Lynne Wallace
It feels like the attack is personal. Insurance disruption targeted at eliminating the “middle man”. Maybe so but perhaps not…disruption moves to eliminate anything that doesn’t provide enough value in today’s marketplace. We feel the rumblings of disruption in all areas of insurance but none more significantly than health insurance.
William is a successful employee benefits broker. He is a pro at shopping a client’s benefit program, helping with open enrollment, and advocating on claims issues. So why is he closing up shop? Seemingly overnight, William’s expertise now satisfies fewer and fewer consumers. The employee benefits business as he knows it has been disrupted.
Health insurance was disrupted with a one, two punch. First, governmentally, by the Affordable Care Act which changed the way health insurance is purchased. And, then Zenefits launched its platform offering technology to help organize and expedite HR onboarding, benefits administration and ACA compliance, all free with the purchase of insurance.
Setting aside the super-sized deductibles and sketchy stairwells, together these two fundamentally meet more consumer needs than the traditional model. It’s Blockbuster all over again. People still want to watch movies, the only issue is how they get them. People want health insurance…it’s just a matter of how they access it.
Having tasted the dream, consumers now want it all. They want creative insurance solutions and funding alternatives. They want HR support. They want cool technology to handle the administration and compliance. They want a system that is scalable and saves a lot of time. They want an app that empowers employees and motivates them to embrace healthier lifestyles. And they want powerful insurance advocacy readily available when they need help.
For consumers, a solid platform model is simpler, faster, provides more solutions, and consolidates resources making the new generation agency/brokerage a non-optional partner.
Reality is that it takes considerable financial investment to morph the traditional insurance agency to meet new generation demand. Most insurance teams do not have the time or expertise to service a tech platform. So they need a tech team. And they need certified HR professionals on staff. Outsourced HR is an option but is sometimes inconsistent and fails to create client stickiness with the agency brand.
For William, it’s not the end. It’s a new start. He has options…sell his book to a firm with a full benefits platform, subscribe to a platform that would give him tech and HR support, or retain his book ownership and outsource service to a fully loaded platform.
Insurance disruption is not so much about eliminating the middle-man as it is about replacing the old “purchase and placement of insurance” agency model. As disruption goes beyond health insurance and further into other lines, yes, it will eliminate agents but it will also create tremendous opportunity for many others.
Since March is Insurance Industry Awareness month, we are asking all insurance enthusiasts to weigh in here…please let us know your
thoughts here. Anything you’d like us to share?
Lynne Wallace is the CEO and president of VANTREO Insurance Brokerage and co-founder of NDOI, the National Directory of Insurance.
