Group benefits insurers are still relying on spreadsheets, disconnected systems and the knowledge of a few experienced employees to make critical pricing decisions, according to Earnix, which warns that fragmented renewal processes are creating operational inefficiencies and exposing carriers to key-person risk.
Reflecting on discussions at the LIMRA Annual Conference in Grapevine, Texas, Earnix principal solutions consultant Trent Davis said he found that manual processes remained a persistent challenge for group benefits carriers, despite the industry’s growing focus on artificial intelligence, capital pressures and changing customer expectations.
Davis said he asked insurers: “How much of your renewal cycle is spent making the decision, and how much is spent finding what you need to make it?” The question highlighted a recurring problem: teams are spending substantial time locating, consolidating and validating information rather than evaluating pricing decisions.
Much of the knowledge needed to complete these processes sits with a small number of experienced employees who understand which files to use, whom to contact and why particular underwriting rules exist. While this institutional knowledge can keep operations running, it also creates a dependency on individuals. Retirement, staff departures or an acquisition that significantly expands a portfolio can expose the fragility of these arrangements.
The challenge is particularly pronounced among insurers that have grown through mergers and acquisitions. Different portfolios may operate under the same brand while retaining separate administration systems, underwriting practices and spreadsheets. Decision-making processes can also diverge from the parent organisation’s governance standards.
These differences can create inconsistent outcomes for brokers. Employers with similar profiles and the same product may receive different pricing decisions depending on which acquired portfolio handles their case. What appears to be a customer service issue can therefore reflect deeper problems with pricing consistency, governance and operational execution.
Renewal pricing brings these weaknesses into focus because it requires several functions to contribute information to a single decision. Actuarial teams provide pricing indications based on factors such as trend, credibility and the relationship between manual rates and claims experience. Claims teams supply performance data, while sales teams contribute broker relationships, employer context and competitive information. Underwriters then apply their judgement to exceptions and referral thresholds.
Although each input has a role, the information often resides in separate systems and must be assembled manually. By the time teams have gathered and checked the necessary data, they may have little time to evaluate the commercial implications of a proposed rate change. This can limit their ability to assess retention prospects for individual employers, weigh profitability against competitive pressures or determine how much flexibility exists within approved pricing guidelines.
Earnix argues that the problem is not a lack of data, but the inability to bring existing information together when decisions are made. Introducing artificial intelligence into fragmented processes without addressing those underlying issues could reinforce inconsistencies rather than improve outcomes. Models must also be versioned, explainable and auditable if they are to withstand internal model-risk assessments and regulatory scrutiny.
Rather than replacing existing core systems through costly, multi-year transformation programmes, Earnix advocates connecting the technology insurers already use. This involves linking data through application programming interfaces (APIs), bringing pricing models and underwriting rules into a governed environment, and automating workflows with approvals, version control and audit trails.
The approach is intended to help teams compare potential pricing actions before renewal offers are issued, while preserving the role of actuarial judgement. Actuaries establish the pricing indication, while the technology helps insurers identify an appropriate commercial decision within that indication and the carrier’s approved parameters.
Earnix recommends that group benefits insurers begin with renewal pricing because it offers a recurring process through which improvements can be measured. Cycle times, retention, rate adequacy and loss ratios provide indicators of progress, while the benefits can extend across actuarial, claims, underwriting and sales teams, as well as brokers and employers. Starting with renewals also allows insurers to test the value of a more connected approach without committing to a full core system replacement.
The wider challenge for group benefits carriers is to reduce the time spent chasing information and coordinating manual handoffs, giving teams more capacity to make informed decisions. As insurers consider how to modernise pricing and underwriting, Earnix argues that connecting data, decision-making and governance is essential to reducing manual work and improving renewal outcomes, while preserving the actuarial expertise that remains central to the process.
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