There has been much talk about the changes that the Patient Protection and Affordable Care Act (PPACA) will bring to the way health plans operate. In a previous blog post, we mentioned a few points that could influence decision-making and alter existing processes for health insurance organizations. Of these points, maintaining a medical loss ratio (MLR) of 80% for individual and small-group products seems to have taken a foremost role in restructuring the business processes of health plans.

MLR Measures Depend on Compensation Management
This article in the AIS's Health Business Daily points out how some health plans are already beginning to restructure the way they pay their brokers and agents in an effort to reduce the percentage of premium dollars that go toward commissions.

Conversations with a few of our clients have brought out similar stories on their plans to change commission structures, and how incentive compensation management technology will be an integral factor in allowing them to be responsive and move quickly on these necessary business decisions.

With compensation management technology, carriers can quickly restructure commissions and compensation plans, communicate these changes to their agents and update credentials and appointments, to quickly put new strategies into action.

CRM Is Essential to Compete in a Widening Market
Another PPACA mandate that insurers are bracing for is the large number of potential insureds that will be flooding the marketplace. As the potential customer base grows, competition for market share will be fierce. To succeed, carriers’ customer service must be top notch. 

Advanced CRM technology helps carriers establish an enterprise-wide customer service orientation, improving service and sustaining market share.  According to Adam Honig, President and CEO of Innoveer Solutions, “Insurers With the Best CRM Will Win”. He cites five main areas that carriers should focus on to improve customer service, including implementing “CRM systems that provide [insurers] with a complete view of a member as well as their requirements.”

In his own words, “Insurers that excel at member service will continue to attract more customers and build their bottom line, enabling them to make their services even better.”

With the right package of compensation management and CRM technologies, insurance carriers will be well-positioned to react with agility to the realities of reform and successfully contend with increased competition.

A recent article “A Robin Hood for Inconvenienced Fliers in Europe” in the Wall Street Journal caught my attention for the company’s innovative use of software technology to address a social issue. The article profiles a company founded  by Dutch software executive Hendrik Noorderhaven for the benefit of inconvenienced air passengers in Europe. His company EUClaim takes up cases from aggrieved passengers who are entitled to compensation due to flight delays, cancellations, etc, caused by a fault of the flight carriers.

 “His staff has tapped dozens of sources of information on air traffic, airport operations and weather conditions to build and constantly update a database of every flight in Europe's skies.” EUClaim compares the claims from their clients with the information stored in their database. They make a careful determination of the reason for the hassle, whether within the control of the carriers or due to external factors like weather conditions. The company uses their evaluation to compel the airlines to pay up, and will even fight the matter in court, if the airline is found at fault and refuses to pay.

The driving factor behind the company’s ability to restore the fliers’ rights is a method for data collection and an educated analysis of that data. The company is an example of the versatility of technology to assist in various applications, including providing a valuable service to otherwise disenfranchised consumers.

Insurance carriers, whose business depend heavily on large amounts of data, may note how technology can engender business results through a productive storage and analysis of data. An example of an insurance application of this concept would be a Customer Relationship Management (CRM) solution integrated with a Compensation Management solution. Such a system allows information of agents as well as the sales cycle to be stored and shared in real time between producers and managers. This technology allows carriers to save time and money on simplifying administration and reducing errors. In effect, the carriers become their own “Robin Hood’s” – reducing wasted resources to allow the carrier to better serve their customers.