Group insurance refers to an insurance cover for a group of people. The group of people could be employees of a company, or members of a society or a professional association. Group insurance helps to reduce the concerns of adverse selection by creating a pool of people who are eligible to purchase insurance and who belong to that group for reasons other than just the wish to buy insurance – which might be because they are at a greater than average risk. Covering a group of individuals together gives insurers the ability to offer lower premiums because the risk arising as a result of insuring them is spread among a large group of individuals.
Group insurance may offer life insurance, health insurance or some other types of personal insurance.
The importance of Group Insurance
Group Insurance is one of the important ways through which companies provide for the health needs of their employees. In many countries, depending on the size of the business, it is also a requirement that is mandated by government regulations. Some of the key benefits of Group Insurance for companies are:
- It provides employees with a health insurance cover for themselves and their families in case of any medical emergencies.
- When companies cover health insurance for their employees, it increases savings in the hands of employees as they will not have to pay for expensive individual premiums nor for unforeseen medical emergencies that could result in heavy out-of-pocket expenses.
- As the risk is spread over the entire group, companies benefit from lower premiums as compared to individual plans.
- Companies are able to avail of tax saving benefits on group insurance plans. All the expenses incurred by the employer will be considered a business expenditure and will not be considered as profit that is liable to taxation.
- Group insurance is considered an important perk and helps to forge strong bonds between the employer and employees.
Advantages of Group Insurance
- Group insurance minimises absenteeism and facilitates a return to work as early as possible. Employees with group insurance are likely to be more productive as they take care of health concerns immediately and will need a less number of sick days.
- One of the hidden benefits of group insurance is that employees feel valued and appreciated. It fosters attraction and retention of employees as it leads to greater employee satisfaction and commitment.
- Group Insurance offers even newly added members the same kind of coverage as members who have been covered for many years. This often means that the first year and second year exclusions are waived for members of group insurance products.
- Even if the member of the group has to contribute some percentage of the premium, this is often deducted in instalments from the employee’s salary thereby reducing the burden of a one-time payout premium.
- It is possible to increase the coverage of group insurance by adding riders at a nominal premium. For instance, riders like critical illness and personal accident cover can be added to increase the overall coverage.
How Neutrinos helped its client develop a Group Insurance Policy
Faced with many challenges in the deployment, management and administration of its group insurance policy, one of Neutrinos’ clients approached it for assistance. Here is a brief on the challenges and what Neutrinos did to help its client benefit from the solution provided:
- Challenge: Digital transformation was needed for improved customer experience and growth in business
- Solution: A digital insurance portfolio with a one stop solution was created that caters to the customers bespoke digital insurance experience
- Benefit: Cutting edge digital experience with rich and interactive UI/UX driven applications meeting customer needs
- Challenge: Inflexibility of legacy systems prevented the insurer from keeping pace with the customers’ demands
- Solution: An application with an omni-channel digital interface across web and mobile platforms was created for multiple users
- Benefit: The build once-deploy across platforms approach ensured a seamless experience across web and mobile platforms
- Challenge: Poor data management as a result of massive unstructured data across backend systems and manual processes
- Solution: Completely Automated Data Sync capabilities driven by user behaviour and business need patterns
- Benefit: Structured data management capability across multiple backend systems
- Challenge: Poor integration resulting from lack of system connectivity and poor consolidation of data sources.
- Solution: A connected plug and play integration model with adaptive and secured architecture that met the need of the evolving industry dynamics
- Benefit: A connected plug and play integration model with adaptive and secured architecture that met the need of the evolving industry dynamics
- Challenge: High operational costs were preventing carriers from adapting to new customer requirements and optimizing their operations
- Solution: Operational efficiency was standardized by process automation designed to maximise productivity between systems and users
- Benefit: Operational transparency was streamlined at a reduced cost with increased productivity leading to improved operational efficiency
- Challenge: Inconsistent service delivery as a result of manual processes and missed opportunities
- Solution: Deployment of system driven activities coupled with process initiatives that drove tasks towards successful completion
- Benefit: An enterprise service transformation that leveraged connected interactions across multiple channels with multiple systems and services
- Challenge: Constantly increasing requirement of monitoring systems
- Solution: Creation of a robust dashboard and report management with a data driven solution framework for driving future strategic business goals
- Benefit: Development of enterprise business growth strategies driven by aggregated visual data and reporting structures
- Challenge: Low cross-sell opportunities highlighting the need for a data driven framework for new business opportunities
- Solution: Enabling newer marketing channels allowing for targeted marketing based on user profiles and activities for increased cross-sell opportunities
- Benefit: Low cost marketing methodologies resulting in lead generation sources that are guided by smart user behaviour analysis
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