Income protection market: Dutch consultants call on insurers to raise the bar

By Insurance, News, Pensions

The Dutch collective income market is booming – its social relevance is greater than ever and margins are improving. Foreign insurers enter the market and several Dutch insurers make strategic acquisitions throughout the value chain. At the same time, consultants and insurers are increasingly at odds. IG&H spoke to several parties in the market to determine how they can break the tension and join forces to work on effective customer solutions together.

There is a strong consolidation in the income protection market. In 2018, for example, the 50 largest consultancies accounted for half of the total production – 60% without sick leave insurance. All insurers are fully committed to this leading group and are improving their services. Nevertheless, they don’t always hit the right note: insurers’ average NPS among income consultants is -15 in mid 2019. The average performance score is 7.1.

Gradually, the consequences are becoming clear. For instance, >5% of the total WIA/WGA premium is placed with foreign insurers, elipsLife being the main example. Their success primarily results from ample underwriting capacity, sharp pricing, and an equality-based collaboration model with room for services offered by the consultant. In addition, we’ve observed a development we’re familiar with in the non-life market: substantial growth of mandated brokers. By now, 35% of the sick leave portfolio has been placed with mandated brokers (2016: 25%) – with service providers (including Felison, Nedasco, and Mandaat) making a name for themselves. Often, they turn out to be the go-to solution in the SME segment: they offer administrative convenience and quickly arrive at a market-wide price comparison. Between 2016 and 2018, their portfolio grew by more than 50%, and their market share in the intermediary sick leave market has increased to as much as 12%.

We believe insurers can improve their services on three axes:

1.    Mismatch between customer demand and product offer

Sustainable employability is high on employers’ agendas: absenteeism costs are rising, and in this difficult labor market, all attention goes to being a good employer. At the same time, income issues are growing more complex, and customer needs increasingly diverge.

A common observation is that many insurers opt for standardization – which, of course, results in simplicity and lower costs. But it also leads to a limited response to sector-specific needs and a lack of product innovations. Furthermore, consultants believe predictive data are still underused. For example, they are open to a model in which investments in sustainable employability lead to lower premiums. After all, it improves the risk profile, which means the insurer can benefit from a decreasing claims ratio. Finally, they indicate that the risk appetite of Dutch insurers seems to wane, making it difficult to insure a growing part of the market.

2.    A lack of digital innovation

As a result of consultants’ professionalization and cost pressure from the market, they place increased demands on digitalization. A much-heard adage is, ‘Stagnation means regression’ – which concerns administrative processes, among other things. Requesting information during quotation processes is often time-consuming, and the lead time for customized quotations increases. Furthermore, consultants expect more digital insight into customer and risk data so it can support their consultancy and serve as an additional service for employers.

3.    Declining trust due to conflicts of interest

Both consultants and insurers support employers in improving sustainable employability through consultancy and various prevention & reintegration services. This often leads to conflicts of interest with consultants and insurers ‘competing’ for access to the customer and the associated revenue. To many consultants, recent acquisitions by Aegon, a.s.r. and NN also fit into this picture. They fear that insurers will become competitors in an increasingly important part of their business model. Therefore, their message is clear: actively seek collaboration so the customer ends up getting the best solution.

In-depth solution guidelines

Our conversations yielded more than a problem analysis. In fact, they’ve provided concrete tools for a better collaboration between consultants and insurers. Curious? We’ll explain them in our next three blogs.

Written by: Bob van Opstal (Manager Pensions) and Idriss Abdelmoula (Consultant Pensions).
For more information, contact Bob: bob.vanopstal@igh.com

IG&H and GroupLife combine forces

By Banking, Health, Insurance, News, Pensions, Retail

Consultancy firms IG&H and GroupLife are moving forward together under the name IG&H, resulting in a specialized consulting group that is able to help realize business and technology transformations from start to finish.

