Employee turnover. It sounds like a harmless phrase. But for group insurers, it has big implications for the profitability of their group insurance business. Let's understand why group insurers that nail handling employee changes are usually more profitable than those who don't.
How big a deal is employee change?
OECD studies place employee turnover rates at between 15 and 30 percent. While these rates fluctuate country to country and year to year, it still represents a lot of people changing jobs every year.
Let's look at that from the perspective of a group insurer. In a group of 1000 employees, if turnover is 20 percent, you'll be facing at least 200 plan changes over the course of a year. If your group plans cover families, then double that figure at least - you'll need to amend information for spouses and dependents of the employees too.
That means for that 1000 employee plan, at least 400 changes to plan coverage selections, policy documentation, online portal access management, attestation documents, billing arrangements for voluntary schemes, and more.
In group insurance lingo, this is called 'managing the ons and offs'. If your group administration processes are cumbersome and time-consuming, it is easy to see how dealing with the everyday chore of keeping employee changes up to date can be make-or-break for profitability.
If you need a big administrative and IT support team just to keep up with employee changes it is expensive. But it also limits your ability to scale (you can't add new business without adding admin people) and it limits your ability to innovate (because changing an existing cumbersome and manual process is very difficult).
At Sentro, we have always said that the most challenging thing about group insurance is also the most basic. Namely, how do you handle employee changes? How do you know that someone is working for the company today?
We have built Sentro to be employee-centred. By starting with the employee, and working back through their employer, their adviser, and the insurer on an integrated cloud platform, insurers and benefit providers can work together to be more efficient and provide better customer service in the process. Let's look at some of the ways we deliver on that promise.
Cloud-native integrated platform reduces your IT costs
Sentro was built ground-up for the cloud. That means there is no software to install for the insurer, their broker partners, or their group insurance customers.
This means immediate IT staff, infrastructure and security cost savings for Sentro customers. There is no software to maintain, and no local servers with operating systems falling out of maintenance.
We've seen so many situations where a group PAS that is home-grown or was inherited with an acquisition was built in a software language that is no longer supported. It is impossible to maintain because you can't find developers with the knowledge of that unsupported development language any more. With Sentro, that IT operations and software maintenance burden disappears.
Multiple actions from a single change
Sentro provides user experiences for the insurance administrator, the broker, the employer, and an integrated employee portal for the employee. On our integrated platform, this means that there is no double information handling. When a new employee is added to a plan, their policy documentation is generated automatically, and their employee portal credentials are issued automatically as well.
If a single change (adding an employee record) can automatically trigger a range of related transactions, you deliver efficiency and a better customer experience.
Sentro customer Pinnacle Life does exactly this. They built an innovative small group SME life product, bundled with an employee benefits online portal. All policy documentation is delivered online via the portal, and the process of handing employee changes takes seconds, not hours. Read our Case Study for more information.
Handling high-volume changes
For large groups, insurers usually receive employee changes in monthly, quarterly or annual file listings of employee changes from the employer.
The insurer usually takes whatever the employer's HR system can provide in terms of data. It is rarely consistent employer to employer. The insurer then needs to take that information and process the changes on their policy admin systems and processes.
When groups are large, there could be dozen or hundreds of changes with each file.
Sentro gives you powerful bulk updating tools to deal with high volume changes.
Our Bulk Member tool maps a customer input file to the proper member data attributes. It can update existing plan member records, and create new plan member records.
When it is time to handle a group of departing plan members, our Bulk Deactivate tool makes it simple. Just provide a list of departing members, and their plan deactivation dates. If the members have online portal access, that can also be deactivated in the same step.
Automated plan member onboarding
When new plan members are added, they are automatically added to existing group plans. Plan Product Rules ensure that new members are assigned to the right products. Automatic Acceptance Limit rules are enforced and new members requiring underwriting assessment are automatically flagged.
The member policy documents and membership certificates are automatically generated.
If access to the Employee Portal is enabled, the member receives an activation email, and can immediately sight their benefits information and documentation. They can also update their personal information.
Nailing employee changes adds up to higher profits
When you analyze the time and effort spent executing routine group insurance administration tasks, it really adds up. Nailing employee changes is key to success, and you'll do that with Sentro.
If you'd like a free analysis of your current operation, please book an appointment with us. We love helping group insurers quantify improving their group insurance profitability with Sentro.
