The number of millennials is growing and they will soon dominate in the insurance market. What’s so special about providing insurance services for them? Let’s have a look at an average person that is about 28-30 years old.
They experienced the revolution of the Internet when they were kids, the release of the first iPhone when they were teenagers. And now they use gadgets for everyday activities and they can solve their tasks with a few taps on the screen.
What do we have now with the insurance services? You need to have a talk for about 30-40 minutes to get any quote. There’s also a need to fill in dozens of papers and wait for a few days for approval. This routine makes millennials ignore insurance services and avoid communication with brokers.
“Millennials are going to take the wheel and shape the road ahead in health care,” predicted Jean Hippert of PNC Healthcare in 2015. They now comprise a fourth of all Americans.
Let’s have a look at how insurance companies can benefit from digitalizing their services and making them attractive specifically for millennials.
Small insurance agency management systems – UI is NOT enough
The first thing that insurance software houses tend to update to the needs and expectations of their potential clients is the user interface. How does it look like in real life? The company gets a nice-looking application that can be used on mobile devices. A client submits an application for a new policy and gets an answer like “We’ll get in touch with you in 24-48 hours”.
What happens after the client receives such a message? There’s a need to wait for a few days until there comes a chance to sign a contract. There’s no big difference between how it was 10 years ago and now besides a nice-looking user interface. To make the whole process efficient, there should be a robust back-end system that could handle such requests and automate them.
There’s a need to look for some other insurance broker software solutions that you might have already used to.
General insurance software solutions
Today’s solutions are mostly related to legacy. It means that no breakthrough variants have been used by enterprise insurance corporations – they are used to traditional approaches that were created 30 or even 40 years ago. And it may be truly hard to change the processes inside such companies that have a long history.
The flaw of legacy systems makes the demand for innovative solutions very low, so there are no universal off-the-shelf options that you can buy, install and start using right away. What we have now is an opportunity to order a custom software solution that will be built specifically for this very company’s workflow.
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What you need to build a new application: an attractive UI and a robust back-end system. The first will be responsible for the interaction with users while the latter will be responsible for everything that happens behind the scene. It’s good if the app is available for both users and insurance company employees from any devices and at any time of the day or night.
The only drawback of implementing new systems inside insurance companies is the time that is required for training the staff and automating all the processes. Once it’s done, there will be no inefficient use of resources.
Auto insurance software
Price is not the issue that matters the most for millennials. Personalization and digitalization of the services make this group of people choose a specific insurance company. This can be clearly seen in terms of auto insurance where millennials pay about $1280 while boomers pay about $892 for an annual policy. And they pay $1750 if they live with their parents. This means that using traditional approaches is no longer efficient.
Facebook has organized a study – about 41% of insurance agents provide their quotes online. This makes them more competitive and attractive in the current market. Offering short and fast contracts for auto insurance policies will become the dynamics for a great increase in the number of clients. Auto insurance services should be highly adaptive and the back-end system of the software should be flexible enough as well.
Want to know the latest trends for insurance software? Have a look at this article!
Health insurance software – expectation vs reality
What do millennials expect to get from the software they use? How do they consider the use of insurance software? Here are the key facts about what this group expects.
1. They like to shop. These consumers are used to conducting their own research and making their own purchasing decisions. When it comes to health benefits, this translates to a desire for comparative information and an expectation for customization options.
Millennials want to tweak their benefits package according to their lifestyle – with choices for medical, dental and vision coverage; as well as life, disability, wellness programs, and even pet insurance.
2. They expect technology tools. Millennials spend most of their working hours online using a tablet or smartphone. They like 24/7 access to information and are used to researching options and pricing via online tools. Accordingly, millennials want easy online access to their benefits information, as well as self- service tools for comparison-shopping and enrollment.
They also want that access and those tools to be optimized for their increasingly mobile lives. The websites of just a few years ago are becoming hopelessly dated if they aren’t designed for use on a variety of platforms, especially mobile devices.
3. They want control of their money. Millennials are used to having power over their money. The more they can dictate how their health dollars are spent, the better they will feel. As younger and generally healthier health care consumers, millennials usually have lower medical claims and don’t see tremendous value in health benefits.
They’d rather pay lower premiums and hang onto more of their money. They also don’t expect low deductibles and co-pays the way the previous generation did. For millennials, high-deductible plan designs can be a perfect fit, as long as they have low premiums and are paired with a health savings account (HSA) or flexible spending account (FSA) – it gives employees better control over their money.
If we have a look at the Salesforce survey, we’ll see that 6 out of 10 millennials prefer video chats to personal visits to doctors. They want to book appointments with the help of software via a smartwatch, mobile phone or a tab. But can insurance companies offer today?
