Should you switch to a single insurer?

A look at the best approach for – and pros and cons of – streamlining the process

HR professionals juggle a substantial number of responsibilities, from recruiting, training, compensation and benefits to the company retirement plan. So it’s only natural to look for efficiencies in how they manage their company’s HR programs.

Insurance companies often offer a variety of programs for plan sponsors that can include health and dental, life insurance, disability benefits, accidental death and dismemberment, group retirement services, as well as wellness programs and plan member communications services. For the most part, employers take an independent approach in evaluating the best providers for each.  

Often, the same insurer is brought onboard to manage all the various group benefits and group retirement needs for an organization. Other times, a number of different carriers may be involved. So, what is the best approach? What are the benefits of having a single carrier? Are there any risks?

The short answer is it’s complicated. It depends on an organization’s priorities and how the plan fits strategically into the total compensation picture —because if cost is a priority, decisions will be different than if the employee experience is the top priority. 

The answer also depends on whose perspective is being considered. The plan sponsor and plan member have different needs and objectives for their plans.

The benefits
Here are some of the benefits to rolling up benefits and retirement programs under one carrier:

Cost: For some organizations, this is an important consideration that can play a significant role in the decisions they make. By having the health and dental plan, life, accidental death and dismemberment (AD&D), disability and retirement services with the same carrier, there are opportunities for negotiating financial advantages for an organization, such as incentives or a potential reduction in expenses.

Administration: One of the benefits of working with one carrier is the administration can be simpler. Plan administrators may find it easier to work with one insurer across all benefits and retirement, with an ability to more effectively navigate the insurer’s organization, and deal with a common system, terminology and processes.

The employee experience: This is possibly the most significant benefit to having a single carrier to deal with. For example, many employees may not distinguish between which insurer is managing their paramedical benefits from which is managing their retirement. 

If they call the wrong insurer, the call centre will have no real ability to transfer them or assist in any way if the retirement plan is with another company, and this can lead to frustration and time wasted. In addition, many carriers offer a single sign-on experience for plan members to be able to access both their retirement and benefit information. For the most part, these are still separate sites, but having separate log-in credentials has been addressed by the majority of insurers. Generally speaking, featuring one provider for both services creates a more cohesive experience for employees.

The risks
While there are benefits to operating with one insurer, this approach is not without risks. 

Over the past decade, the financial landscape across the country has been witness to substantial merger and acquisition activity, and with this comes the real possibility that an employer’s carrier may be involved in one of these transactions. If it has a consolidated plan with one insurance company that is involved in a transaction, then it has various group benefits as well as the group retirement plan to think about. 

System changes and customer service can impact both benefits and retirement platforms under this scenario. The situation becomes more complicated if there might be another insurer involved with AD&D, life or long-term disability.

If a situation arises that requires making a change, it becomes more challenging to switch carriers if an employer is looking to preserve the idea of having a single insurer for its platform. 

The opportunity
Although there are some clear benefits to amalgamating benefits and retirement plans under one carrier, the reality is most insurance companies still operate with their benefits and retirement divisions in silos, including the account servicing teams and plan member experience.

This is the area where the concept of offering a truly integrated solution can gain great traction. 

For example, although single sign-on has become a reality for most carriers, the online experience for plan members is still divided between two separate sites for their health and dental, and their group retirement.Better integration between the sites will pave the way for a more holistic experience and increased loyalty.

Another area of opportunity exists on the account servicing end, where plan sponsors work with different representatives and divisions within the same insurance company. Employers that commit group benefits and group retirement platforms to one insurance platform deserve a single point of contact, perhaps in the form of an executive sponsor.
Increasingly, employers are evolving to integrate a more comprehensive and holistic compensation experience for employees. 

Employees’ paycheques come from the employer. Where do retirement statements come from? The drug card? Who do employees call about long-term disability? An important part of  employees’ experience with an organization comes in the form of direct contact with the insurers.  

A cohesive and integrated experience for plan sponsors, administrators and, ultimately, plan members, will lead to a stronger and more customer-centric employer brand, engendering loyalty and a long-term partnership.

Both at Accompass in Toronto, Judy Buckley is vice-president of benefits and health and Mark Dowdell is senior vice-president of investment and retirement. For more information, visit 

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