Why Benefits Brokers Have to Lead the Digital Transformation
The insurance industry’s use of technology has expanded in recent years. Being that most employee benefits are considered part of the insurance industry, we see the same sort of technology expansion among general agencies, benefits brokers, and agents. Strangely, the least amount of technological transformation is found at the carrier level. This is what makes the broker’s role so important.
BenefitMall is a brokerage general agency based in Dallas, TX. They have made a decision to heavily promote the digital transformation concept among their brokers throughout all of 2022. There is good reason behind that. BenefitMall is convinced that brokers need to lead the digital transformation in the benefits industry. Brokers are the ones at the forefront. They are the ones capable of connecting carrier with employer.
Too Many Gaps
A detailed look at technology in the insurance business shows too many gaps. The gaps are especially noticeable in the employee benefits space for one simple reason: carriers rarely interact directly with subscribers to sell benefits, adjust insurance plans, settle claims, etc. Almost all interactions between carriers and subscribers are filtered through employers first, then benefits agents and brokers.
The car insurance sector has demonstrated what happens when carriers deal directly with consumers. Some of the biggest carriers on the market now allow customers to buy directly from them. They do not have to go through brokers or agents. Moreover, these carriers make it possible for their customers to do everything online.
A similar model is unlikely to be established in the benefits business. Why? Because benefits like health insurance plans are offered through a group model. Employers sign up for group benefits based on geographic location, demographics, and other factors. This group model all but forces carriers to offer products through brokers and agents. The direct-to-consumer model only works on the individual market.
The Face of the Carrier
For all intents and purposes. The way the benefits industry is set up makes brokers and agents the face of the carriers they represent. When an employer needs a benefits package, the one to turn to is the broker. The same goes when employers want to modify their existing plans. Everything ultimately goes through the broker or one of its agents.
This puts brokers in the ideal position to lead the digital transformation. They are in the best position to extend digitization to include an entirely digital workspace. Through a cloud-based benefits portal, a broker can:
- research and market products
- compare products for clients
- prepare and submit quotes
- sign employers up for group plans
- facilitate open enrollment for employees
- communicate with their clients
- develop leads and follow up on them.
As BenefitMall has explained numerous times, there is a difference between mere digitization and the digital transformation. The former involves little more than converting paper documents to their electronic equivalents. The latter is about taking the entire benefits workflow and putting it into a digital environment – almost always the cloud.
A Golden Opportunity for Brokers
If the benefits industry is ever going to fully embrace digital transformation, it will be because brokers take the lead. The benefits to those brokers willing to step up should be obvious. Embracing the digital transformation is a golden opportunity for those brokers to get out in front, lead the way, and grow their businesses as a result.
Brokers taking the lead will benefit carriers, employers, and individual subscribers alike. Conducting business in a digital environment is more efficient. It is more accurate. It gets more people more involved by making the entire equation more collaborative than it has ever been. Therein lies the key.