The group life and voluntary benefits sector is undergoing a significant transformation, driven by artificial intelligence adoption, changing workforce demographics, and evolving employee expectations. Carriers and benefits administrators are rapidly incorporating AI, including generative AI, to revolutionize how benefits are delivered and managed, as well as for benefits communications, customer service, product recommendations, and education.
AI is being integrated into benefits administration platforms to provide personalized recommendations for both employees and HR personnel. These AI-powered systems can now offer tailored benefits suggestions, enhance communication strategies, and provide virtual benefits assistants to handle employee inquiries. This shift toward AI-driven solutions is helping to create more efficient, user-friendly experiences while reducing the administrative burden on HR teams.
The voluntary benefits market continues to show robust growth, with Eastbridge Consulting reporting sales reaching $9.34 billion in 2023, representing a 6.7% increase from the previous year. Term life insurance products, short-term disability, dental and vision care, and supplemental health products are leading this growth. Additionally, newer benefits are emerging to meet evolving workforce needs, including:
- Caregiving support
- Fertility and family benefits
- Financial and debt management services
- Mental health and wellness programs
- Sustainable commuting options
- Telemedicine and virtual health solutions
With up to five generations in the workplace, carriers must cater to diverse needs and preferences. For instance, Baby Boomers prefer face-to-face conversations about benefits, while Gen Z employees favor social media communications. This diversity requires carriers to implement multi-channel communication strategies to effectively reach all employees.
Data exchange and integration remain significant challenges for the industry. Without clear standards for information exchange in group life and voluntary benefits, carriers are exploring various solutions, including partnerships with insurtech firms and the development of API strategies. This has become a potential area for competitive differentiation as carriers seek to streamline operations and improve customer experience.
The pandemic’s impact continues to influence the sector, with excess mortality persisting among working-aged adults. While this hasn’t significantly affected carriers financially, it has accelerated the need for digital transformation and remote capabilities. The shift to hybrid work has also changed how benefits are communicated and administered, with carriers investing in enhanced digital platforms and self-service capabilities.
The landscape of group benefits is becoming increasingly complex, with carriers needing to balance traditional offerings with innovative new products while adapting to changing workforce demographics and technological capabilities. Success in this evolving market will depend on carriers’ ability to leverage AI and digital technologies while maintaining the personal touch that many employees still value in their benefits experience.
Group and voluntary/worksite carriers have several key technology priorities going forward:
- Enhancing employee communications and education across multiple enrollment systems and channels
- Developing more sophisticated data exchange capabilities between brokers, enrollment specialists, and plan sponsor systems
- Implementing core systems that support advanced analytics and offer greater flexibility in administration
- Expanding self-service capabilities and improving claims handling efficiency through digital workflows and rules-based adjudication
As we move through 2024, the focus on digital transformation and AI integration shows no signs of slowing, suggesting that the group benefits sector will continue to evolve rapidly to meet the needs of an increasingly diverse and tech-savvy workforce. For more information, read our report Business and Technology Trends, 2024: Group Life and Voluntary Benefits or reach out to Paul Mattern ([email protected]), Nancy Casbarro ([email protected]) or me ([email protected]).
