Are You Really Ready for “Robo-Advisors”?
Have you noticed lately all the talk and media coverage around AI (Artificial Intelligence) and how it is going to enhance our lives? Whether it is simply Siri or Alexa, Google Home, self-driving cars, robot coffee baristas, etc., we cannot seem to get enough. We appear to again be infatuated with the “space race” and everything that goes with it.
However, this time around there is also talk about AI taking over areas traditionally serviced by human beings, including the employee benefits industry. While there are not yet any actual “Robo-Advisors” in the employee benefits industry, to my knowledge, there is some speculation that, for example, the employee benefits quoting process could be replaced by AI-driven automated systems. There are already some related applications in our industry – take for example Sun Life’s “Ella”, where you can simply ask questions about your benefits plan. Could this be the beginning of the end for human contact and interaction? At ZLC Financial, we do not believe so.
I hate to be pessimistic but I am having flashbacks to the 1980s and the introduction of automated telephone services. You may recall that society, in general, was also initially infatuated with those services – you simply had to push numbers on the phone to get to where you needed to be without having to talk to someone. I doubt there are many of us who have anything positive to say any more about automated telephone services as we are often simply struggling now to press “0” to talk to a real person – and some automated telephone services have eliminated that option too!
Based on a recent survey of employee benefits clients at ZLC Financial, we found that our clients rated the “people side” of our business very high, using the following words to describe our Employee Benefits team: knowledgeable, experienced, insightful, friendly, personable, helpful, responsive, attentive, etc. I doubt you would ever hear those words come to mind when describing an AI-based service. We are very proud of these results at ZLC Financial and will not deviate away from our focus on personal relationships and service.
As well, we do not believe there is a role for AI or Robo-Advisors in some other areas of our business. Many insurers or advisors have already looked to automate, for example, the process for quoting on employee benefits plans when they are taken to market for competitive quotes. The process of collecting and summarizing quotes from various insurers is very different from assessing and validating those quotes. At ZLC Financial, we always critique these quotes to separate any short-term marketing discounts from sustainable savings and ensure there is transparency for our clients around what savings may unwind at future renewals. We also challenge underwriting assumptions used by insurers that may be based on “quick factors” rather than a proper underwriting analysis to ensure quotes are applicable for our clients’ plans and their distinct employee populations.
There is certainly a role for Artificial Intelligence where machines can learn mundane and repetitive tasks. I have no doubt that Alexa will always be able to tell me what the population of Mongolia is, when I need to know that, or that Siri could provide me with a recipe for a great chocolate cake, if I were ever to bake one. And Sun Life’s Ella can tell me things like whether my benefits claim has been processed, which is simply information that is currently available online or via their App. However, we believe that the broader complexities of employee benefits and the services of good employee benefits advisors do not lend themselves well to AI-based technology.
A large part of our business as Advisors is focused on helping our clients with various problems, including claims, administration and services issues. In fact, close to one-third of our Employee Benefits team members are dedicated specialists focusing on these areas. Problems that arise with our clients are certainly unique and they expect customized solutions, so we do not believe they can likely be learned by a machine. Our clients expect us to be their intermediary and sit between them and the ever-changing insurance industry, providing them with assurance that they have the best solution at the best cost. Any automated solutions direct from insurers using AI would run unchallenged.
At ZLC Financial, we will continue to focus on people – our clients and their employees – and their needs. We will leverage technology wherever it makes sense to enhance our client’s experience but we will not rely on it to simply enhance profitability. We will also not sit by and allow the insurance industry to run unchallenged without any audit of the reasonability or sustainability of the quotes that they provide to benefits plan sponsors. Each organization’s needs are unique and warrant a customized solution. We would be pleased to discuss your specific situation with you to identify the best strategy with respect to your employee benefits program. Should you have any questions on the above, please don’t hesitate to contact me or a member of our team.
At ZLC Financial we are one of the fastest-growing employee benefits advisors in Western Canada and we are fortunate to have the best people, resources and clients. We provide value to you by leveraging one of the most skilled benefits teams – collectively almost 300 years of experience within our team of 16 employee benefits specialists. We have been working with businesses ranging from 3 to over 70,000 plan members for over 30 years. Visit our Employee Benefits Page to learn more about our benefits plans.
By Dan Eisner
This information is designed to educate and inform you of strategies and products currently available. As each individual’s circumstances differ, it is important to review the suitability of these concepts for your particular needs with a qualified advisor.