General Insurance Article - Digital trends that drive the future of employee benefits

The power and potential of digital technologies is truly compelling. Employee benefits management platforms, data analytics dashboards and healthcare and insurance technology can deliver tangible cost savings and improve engagement. This is the key message from a new report from MAXIS Global Benefits Network.

 MAXIS GBN, the international employee benefits joint venture between MetLife and AXA, believes there are four major digital and data developments driving the future of the global employee benefits industry:

 • the adoption of global benefits platforms to centralise employee benefits enrolment and management
 • data analytics generating increasingly sophisticated actionable insights
 • health and wellness technology helping employers create targeted wellness programmes
 • insurtech innovations such as artificial intelligence, distributed ledger technologies and robotic process automation which are changing the sector and catering for the needs of new generations.

 As the report reveals, the outcomes of good data and technology usage can be dramatic. A MAXIS GBN client, faced with a very high loss ratio (130%) in one jurisdiction, was able to bring this down to breakeven after analysing health claims data to identify cost drivers and use these insights to make wellness recommendations. This was despite the wider medical cost trend increasing from 9% to 15% over the same period.

 Helga Viegas, Director, Digital Marketing & Innovation at MAXIS GBN, said: “We are seeing a significant acceleration of ‘digital transformation’ type activity in the global employee benefits space, which is by definition slower to innovate than more advanced local markets. We launched the MAXIS Data & Digital Innovation Lab in March this year to capitalise on these trends and have begun developing new digital products and services, as well as working with global platforms, insurtech companies and entrepreneurs to offer innovative solutions for our clients.”

 One of the major catalysts of change in the EB sector is cloud-based benefits platforms. These allow multinationals to centralise administration as well as control costs, reduce overheads and improve risk mitigation. However, research suggests adoption by employers at the global level is still lagging behind local-only usage, with only about 10% of employers saying they use a benefits platform in every country. MAXIS GBN is confident this figure will increase significantly, given the need for more centralised control over benefits spend, the trend for flexible benefits and tightening regulations around data governance.

 Similarly, expectations around distributed ledger technologies (DLTs) such as blockchain have accelerated over the past 12 months and it’s likely that DLTs will be increasingly used across key aspects of the insurance world including employee benefits to deliver smarter, instant contracts, better transparency and claims management, as well as greater flexibility for all parties. Its impact on reinsurance processes can be significant and deliver substantial savings.

 Helga Viegas added: “DLTs are one of the most exciting parts of a fast-digitising employee benefits industry even though it’s a change in the underlying IT infrastructure that will be fairly invisible to the end user. While a number of challenges remain for those looking to implement a blockchain solution, such as how to effectively exchange information between different systems, the business case is very strong. We have begun looking at how DLTs can be used and there is a clear sense that the concept could transform the insurance market within a few years.”

 The report from MAXIS GBN explores one of the key themes of its Global Perspectives research, published in May 2018. The research found that 75% of EB professionals considered the use of data and new technologies the biggest growth opportunity for the global employee benefits sector. Four-fifths (81%) said the use of data and new technologies is the trend most likely to shape product and service offerings. Almost half (49%) said they were investing in data and digital tools to make the process of providing benefits simpler and more efficient.

 1 A copy of MAXIS GBN Global Perspectives – Data & Digital Innovation and The Future Of Global Employee Benefits can be downloaded here
 2 Thomsons Benefits Watch 2017-2018
 3 A copy of the first MAXIS GBN Global Perspectives research paper can be downloaded here 

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