Health insurance services aim at protecting people from paying big sums of money in the case of illness or injury. But it can take a lot of time to choose an insurance company and the policy. When you start looking for available options, you will face the need to make calls to the company. You will have to do this when you want to find out any information or solve any problem.
Here’s a typical plan of actions that you take to solve a problem:
- You can have a talk to the insurer. It can be done via a phone call.
- You can send a complaint. It can take 30 days for the insurance company to make a decision.
- In the case of an urgent problem, you might have to wait up to 72 hours until the expedited review is finished.
- If you are not happy with the outcome, you can call or send a complaint to the local state governmental agency. For example, you can call the California Department of Insurance (CDI) if you live in this state.
What software is used by health insurance companies?
We can consider insurance companies as traditional enterprises that use common software solutions to perform their services. Some of them are:
- Outlook or Gmail for emailing
- AWS, Azure, Google cloud platforms for hosting their infrastructure
- Virtual servers with Windows or Linux OS
- Virtual desktop infrastructures like Citrix or VMware
- VOiP systems like Cisco
- Software-defined network like Juniper
These are just some popular off-the-shelf solutions that help insurance providers solve specific tasks of the front and back-office processes. The disadvantages of using the above-mentioned software is a lack of automation and the need to set up each app and process manually.
Insurance software vendors come to the rescue when you need something more than a standard set of features.
If we consider the software solution that will be integrated with the commonly used apps or the ones that were built from scratch, we will have to solve the following tasks:
- Medical record keeping. It’s a module or an app that keeps the data about individuals.
- Medical practice management. It’s used for booking appointments, billing and paying for the services. It’s good for small and big hospitals as well.
- Networking. It will connect insurance company, broker, hospitals, drug companies and other medical representatives in one place.
- A web-based portal. It can be used for booking appointments, advertising additional benefits, informing individuals, etc.
- Hospital management. It can be used for managing the workflow for a middle or big hospital including the inventory management, making bills, paying for the services and for security issues.
- Software solutions for improved operation of instruments or devices. Each instrument in the hospital should be operated by enhanced software.
- Research and analysis. It should focus on improving current processes and automate everything that can be automated.
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Insurance agency management systems cost
The cost of any software solution depends on what features it includes. Let’s have a look at the most common features of an insurance agency management system and predict the approximate cost.
CRM. This feature aims at improving the interaction between the company and the clients. Each communication channel should be properly set up and managed. The cost starts at $25,000.
Task management. It’s all about organizing everyday assignments in a smooth workflow. The cost starts at $500.
Claims management. It’s all about solving clients’ claims – it’s the very thing that can be and definitely should be automated as it will let the company scale up with no pain. The cost starts at $800.
Policy management. This feature is for easy and fast work with policies. The cost starts at $700.
Client portal. Clients will have a personal account where they can view available benefits, update their current policy, add dependents, make payments and so on. The cost starts at $1,000.
Mobile access. It aims at reaching a bigger number of clients and improving interaction with each of them. The cost starts at $1,000.
Payment processing. This feature will make the workflows inside insurance companies smooth and enhanced. The cost starts at $1,500.
Accounting. This feature will automate reports generation and offer standard functionality. The cost starts at $2,000.
Invoicing. Bills can be created and delivered to clients automatically – it can make the lives of insurance company employees easier. The cost starts at $600.
The cost of a simple MVP (minimum variable product) may start at $20,000 and go up to $150,000 depending on the complexity and pack of features. The cost will also include planning, business analysis, project management, coding, testing, QA, and UI/UX design.
Boost your business agility with DICEUS
Business agility matters for insurance companies. We observe the need to turn legacy into innovation and recommend insurance companies to stick to these trends:
Mobile first. Millennials use mobile gadgets everywhere they go. Insurance agency management software will gain a robust functionality with access from wearables and mobile devices.
Self-service. More and more people prefer to pick up the policy, add dependents, pay bills or make claims without personal interaction with the insurance company. All can be done with a few clicks or taps.
Automation. You can improve your marketing and sales campaigns, management issues, solving claims and so on. It will reduce human working hours, lower risk of making a mistake, raise the processes efficiency.
Personalization. Insurance companies can collect data about their clients from wearables and services they use every day. This information will be processed to generate personalized policies that could meet the needs and expectations of millennials. For example, it can be auto insurance for borrowing someone’s car.
As a technology partner for insurance companies, we do our best to deliver software solutions within the shortest time to market. We follow trends and we implement them in every application or system that we work over. If you’d like to find out more about DICEUS company and our services, please fill in the contact form below.