g2-pd implications of concentration in the group marketplace by: yves rouvès

G2-PD Implications of Concentration

in the Group Marketplace

By: Yves Rouvès

Impact of Concentration

• Importance of 3 aspects Service to insured personsService to plan

administratorCost

• Anything that disrupts any of these aspects will cause a problem to the employer

An Efficient Group Insurance Plan

• For the insuredEasy to understandEasy to use (claims process, internet, 1-800…)Pays the right benefitsWithin a reasonable time


• For the Plan AdministratorPays the right benefits to the right personsFor the right reasonsContracts / brochures up to dateChanges done quicklyConformity with the employer’s expectations (disability

management…)Transfer of information (interface…)BillingRespect of financial agreement


• At a Reasonable CostDirect costs (administration fees, premiums, …)Indirect costs (interface, communication with the

insured persons, communication with insurer…)


• For the Insured New brochures Change in Plan / Section number New points of contact (Internet, 1-800…, persons to contact,…) Change claims payment lag New forms Change in coverage (real or perceived) Follow-up on maximums (annual, lifetime…) Frustration and loss of time if the functionalities of the new system

are not the same as those that users are used to (even though the new system may be better overall)


• For the Plan Administrator Structure of contracts/sections Update to contracts/brochures New contact persons /phone numbers, fax numbers… Unavailability of contact persons (due to assignment to special

projects) Efforts/personnel of the insurer focused on the integration Change in information systems /software, validation of data Current projects are delayed / reported or timeframes are not met Increase in the volume of phone calls from the insured persons Cost of training admin personnel Increased risk of error if there is a change in systems Increased need for communication with the insurer Increased need for communication with the insured persons


• For the Plan Administrator…Standardisation is attractive for the insurer

– Bring administration provisions of various contracts on similar bases

Easier to manage for the insurer Potential problem if there is a conflict with the client’s

specific needs


• For the Plan Administrator…Opportunity for the trade unions to sneak into

the process– If the insurer has a reputation of being more

stringent in the claims adjudication process

– Opportunity for grievance if the problem situations are not settled in the same manner as with the former insurer (disability benefits, health & dental claims…)


ConclusionThe interests of the client seem minor among the real

reasons for a merger of insurersThe client is promised :

– A better capacity for delivering service– At a better cost

The client is delivered :– Increases in administration fees– Additional internal costs– Premium rates that are less competitive– Conditions (stop-loss, retention agreements, etc.) that are less

favourable

g2-pd implications of concentration in the group marketplace by: yves rouvès

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