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.

At the recent ACORD LOMA and AHIP conferences in Las Vegas, much was discussed about the value of exceptional customer experiences, from quickly bringing new products to market to winning share and loyalty through adaptive and efficient sales processes. These components can quickly differentiate successful carriers from the rest.

Forward-thinking insurers who value customer experience as a cornerstone of their sales strategy have already started to turn to cutting-edge technology. It will be highly beneficial for other organizations as well to be early adopters of technology for Customer Relationship Management (CRM) and Sales Performance Management (SPM).

An insurer’s distribution channel is an invaluable tool for interacting with and leaving a lasting impression on customers. More insurers are beginning to embrace these advanced technologies that empower the distribution channel at each step of the sales cycle. Tools that deliver sales performance management capabilities allow insurers to equip the channel to be customer-centric, and also improve internal processes, such as designing agent-motivating incentive plans and executing commission payout cycles.

Learn how to raise your agents’ performance to its optimal level to consistently meet market and consumer demands from a highly successful new agency during our exclusive, free webcast.

Join Jeff Walker, Vice President at Insphere Insurance Solutions, as he shares how his company has implemented a cutting-edge technology platform to maintain the right mix of products, implement better compensation programs, and distribute powerful sales tools to their agents.

“By integrating these tools into our proprietary technology platform, our agents will operate in a seamless multi-carrier environment that will feel like they are working with a single carrier for everything from quoting, electronic applications, application tracking, managing compensation and managing their client base”

- Philip Hildebrand, President and CEO of Insphere Insurance Solutions

Register now for the webcast “Optimal Agent Performance: The Secrets of Distribution Success Revealed” and gain better insight into the sales pipeline of your producers, increase agent engagement, and reduce administrative costs.

Attend to learn how to:

• Quickly bring new products to market
• Launch new incentive plans with ease
• Provide agents with a captive experience with multiple carriers
• Leverage technology to encourage cross-selling and up-selling

Health insurers will be faced by challenges in the near future with the implementation of health care reform. Given the multitude of sanctions in the bill, there will be a big impact on the insurance business model. A few important points that could influence decision making are:

• Fixed Medical Loss Ratios
• Pre-existing Conditions and Removal of Lifetime Caps
• Universal Coverage

What actions should insurers take to best position themselves in the wake of this new and multifaceted law? We anticipate that things such as cost control and ultra-lean operations will be foremost on your minds.

Insurance organizations need to devise a strategy that will allow them to sync with the mandates in the reform bill and stabilize their internal operational structure. They will benefit most if they treat this time as an opportunity to rethink organizational systems and position themselves to adapt to the potential business growth and react quickly to changes. With the right systems in place, carriers will be able to effortlessly manage key operations like distribution. The distribution channel plays a significant role in penetrating the market with new products – an essential factor to stay above the competition.

This year’s AHIP Institute 2010 conference to be held at Caesar’s Palace, Las Vegas, provides a great opportunity for health care and health insurance organizations and executives to understand the big picture and devise the right strategies for the future. We are excited to showcase our solutions at AHIP and discuss how health plans can better support their distribution partners, giving them the insight they need to be smart and productive.

Carriers using a comprehensive commissions and incentive compensation management solution that can seamlessly integrate with multiple systems including CRM can lead the way, as proven by one of our recent customers, Insphere Insurance Solutions.

VUE Software is providing a free opportunity to AHIP attendees to register for a webcast presented by a Vice President of Insphere Insurance Solutions titled Customer Relationship Management for Distribution Success: Support Agents Throughout the Sales Cycle to Better Meet Client Needs. 

Visit VUE Software at the Microsoft booth #523 for more details or click here to register online.

VUE Software delivers sales performance capabilities to carriers through VUE Incentive Point, which integrates its premier offering VUE Compensation Management with Microsoft Dynamics CRM. The solution is available in on-premise and on-demand (Software-as-a-Service) models, giving insurers even greater flexibility and lower cost of ownership.

During this year’s sessions, the discussions centered on the technology imperatives for carriers and agencies to help lead them through these ultra-competitive and fast-changing times. Three points from a trio of industry analysts nicely summed up the direction that carriers need to focus:

• “Insurers should invest in IT for capability more so than cost efficiency.” – Matthew Josefowicz, Director, insurance, at New York-based Novarica
• “Being fast doesn’t help if you have the wrong product mix.” – Kimberly Harris-Ferrante, VP & distinguished analyst at Stamford, Conn.-based Gartner
• “Insurers need to think more about the big picture, and use that to make tactical adjustments.” – Craig Weber, SVP at Boston-based Celent

There is additional emphasis on technology being customer centric and improving distribution channel productivity. We’re already witnessing a strong pace of core system replacement amongst carriers with more stable and agile systems able to accommodate future growth. Today, this flexibility is a norm in the functionality of the systems.We also observed a renewed focus on straight through processing with the intention of reducing transaction friction to ensure agents’ focus remains on selling.

Additionally, technology should provide a platform for agents to take on diverse roles and be more flexible with their sales efforts. Utilizing the services of Customer Relationship Management as a part of their internal systems seems like an old idea, but it’s still not deployed uniformly through the industry and is one of the most reliable returning technology investments. Equipped with the right insight, both product specific and customer specific, agents can establish their value as insurance advisors, resulting in greater customer loyalty.

In a nutshell, the major takeaways are:

• Agile and capable systems
• Growing and diversifying distribution channel
• Utilizing CRM
• Carriers focusing on loss prevention rather than solely on loss reimbursement

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.