voluntary benefits: providing choice in a … · medical plans accident hospital indemnity ......

Copyright © 2015 by The Hartford. Confidential. For internal distribution only. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.

VOLUNTARY BENEFITS: PROVIDING CHOICE IN A

CONSUMER-DRIVEN WORLD

Mike Fish

SVP, Product & Strategy

June 22, 2016

Copyright © 2016 by The Hartford. Confidential. For internal distribution only. All rights reserved.

No part of this document may be reproduced, published or posted without the permission of The Hartford.

Agenda

2

Topic

Insurance Industry Trends

• Evolution of market trends

• Employer & carrier investments

Voluntary Products

• Categories of benefit offerings

• Ownership & funding

Employee Preferences

• Current knowledge level

• Enrollment method preferences

• Decision making

Voluntary Enrollment Strategies

• Marketing insights & research

• Communication strategies

• Engagement

Copyright © 2016 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.

INSURANCE INDUSTRY TRENDS


Employees in the Middle

4

INSURANCE INDUSTRY

• Strategic investments in technology & service

• Heavy integration with enrollment & ben admin

platforms

• External data changing the game of pricing

sophistication

PRODUCT & DISTRIBUTION

• Voluntary products continue to expand

• Customer experience and technology

becoming main drivers of placement

• Continued distributor consolidation

• Private exchange growth slower than

predicted

EMPLOYEES

• High customer experience and digital

expectations shaped by e-commerce

• Continued reliance on the workplace

as primary marketplace for benefits

• Increase in benefit decision making

but lack of knowledge

EMPLOYERS

• Remain committed to offering benefits

• Continued adoption of high deductible

plans

• Increased interest in vendor support

for administration

AFFORDABLE CARE ACT

• Cadillac tax delayed until 2020

• Healthcare inflation continues

• Heightened concern on reporting requirements

CONSUMERS

are quickly

becoming the

decision makers

for employee

benefits



Continued healthcare inflation despite ACA reforms

cutting into employer and employee budgets

However, employers of all sizes plan

to continue to offer health coverage

% of employers “very likely” or “likely” to

terminate health plans in the next 5 years (Mercer

Employer Study, 1/16)

Medical inflation continues despite ACA

and the upcoming “Cadillac Tax”

Medical cost trend over the last 10 years

(PwC Health Research Institute medical cost trends report,

2016)

11.9

9.9 9.2 9.0 9.0

8.5

7.5

6.5 6.8 6.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

While healthcare inflation has moderated, it

is significantly higher than CPI and now

represents 17% of GDP

5



Estimated that 75% of employers will offer high

deductible plans by 2018

6



Employers are investing in technology, citing enrollment

& benefit admin systems as top priorities

Market Observations

• Today, employers’ overall benefits and HR systems are

not well integrated.

• New investments are being directed toward employee

portals and front-end systems to better integrate and

utilize benefits (health, retirement, voluntary, etc.)

Sources: EBN Employer Survey November 2015 7



Not surprisingly, carriers are investing in enrollment &

technology to gain competitive advantage

Source: Eastbridge Voluntary/Worksite Marketing: An Executive Perspective, November 2015 (please note

Technological Innovations was not included as an option in prior years surveys)

8


VOLUNTARY PRODUCTS



Employees have access to numerous products that address

three different but integrated needs

Sources: 2015 Employee Benefits SHRM, An Overview of Employee Benefits Offerings in the U.S., SHRM, 2015,

Voluntary Benefits are Necessary Benefits, HUB International, 2015

PERSONAL

Auto Homeowners

Pet Insurance Identity Theft

Travel Insurance Legal Service

INCOME PROTECTION

Life Insurance AD&D

Short & Long Term Disability

Retirement Plans

Financial Wellness

HEALTH

Medical Plans Accident

Hospital Indemnity Critical Illness

Prescription Drugs Cancer

Dental Plans Vision Care

LTC Wellness Programs

10



The majority of employers today offer medical

insurance, disability, life and dental

Source: Employee Benefits at a Crossroads, LIMRA, Q42014

Base = All private employers with 10+ employees

11


Employee surveys reported benefit ownership has shifted

over time to more employee funded at some level

• 71 percent of employers believe voluntary benefits improve worker morale and satisfaction1

• Nearly 60 percent of employees prefer to buy health benefits at work and half prefer to buy life

insurance through work1

• Employees like payroll deduction and they trust their employer has done some vetting on the

carriers that were selected.1

• A long-term trend of employers shifting more benefits costs to employees

12

1. Source: LIMRA 2015 Worksite Sales Report 2. Source: Eastbridge 2015 Employee Viewpoint Report, used with permission



• The fastest growing voluntary health lines were critical illness(CI) and accident insurance, both of

which experienced double-digit growth for five consecutive years.

