Open enrollment is finishing up, and human resources departments are already in preparation mode for 2021. Traditionally, this is also a time when many organizations set out to find a new insurance broker or begin exploring options.
In fact, 53% of firms offering health benefits reported shopping for a new insurance carrier or health plan, according to the Kaiser Family Foundation's 2019 survey, similar to the previous year's percentage. Some 18% reported changing carriers in the previous year, and it stands to reason that the disruptive events of 2020 will drive that figure higher.
Why? Because COVID-19 has upended the way businesses operate and altered daily life for almost everyone. Employers are exploring how their coverage needs have been affected by the wholesale behavioral shifts occurring around them and by adjustments made to their own business models since the start of the pandemic. How should plan features adjust to serve a work-from-home employee base? How can benefits best answer demand for mental health services that have mushroomed under social distancing and the strains of confinement in isolated or overcrowded households?
The employer's own coverage demands extra attention, as well. How should its coverage change to reflect a smaller office footprint or risks and liability associated with virus outbreaks at the workplace? Do its policies address the elevated threats of cybercrime and damage to company equipment occurring in the homes of a newly remote workforce?
As HR teams confront a host of critical decisions, they want their insurance broker to serve as both an advocate and guide, helping to illuminate the shadowy corners in their risk profile and then walking them through scenarios and coverage options. The need to find the right broker, to align advisers and the organization in the pursuit of human resources objectives, is now mission-critical.
Perhaps more than at any other time in living memory, companies are motivated to comparison shop their markets in the hope of finding the best match to their needs.
Searches in an Opaque Industry
Most communities host a variety of insurance offices from which to choose, operated by providers, independent brokerages or both, and often with multiple locations.
The employer's challenge in finding the right broker is to make an informed selection from an abundance of options. As many HR managers can attest, however, there are surprisingly few reference points to help distinguish a brokerage's quality and advantages, or to make comparisons among the insurance businesses in a market.
Standard internet search engines are a common starting point but often yield disappointing results. The initial list built through a web search will offer scant context, requiring earnest seekers to research each name for specializations and credentials or even to determine which brokerages are still in business. Traditionally, the search for a good insurance brokerage has been a form of research project, often requiring hours of online investigation, perhaps soliciting referrals from brokers and gathering recommendations from colleagues.
See also: Technology and the Agent of the Future
On the other side of the match-making equation, brokerages are typically motivated and eager for the opportunity to inform potential contacts about their successes, affiliations, special training, longstanding client relationships and other distinguishing characteristics. They may regularly purchase local advertising to that effect, in addition to the networking, community involvement and word-of-mouth promotions that insurance professionals have relied on for decades.
Yet these traditional approaches lack consistency and efficiency. Just as there are surprisingly few resources to help an employer search for the right brokerage, there are few forums where an insurance team can clearly showcase its expertise and capabilities for fair comparisons with competing firms.
AI-Powered Alternatives
Technology is poised to transform the brokerage marketplace, however. For instance, our firm, Mployer Advisor, recently launched a platform that promises to bring a new degree of transparency to the insurance brokerage space. Built to help employers search, evaluate and select business insurance brokers and employee benefits consultants, the system draws real-time data across multiple private and public sectors. Powered by algorithms and artificial intelligence, the platform enables users to conduct rapid searches of brokerage data and drill down into results by their size, industry, geographies and product offerings to narrow results.
The Mployer Advisor platform also introduces a brokerage rating system, M Score, which leverages public and private datasets to understand and quantify a brokerage's experience. Scores range 1-5; the higher the M Score, the broader the broker’s experience. While a brokerage cannot directly change its M Score, it can claim its profile and fill in any gaps in its listed expertise, which might trigger a recalculation. The platform also showcases reviews of each brokerage.
See also: 2021’s Key Technology Trends
Millions of Americans rely on employer-sponsored health coverage and benefits obtained through an industry that historically has lacked clarity. For too long, those companies have been forced to navigate the broker selection process with limited resources. Technology, powered by today's advanced algorithms and artificial intelligence, now provides the means for change. It is time to address this deficiency and give employers the transparency and tools they need to find the insurance broker best suited to their industry, company size and product needs.
