The past few years have seen a rapid acceleration of digital experiences in employee benefits. Curious how your company stacks up? This guide outlines 30+ employee benefits stats from research firms including McKinsey & Co., Ernst & Young, PwC, LIMRA, and more. Taken together, they paint a picture of increasing demand for convenient, transparent, and functional benefits experiences, while providing context for what’s ahead. Opportunities abound and it’s our hope that this data illuminates the path towards an open, connected ecosystem – with the ultimate goal being better benefits for all.

“It’s a critical time for the benefits ecosystem. We all need to be doing everything we can to raise the bar for what’s possible — not just for the health of the industry, but for the sake of everyone who receives care.”- Shannon Goggin, CEO & Co-Founder, Noyo

Benefits administration is more digital than ever

From the great resignation to a looming recession, recent years have been a roller coaster for employers. But one thing has remained consistent — the pressure to deliver personalized, dynamic benefits experiences. As a result, benefits software are embracing modern technology that can enable seamless, all-in-one HR experiences. We expect investment in connectivity will increase as faster, more reliable data becomes even more of a competitive advantage.

• 7 in 10 employers have digitized their benefits enrollment

• Employers use an average of 2 to 3 vendors to help administer their benefits programs

• An API-enabled benefits administration process can save as much as 200 hours per year

• Top 3 benefits challenges facing employers: 

  1. Controlling costs

  2. Increasing efficiency

  3. Ensuring legal compliance

Sources: Guardian, Guardian, and Guardian

Connectivity is now king for insurance carriers

Like retail and hospitality, insurance was forced by the pandemic to accelerate digitization. All that effort wasn’t wasted, though, as consumers eagerly embraced the results. The challenge now is upgrading legacy technology without sacrificing growth. And with big tech and insurtech looking to disrupt the marketplace, the pressure is on to do it faster than ever before. As LIMRA predicts, a holistic experience, ease, and quality will win the day over cost going forward.

• 80% of insurance customers would switch carriers due to lack of user-friendly digital interface

• 1 in 3 employers would recommend switching carriers for real-time connectivity

• 80% of insurance executives say that their organization’s business and technology strategies are becoming inseparable

• Insurance technology budgets are expected to rise 13.7% in 2022

• 66% of employers prefer carriers that connect with their benefits technology platform over those offering the best value product

• The financial industry has over 2,000 APIs available, insurance companies have access to less than 10% of that

• Only 35% of employers have access to API-enabled data exchange

Sources: PwC, Guardian, Accenture, Deloitte, LIMRA, PwC, Highwing, and LIMRA

The broker role is expanding to add new value

While brokers have long been trusted advisors for employers, their role is rapidly evolving. In addition to matching policies with workforces, brokers are now tasked with helping HR teams with choosing technology, administering plans, boosting utilization, and figuring out how to work additional benefits into packages. Brokers are now bringing added value in helping employers get more out of their investments and by surfacing gaps in the marketplace.

• 46% of all employers and 67% of those that have more than 100 employees expect to rely on their brokers more in five years than they do today

• Employers are most likely to want brokers to be responsible for benefits education (36%) and decision support (39%)

• While 74% of consumers are happy receiving computer-generated advice, 2/3 still want human interaction when dealing with complex needs and complaints.

Sources: LIMRA and Forbes

Employers want efficiency and convenience

One lesson employers learned from the last few years is that every workflow where automation can remove human error should be remediated with software. No wonder digital benefits solutions continue to be attractive investments, especially for modern employers eager to ditch paper-based systems. For younger workers, it’s especially important that an employer’s tools reflect a tech-forward approach. We expect this trend to shape the next generation of benefits software which will prioritize ease and simplicity over legacy and price.

• 50% of brokers cite nonmedical products as a key unmet need for employers and employees

• 66% of employers report their systems are more digital than paper-based

• 75% of employers are using digital platforms to manage benefits enrollment, up 24% in the last 3 years

• 88% of employers believe they understand the needs of employees, yet only 40% of employees believe their employers understand their needs “very well”

• A highly digital benefits experience increases employee satisfaction by 89%

Sources: LIMRA and Guardian

Employees still struggle to understand and use their benefits

The need for accessible and adaptable care became a top priority during the pandemic. But although the rise of telehealth and medical apps somewhat met this need, two major pain points persist for consumers: accessibility and customization of benefits experiences. A rising cohort of consumer solutions are meeting this gap, but there’s still time for established players to get serious about offering more dynamic, personalized benefits and seamless distribution.

• 47% of gig workers say that “lack of access to traditional benefits” is one of the top challenges of gig work

• 53% of employees say their employers don’t communicate well about their health benefits

• 70% of employees feel that today’s healthcare system is difficult to navigate

Sources: LIMRA and MaestroHealth

Ecosystems are the next big opportunity

Despite the rising costs of healthcare and impacts of inflation, the outlook for employee benefits is bright. With massive growth being projected for the market over the next decade and companies having much to gain by opting for digital insurance offerings, big opportunities abound within existing products and new. One of the more exciting possibilities on the horizon? Insurance ecosystems, e.g. integrated networks offering interconnected services.

• Digital insurance ecosystems could encompass $60 trillion in revenue by 2030

• Benefits ecosystems increase products per customer from 1.5 to 2.5/3.0 within 24-36 months

• Embedded insurance market value is expected to grow to $70B by 2025

• $70 billion revenue opportunity from greater levels of participation with existing insurance products alone

• The payoffs for valued, great customer experiences are tangible: up to a 16% price premium on products and services

• Since 2012, insurtech funding has grown at 64% CAGR, accelerating sharply in 2020 and 2021.

• Insurtech funding for the General Health Care category accounted for about 69% of total funding, up 600% from 2020.

Sources: McKinsey, Ernst & Young, LIMRA, PwC, and BcG Fintech Control Tower

Data management is key to success

All of these findings point to one central truth — better data leads to better benefits products and software. The current technology behind group benefits keeps important data trapped in silos and antiquated infrastructure. Noyo is the only data platform built for the modern employee benefits experience. Our API technology connects benefits software and HR platforms to insurance carriers, setting a new standard for speed, accuracy, and transparency across every step of benefits administration.

Here’s what our customers have achieved with Noyo:

• Eliminating file-based work entirely and reducing administrative costs by 85%.

• Activating group coverage and processing enrollments in days.

• Programmatically auditing data for errors and keeping it in sync across connected partners.

Curious what powerful automation and clean, trusted data can do for you? Reach out to our team for a demo today!