Look to BenefitsPlace as an example of an emerging hyperconnected ecosystem for insurance

HFS’ recent coverage outlines how important it is for insurance carriers to explore new consumer and business ecosystems to serve new customer needs. We found an example of one such ecosystem Benefitfocus, an employer benefits and enrollment platform provider. It’s been one year since the launch of its connected consumer platform BenefitsPlace™; the company recently laid out its progress and future plans at its One Place event. Benefitfocus has some solid fundamentals in place to help it take a central role as an ecosystem owner in the next few years. Distribution and channel leaders in L&A (life and annuity) and P&C (property and casualty) insurance should watch the BenefitsPlace platform closely as they seek new distribution avenues to get closer to customers.

Insurance hyperconnectivity creates new opportunities for carriers to engage with their markets

HFS’ research in the past year has brought forward the emergence of hyper-connected enterprises, where businesses will extend outwards to interact and create meaningful and differentiating connections with ecosystem partners and end customers. As our recent POV outlined, this shift towards more connected ecosystems is already underway for P&C and L&A insurance. Due to the emergence of digital ecosystems aggregating around consumers and businesses, the rigid, fundamental structuring of the insurance industry is set to change, and is already becoming more fluid. The options for most carriers then, are to either join such an existing or emerging ecosystem or to create a new ecosystem altogether through a platform play.

Looking out into the market for examples of emerging insurance ecosystems, HFS recently engaged with Benefitfocus, a benefits admin and enrollment provider. The company is undergoing a transformation to play in this emerging and hyperconnected insurance economy. One year since it launched its BenefitsPlace platform, the company recently held its One Place conference to share results and future strategic plans with customers, partner, and influencers.

Exhibit 1: Benefitfocus’ pivot into a connected consumer platform brings many entities together across the benefits ecosystem

                                                                                                                                                                                                                                                                                                                                  ^{Source: Benefitfocus, 2019}

What becomes apparent is that Benefitfocus will need to continue re-focus to take on this larger role as an insurance ecosystem. With its consumer platform, Benefitfocus now opens up benefits enrollment throughout the year for its clients’ workforces and brings much-needed modern tech features such as self-pay through mobile wallet, mobile enrollment, and a recommendations engine to help consumers pick the best benefits for their needs. Most importantly, the platform is now opened up to various partners that go far beyond the traditional medical benefits carriers with a significant opportunity for insurance. From specialty products such as pet and renter’s insurance, to bringing major personal lines products such as auto insurance, this is clearly just the start of BenefitsPlace’s ecosystem play.

BenefitsPlace is compelling for hyperconnectivity due to its focus on data, innovative insurance products, and fair treatment

1. Focus on creating data standards: Benefitfocus has made a $30million investment towards improving the accuracy, security, and availability of the data being used on its platform. Clean, trusted data is a critical need for the future to be able to support fully automated and data-driven insurance products. Given the many challenges in data mismatches and errors between various entities such as HR admin systems, consumer input, and supplier errors, the ecosystem owner is well placed to insist on high-quality data to drive a better consumer experience. Benefitfocus undertook research with its supplier base, and it is now handing out certifications for ecosystem partners that pass its data standards. When evaluating partners for its supplier bases, Benefitfocus undertakes a review of potential partners including financial position and data security standards. If suppliers do not meet the standards that Benefitfocus has set, those suppliers are not invited to participate in BenefitsPlace.
2. Featuring new breed of insurtech plays: The One Place event highlighted select suppliers that are insurtech-savvy and driving new types of products into the market with BenefitsPlace as one of their distribution. In fact, the platform already features a supplier that is designing a product term life insurance policy with Afficiency that will be exclusively available to consumers through BenefitsPlace. Toggle, a millennial-focused insurtech backed by Farmers Insurance is another supplier that is experimenting with new distribution plays like BenefitsPlace. In conversation, Toggle believes it needs to engage with platforms like BenefitsPlace to reach its target audiences for its renter’s insurance product, which is fully configurable on the platform.
3. Large consumer base and the insistence that “everyone wins” on their platform: More than 23 million consumers connect through the Benefitfocus platform. While its new direction is all about ensuring consumer engagement, the company has worked out its commercials and strategy to ensure that all parties participating in its ecosystem are equally advantaged.

The Bottom Line: By bringing together employers, suppliers, consumers, and brokers, BenefitsPlace could become a formidable distribution platform for carriers as well as an interesting training ground for new breeds of insurance products.

As the traditional boundaries of entire market segments continue to blur, in the future, insurance will find its way into many consumer and business ecosystems. BenefitsPlace is one such example where consumers have an opportunity to interact with and select new types of insurance products when engaging with their employer benefits portal—not just for open enrollment season, but year-round as and when their needs change. Ambitious carriers must proactively explore synergies that, like this one, that not only give them an “in” to distribute products better, but also provide an opportunity to improve industry standards altogether.