The Long-term Care (LTC) insurance market brings to the fore a reality of challenges and significant opportunities. On the one hand, the overall market has steadily grown and is projected to grow further. On the other hand, the traditional LTC insurance market continues to decline, as rates increase and consumers shy away from purchasing policies. In the U.S., the sale of traditional LTC insurance policies slid from 750,000 in 2000 to a mere 70,000 in 2017. Little wonder that there has been a steady decline in the number of LTC players.
Insurance companies have been struggling to price risks accurately or profitably, and drive cost-effectiveness in managing new regulatory norms (leading to repeated rate hikes on existing policies). By partnering with Business Process Management (BPM) companies, insurers can plug the gaps in operating inefficiencies and profitably address the challenges.
Here are three ways that BPM organizations can unlock value for LTC insurers.
1. Integrated Technology Ecosystems
The extensive experience that BPM companies have in application processing, policy administration, and claims and care management enables them to deliver the right outcomes for LTC insurers. By leveraging an integrated technology ecosystem driven by automation, analytics and artificial intelligence, BPM companies can deliver value in the area of risk adjustment to address critical outcomes of revenue impact, cost savings and customer experience. This value encompasses:
Access to actionable data: Deploying analytics to combine socio-economic claims and medical data to create action plans for outreach, interventions and financial support
Platform-based support: Delivered through a combination of automation software, care management and communications platforms, analytical tools, predictive modeling, mobility and telehealth systems
Such integrated ecosystems can provide insurers the scalable policy administration platform they are seeking to enhance consumer experience at reduced costs.
2. New Hybrid Products and Solutions
An upside of the decline in traditional LTC insurance business has been the rise of newer options in combining universal life insurance with long-term care protection. Such hybrid LTC policies provide the certainty of rate guarantees and the flexibility to have premium dollars returned in case of death or change of plans. Combination products also offer longer-duration payment periods including five-year pay, 10-year pay and lifetime pay. BPM companies can lend efficacy in designing the right solutions and processes, new product launches and product enhancements around hybrid solutions.
3. End-to-End LTC Management
BPM players have the combined advantage of domain expertise and process excellence to aggregate LTC operations into a common platform. This helps address the challenges of product performance, risk assessment and management, distribution, operational inefficiencies and capital requirements.
The synergies of domain, process and technology can help insurers drive rapid scalability and achieve significant time and cost savings. By harnessing the power of intelligent analytics and reporting, BPM partners can visualize and provide actionable insights with the right business metrics. In addition, efficient valuation and modeling processes can be designed for end-to-end auditability and governance.
Undoubtedly, BPM partnerships can be a huge boost to LTC insurers looking to take advantage of an expanding landscape of possibilities. It encompasses pragmatic options for reducing risks on all fronts – be it in estimation, processes, or talent skills and availability. More importantly, it can provide the necessary technology expertise to enable digital transformation and unlock sustainable value for LTC companies.