• Disability and Life show continued steady growth with a larger market share

Source: Eastbridge 2015 Voluntary/Worksite Sales Report, used with permission

Industry sales of voluntary products continue to

show positive momentum

13


EMPLOYEE PREFERENCES



Employees are expected to make more decisions about

products they really do not understand

HR Gets Strategic about Voluntary Benefits, SHRM; MetLife Benefit Trends 2014; LIMRA 2015

Employees who strongly agree that they need more help understanding how their

benefits work and how these options help meet their needs…over 50% agree they

need more help and are confident they use their benefits effectively now

15



Employees prefer electronic enrollment, but employers

and insurers have been slow to meet these demands

68%

16%

6% 8%

2% 1% 0

38%

27%

13% 10%

1% 1%

9%

Online orelectronically

Paperenrollment

form

In a one-on-one meeting

Choicesautomatically

rolled overfrom last year

By phone With a mobileapp (mobile

device)

Depends onthe benefit

Preferred Enrollment Methods Employee vs Employer Perspective

Employee Preferred Method Employers Think Employees Prefer

Sources: Employee Views of Benefits Enrollment, LIMRA, 2015 Preliminary data from LIMRA’s Employer study on

Benefits Communication and Enrollment, 2016

16



• Most tend to make a short sighted evaluation of

the worth of Voluntary Benefits, by looking just

at the per-paycheck deductions.

• One in five do nothing to consider the value and

benefits of Voluntary Benefits.

21%

8%

22%

25%

33%

46%

Did nothing to evaluate whether it wasworth it to sign up for VBs through

employer

Obtain a recommendation from afinancial professional (outside of

employer)

Compare options against similarproducts that can be obtained outside

of the employer

Seek information to determine theoptimal level of coverage for a person

in same life stage/life situation

Assess the long term cost of not beingcovered vs. the per paycheck

deduction

Evaluate the per paycheck deductionin context of monthly household

budget

Ways Used to Evaluate Whether VBs Were Worth It

Employees want choice but need assistance in their benefit

choices, including how to evaluate what is right for them

• Younger Millennials (in their 20’s) are more likely

than their older counterparts to claim they assess

the long term cost of not being covered vs their

paycheck deduction.

• Those with children are more likely than those

without to evaluate the paycheck deduction in

context to their monthly income, as are renters in

relation to homeowners.

Source: The Hartford Employee Decision Research, 2015 Radius

17



Employees also want choices across their benefit

portfolio to best fit their specific needs

4%

10%

33%

30%

23%

Not At All Important

Not Very Important

Important

Very Important

Extremely Important

Importance of Customizing Benefits

53%

86%

Base: 1456 Employed Consumers

Source: Consumer Omnibus Study, December 2012

18


VOLUNTARY ENROLLMENT STRATEGIES



How are we meeting employees & employers needs at time of

enrollment?

20 Available for qualified cases.

• Insights from research allow us to

create highly targeted campaigns

• Data goes beyond age and

gender,

and explores voluntary buying

behavior

and attitudes

• Communication materials during

benefits enrollment are tailored to

specific employee profiles

• Drives participation in Voluntary

benefit plans



The five benefits purchasing personas of employees

21



Using the personas to create a customized

communications strategy

22

• Timing

Start communication early in the enrollment journey, giving employees

information to consider all year long.

• Messaging

Reinforce the value of protection and affirm their choice. Information should be

easy to scan and compare - using brief descriptions/vignettes and clear cost

comparisons.

• Tactics

Email and digital education tools on a benefits website may enable

employees to get access to information throughout the year. Consider modern

means of communications via SMS or Social Media in combination with the

more traditional benefits fair or enrollment meeting.

INFORMATION

SEEKERS

&

BUSY

BUDGET-

STRETCHERS

Available for qualified cases.



Communications in all the right places

23

https://www.facebook.com/?feed_demo_ad=6028980921778&h=AQAap8pbLMVDpJcc



Keeping it Simple

Consumer Humor Video – Accident

insurance

Chalk Talk – Critical Illness insurance

24



Ongoing engagement through non-traditional

sources of consumer data

Peer-to-peer Ratings and Reviews

• Voice of Customer reviews of claims and

enrollment experiences

The Hartford’s Benefits Community Council

• Online community of 300 consumers providing

ongoing feedback

• Ongoing measurement of communications

relevance, clarity and engagement

25


Q&A

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