The Insurance Industry: What is Next?
We recently sat down with Michael Lujan, President of The California Association of Health Underwriters (CAHU) and co-founder of the health insurance technology startup Limelight Health, and asked him to share with us what he sees on the horizon for the industry in the next 2-5 years. He shared three insights with us and we took a deeper look.
“Carriers and brokers will continue to merge to find efficiencies and economies of scale.”
The recent mergers of the nation’s health insurance giants have reshaped the industry. The effects of Obamacare and limited profits have been cited as the reason. As this trend continues, agencies will follow suit, combining to form professional service-like firms, with a range of specialties under one roof.
According to Lujan, “by doing so they will be able to pool resources and share costs of technology and other resources like ACA compliance and HR.”
“Price transparency will finally begin to help consumers make informed decisions about their healthcare and technology tools will help empower consumers.”
Price transparency is a hot topic right now. Both Democratic and Republican nominees Hilary Clinton and Donald Trump call for price transparency reforms in their policy platforms. As more pressure is put on providers to make price estimates available to the public, consumers will be armed with the information they need to make better choices about their care.
An added bonus, technology will soon make picking the right health plan a more precise and simple process. Navigation technology will improve the shopping experience for consumers, making it easy for them to compare plans to find the best deal for their situation as quickly as possible. Mobile apps can search massive data in seconds to help consumers find a match that best fits their budget and healthcare needs.
“The insurance industry will continue to evolve and adopt technology to help automate a system weighed down by paper and manual processes.”
The market has undoubtedly changed over the past few years. Soon the millennial generation will dominate the workforce and enter into its peak buying power. As a result, agents and brokers will need to find digital and more-automated ways of doing business to engage these customers. Document management software and cloud-based solutions are two ways agencies are addressing this demand.
Lujan offers this advice: “Don’t deny ‘progress.’ Consumers are actually fed up with the old ways of insurance and want something else. Show them you support modern solutions and progress.”
More and more agencies are using document management software to automate business processes like organizing paperwork, invoicing, and processing claims. Electronic Document Management Systems (EDMS) replace paper files and documents and enable users to send electronic documents through the same steps a paper document or file would follow. Benefits include a paperless environment, easy collaboration between client and agent, and more efficient workflows.
The cloud is revolutionizing the way we do business and the insurance agency is feeling the pressure. Since the insurance industry is highly regulated, many are adopting a hybrid cloud and on-premise infrastructure. This allows for flexibility for customers and clients, while ensuring adherence to ever-changing government regulations.
When considering tech solutions, don’t underestimate the important role of the agent. As Lujan warns “Not everything is solved by technology. Our business is still very high-touch and personal. Tech is a complementary tool to help with the transactional parts of our business. I think traditional brokers have always known this and simply need to consider the new tools and partnerships available to them. Tech does not replace relationships and expertise.”
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