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Perspective

Digitization and Automation - Why Are Medicare Supplement Insurers Late to the Party?

April 05, 2015| By John Najarian | Medicare Supplement | English

Region: U.S.

Effective insurance management is essentially about striking the right balance. Grow new sales, but do so profitably. Pay attractive commissions to sell more of your products, but also price those products competitively. Hire and train professional staff to administer your products, but keep overhead expense levels in line with pricing assumptions.

I could go on  endlessly about the many trade-offs and dynamic tensions among important variables in our businesses. However, my point is just the opposite. On the scene now is a concept we do not find often - one that seems to deliver positive outcomes across the board.

The concept is digitizing underwriting applications - along with a subset, automated underwriting. 

First, exactly what are we talking about? In short - very short - it’s about a few things:

 

This concept has actually been with us for quite some time. Many of you probably already know that. However, adoption rates of this concept, including the accompanying business workflow and/or systems overhauls, have varied across the different lines of business within the broad insurance industry. Property & Casualty  is out ahead of Life & Health. Within Life & Health, Individual Life is out ahead of just about all other products.

My world is Life & Health and in particular, the Medicare Supplement (Med Supp) business. Surprisingly, the Med Supp industry is not an early adopter. Why is that?

Experts say certain types of insurance products are better fits than others for digitization and rules-based automation. Elements to look for include:

 

For Med Supp we can check all of these boxes. Think of all the functional areas that could benefit from a more efficient and more consistent business acquisition process. So, the answer to the question, “Why is Med Supp late to the party?” remains somewhat of a mystery. I have my theory, but I am more interested in learning about yours. Please contact me if you care to share. 

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