Changing customer needs and improving intermediary productivity have been driving the adoption of digital technologies in employee benefits and group risk. Data protection now makes it a necessity.

We’ve always believed in the power of digital delivery in group risk and employee benefits to provide speed, convenience and lower costs to our customers. All this while reducing risk for advisers and helping them improve their productivity so they can get more employers covered. The adoption of digital processes has continued at a steady rate for the last 8 years, but there is every likelihood that the introduction of the General Data Protection Regulations (GDPR) will accelerate that adoption.

What is GDPR and why is it important?

As you’ll no doubt be aware, the General Data Protection Regulations (GDPR) also known as the Data Protection Act 2018, is EU-wide legislation designed to improve the way organisations handle personal and sensitive data. This is in order to better protect the rights of the public.

Providing group risk insurance, and most employee benefits in fact, is based on processing personal data; there’s no way the insurance can be provided without the personal data of the employees to be covered. So it’s vital that all parties involved in providing the insurance, understand and comply with the new legislation.

With data security absolutely paramount we anticipate much greater scrutiny from employers about what data is provided for insurance purposes. And how that data is transferred between employer, adviser and insurer.

Applying for cover online, not only quick but secure.

For the most part, online systems that provide quotes for prospective employers have been adopted well by intermediaries. Instead of waiting weeks for a quote provided by an underwriter, let alone addressing mistakes, making amendments and chasing quotes which all adds time. An online quote can be obtained in just a few minutes.

Crucially it’s also secure. Advisers upload employee data to the insurer’s website. They answer questions about employees absent from work and any other medical information needed in an encrypted format. As it’s the insurer’s website, they take responsibility for its security.

In the age of greater data security, the alternative looks increasingly less appealing. Emailing personal employee data and in some cases medical information to multiple insurers, protected with a myriad of encryption software and password combinations. That’s providing the sender remembers to encrypt of course. Not only does this add inefficiencies – problems accessing files, calls to share passwords etc – it is not as secure. Risky business for advisers.

Most insurers now have secure online quote systems. So with increased engagement will likely come further development and aggregation over time.

Secure medical assessments

Although not routinely required for most employees, some do have to provide more information about their health and lifestyle in order to receive their cover. It may surprise outsiders to know that paper forms still dominate this process. Despite the introduction of tele-underwriting and for Ellipse, an online assessment process. Not only does the latter deliver a far superior customer experience. Only relevant questions are asked based on prior responses, rather than navigating a paper form which could reach 30+ pages – which results in a much quicker decision, it is also much more secure.

The only people who need to see an employee’s medical information is the employee themselves, and the insurer’s medical underwriters. That is what happens in a secure online process. The same cannot be said for paper forms. Which have been known to be returned via the employee’s manager, HR department, and sometimes their employee benefits adviser. This doesn’t just not meet the required safeguarding standards for protecting personal data included within the Data Protection Act 2018. But the potential for the data to be lost or intercepted in transit is much higher than it should be.

While more innovations are needed to further develop the online medical assessment process. In order to better integrate the process with an employer’s benefit portal for example, therefore providing a more seamless, timely and speedy customer journey. The days of paper forms are surely numbered now.

What payroll has done for pensions, it can do for benefits too.

Again driven by the need for process efficiency, we have seen how payroll companies have facilitated the auto-enrolment process for workplace pensions. This is by providing solutions which offer straight through processing of data to the pension provider.

The necessity of such automation has not yet reached group risk and employee benefits. Simply because demand has not exceeded the capacity of the existing process. For the most part employee data is sent via email (again using various encryption methods) from employer to adviser to insurer. By offering online services for employers to upload their own data directly to our secure website, we have encouraged many advisers to step away from regular data handling tasks in favour of more productive ones. Plus, employers get greater control and certainty over what is happening with their employee data.

The Data Protection Act 2018 means that advisers must now critically appraise the risk/reward from continuing to handle that data. As any data breach while in their care has serious consequences for them. We anticipate that for some types of business; small, simple schemes where there is little opportunity to add value – advisers will calculate that the reward isn’t worth the risk. Especially given the alternatives available.

In the long term there is great potential for payroll connections to be made which allows data to flow seamlessly to the insurer. This will provide a greater degree of convenience for the employer (no spreadsheets at all) in a completely secure environment. While the need for process efficiency is moving us in that direction, data protection may well give the big push needed to make that a reality in the near future.

In a nutshell

The renewed focus on data security will accelerate the digital delivery of employee benefits, by building on the benefits of improved operational efficiency. All those in the value chain; employers, advisers and insurers need to consider what part they play in the digital processes of the future.

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