Both companies have in-depth sectoral knowledge, close customer relationships, high quality people and service. By combining their expertise in strategy, organizational transformation, data analytics and technology, they will be able to more effectively help organizations with transformative matters. The new consortium includes more than 220 specialized professionals.

Execution of strategy requires integral approach

Jan van Hasenbroek, managing partner IG&H: “The rapid developments in the technology sector have an enormous impact on the business models of our clients. In order to remain successful in the future, our vision must include addressing organization and technology together. This will lead to corporate strategies being immediately operable, providing concrete results and sustainable organizational transformation. GroupLife has an impressive track record and a proven methodology in business modelling, implementation of technological platforms, and data management. That’s why a collaboration fits well within IG&H’s strategy to continually strengthen its technological ecosystem.”

Wim Groenen and Tom Bottinga, co-founders of GroupLife: “In previous projects with joint clients, we discovered that we had similar ideas about how to address complex business transformations. IG&H knows how to combine its expertise in strategy, data analytics, technology and organizational transformation with sector knowledge. We are delighted with the collaboration and together with IG&H we can make an even greater contribution to the success of our clients.”

About IG&H

IG&H is committed to help leading organisations in the financial services, retail and healthcare sectors. With 160 involved and enterprising professionals, the consultancy and implementation firm, based in Utrecht, helps organizations take steps towards radical customer centricity. They set high standards for themselves and their way of working. With in-depth knowledge and a personal approach, they aid their clients to help them improve the sector. IG&H is recognized as a ‘Great Place to Work’ and puts a lot of emphasis on a high net promotor score.

Employee satisfaction and NPS increased within 10 weeks

By News, Pensions

Daily performance dialogue on customer goals leads to unprecedented collaboration.

The IG&H ‘IMPULS’ approach has enhanced employees’ ownership and mutual collaboration. As a result, both the service provision and the working atmosphere have improved strongly in a short period of time. This development has continued autonomously after the initial 10 weeks, thus laying the foundation for a continuous improvement culture at Loyalis. The balance between the ‘Hard’ and ‘Heart’ building blocks of the IG&H ‘IMPULS’ approach distinguishes ‘IMPULS’ from other methodologies.

Challenge
Loyalis aimed to realize higher customer satisfaction (NPS). Analysis showed that internal collaboration and customer service needed to be improved to achieve this goal. Service provision to employers posed a challenge: substantial improvements had to be made in all areas. Their stalled execution resulted from the limited preliminary translation of the organizational strategy, which was due to a lack of ownership at several levels and due to insufficient operational control.

Solution
A successful transformation of the internal organization has been a crucial part of the solution. The ‘IMPULS’ method, used by and characteristic to IG&H, is based on the aforementioned ‘Hard’ and ‘Heart’ building blocks. Through our ‘Hard approach,’ we stated perspicuous overall objectives, set clear KPIs in collaboration with Loyalis, and provided a methodology that clarifies performances. The ‘Heart approach’ has allowed Loyalis to measure behavior that supports performance, encourage desired behavior, and discourage undesired behavior. As a result, the internal organization is back on track.

Way of working
The bottom-up approach used by IG&H has immediately resulted in better performances – by allowing employees to take more ownership and by contributing positive energy and inspiration, but also through better collaboration and a focus on customer service. The performance dialogue has become key to continuous improvement at Loyalis. Teams are now learning to analyze and solve challenges in an 8- to 10-week time period, in addition to acquiring and encouraging feedback (skills).

“Extremely professional and results-oriented. I am a warm and active supporter of IG&H’s working methodology.” Mario Bakker, Marketing & Sales Manager, Loyalis

Footprint
In ten weeks, an initial IMPULS wave was performed within Loyalis. Employees were provided with assistance and guidance to enter into a performance dialogue by collaborating in a different way based on sharp objectives. After these ten weeks, measurements have shown a strong increase in both customer satisfaction (NPS) and employee satisfaction (ENPS).