to multiple software platforms each providing different insurance benefits, e.g. payroll companies, compliance services, and a wider array of Human Capital Management (HCM) or Human Resource Information Systems (HRIS).

Embrace customer-centricity with an API-powered approach

Ultimately, the value of the insurance carrier or service provider in this ecosystem will be realized in the ability to connect, flow data securely, and in real-time. Noyo has built scalable, one-to-many API infrastructure to help carriers quickly achieve seamless connectivity, whether the goal is a true plug-and-play strategy, deeper connections with partners, or a more vertical approach.

Just as Belgian astronomer Georges Lemaître envisioned the expansion of the universe, new technology is having the same effect in employee benefits. Putting the consumer at the center and investing in broad connectivity expands the universe of possibilities for carriers. To learn how Noyo can help with your journey, explore our solutions for carriers.