It seems for all insurance agents, especially brokers on the benefits side of the business, technology is beginning to change the way our companies operate. New phone apps, which allow for purchasing and the filing of claims, have been around for quite some time in the property and casualty business for personal lines like auto and homeowner’s insurance. However, we have not seen similar growth in technology for ancillary products in the benefits business.
Traditionally, benefit products have been partially underwritten and based on medical data such as height, weight, and blood pressure. These products are now being refiled by their various carriers as guaranteed issue with minimal or no underwriting.
These new ancillary products are becoming what I call “commodity products." Commodity products are very compatible with the new technology we are beginning to see from several carriers. Numerous products can fit this new mold: cancer, critical illness, limited medical, hospital indemnity, accident, dental, and vision.
Major medical insurance has been guaranteed issue in group and individual plans with coverage for pre-existing conditions. These guarantee issue requirements for individual medical came from the Affordable Care Act (ACA). Group medical products had these requirements for several years before the ACA. I really don’t see any of these underwriting requirements changing in the future. Consumers like several modifications that were made to the ACA. Specifically, coverage for annual physicals, coverage for pre-existing conditions, and keeping children on the parent’s policy until age 26.
This information leads me to the conclusion that brokers will have major decisions to make for the future. Brokers must become connected with an organization that can create or acquire these new technology platforms for group and individual business or they will have change their business model to become more service oriented (such as starting a TPA or selling payroll services). Many independent P&C and benefits agencies are opting to sell their businesses to the largest P&C and benefits agencies. I think the reason could be related to the fact that they were faced with the prospect of investing large amounts in new technology or taking another path to protect what they have built.
The main point of today’s blog is that most of the decisions being made by owners of independent agencies or brokerages are related to new technology. Do I want to make the investment, or can I access this new technology from some other source? Either way, I need it to make my business successful for the future.