The future of the group benefits industry could be reshaped by collaboration and innovation. That conclusion quickly emerged during the Vision 2035 workshop held last February on the sidelines of the the Congrès Collectif (Group Insurance Conference), organized by the Insurance Journal Publishing Group.
About 30 experts, insurers, advisors and ecosystem stakeholders compared perspectives in a three-hour collaborative brainstorming session on the future of group benefits.
The co-design exercise, led by Laurent Simon, Professor and Director, Department of Entrepreneurship and Innovation, at HEC Montréal, generated several promising avenues for reflection.
The goal was to break out of organizational silos and reflect on the industry’s challenges, threats and opportunities at a time when the world appears “uncertain, volatile and complex,” Simon told participants at the Congrès Collectif, gathered at the Palais des congrès de Montréal the day after the session. “We can no longer afford to forgo shared reflection or a connected foresight exercise,” he said during the conference titled Vision 2035: How 30 leaders see the future.
A change in mission
One major observation stood out from the outset: group insurance has already begun a structural shift. Historically focused on risk coverage and treatment, it is moving toward a greater emphasis on prevention and early intervention while encompassing more dimensions of health.
“Health is not simply the absence of illness,” says Simon. “The industry has moved toward a logic of supporting and developing employees.”
Against that backdrop, group benefits plans will need to become more flexible, more holistic and better aligned with employees’ needs and rising expectations, says Nathalie Laporte, Vice President, Group Reinsurance, at RGA.
“At the end of the day, business performance depends on people. Employee well-being is no longer a nice to have; it is a true performance driver,” Laporte says, adding that studies clearly show the link between workforce well-being and employee engagement.
Combining strengths
Despite the competition that exists across the industry, companies will succeed by pooling some of their strengths and resources, says Benoit Bilodeau, Vice-President, Brokerage and Consulting, Quebec, at Beneva.
The trap the industry must avoid, he says, is allowing insurance to become nothing more than a commodity negotiated on price alone, without any added human value.
“The industry has to take charge and collaborate more,” says Bilodeau. “It needs to find ways to differentiate itself and create value for clients.”
Taking a cue from banking
The insurance industry would benefit from drawing inspiration from the banking sector, Bilodeau says, pointing to the way financial institutions embraced “co-opetition,” blending cooperation and competition.
“Today, we have a rare opportunity: to compete on client experience and innovate to create value for the client,” he says.
Competing firms, he notes, succeeded in pooling their card networks, ATM networks and infrastructure. As a result, operating costs fell, errors were reduced and standards were harmonized, giving them more room to focus on clients.
To follow that lead, insurers should adopt shared adjudication and administration systems, which would reduce the installation and maintenance costs each player currently absorbs. That path would also improve cybersecurity and data protection, he says.
“We are not building on our collective learning,” Bilodeau says. “Each player invests in isolation, and no one shares in the benefits of implementing a system.”
The Beneva executive is also calling for stronger insurance literacy so that the terminology used in the industry becomes as well understood as the vocabulary used in finance.
Advisors’ key role
In such a changing ecosystem, advisors would play a crucial role because they are the link between insurers, employers and employees, according to Laporte.
Rather than focusing mainly on negotiating plan costs, that role would evolve toward a stronger advisory function. Advisors would need to demonstrate the added value of benefits plans and guide employers toward more informed decisions.
“You are at the heart of the ecosystem,” Laporte told advisors. “You understand employees’ expectations and you have a unique perspective that puts you in an ideal position to advance group benefits and support employee well-being.”
