What is CPQ?

While you may not have heard the term CPQ, if you’re in sales, chances are it’s part of your DNA. CPQ (or Configure – Price – Quote) refers to the processes performed every day by sales teams in industries that involve highly customizable products – think order submission, data analysis, and proposal creation. Group Insurance CPQ is part of a larger movement to turn these complex sales processes into a highly optimized and efficient part of the business. 

CPQ software is designed to streamline and automate these complicated processes – so that companies can get to “yes” faster. There’s been a dramatic shift over the last 15 years to more dynamic and powerful web-based software solutions with simplified user experiences. Recently a new breed of sales optimization tools has been introduced to address the needs of historically tech-adverse industries that require high customization touch points. From jet engines to custom catering vans, today’s sales teams are using CPQ software to streamline their sales process and provide pricing in a fraction of the time it used to take. 

A Long-standing Need

Group Insurance CPQ for commercial health insurance has been a need for a long time, but it’s only within the last few years that platforms have begun to emerge. SalesForce even wrote about this back in 2019 – providing a solution that unfortunately didn’t quite address the underlying issues around getting and analyzing quotes. It’s taken the involvement of brokers who know the industry to identify the pain points and develop solutions that address the core inefficiencies in a meaningful way. 

Commercial health insurance is the epitome of complicated quoting. Employers seeking health insurance options are required to go through licensed insurance brokers to get coverage. Employers submit census data to the broker, who then searches the plethora of healthcare options available to provide the employer with the best options for their employees. The broker then must compile all the different lines of coverage available (often sent in different formats), eliminate any that don’t meet the employer’s needs, and present the best options to the employer to make a selection. It’s not as simple as just providing a single quote – brokers must continually demonstrate their knowledge of available carriers and current lines of coverage each year at renewal.

How Group Insurance CPQ Works

Group Insurance CPQ is software that automates the most time-consuming, strenuous parts of this process. Here’s how it works: 

  • Users (a broker, benefits specialist or account manager at the brokerage firm) upload census or plan data from the employer group into the Group Insurance CPQ platform.
  • From there, they can quickly search through the available lines of coverage that meet the employer’s needs. 
  • Users can also search the full array of ancillary products from the nation’s most trusted carriers.       
  • They can also upload carrier proposals from large carriers (regardless of the format) so that these plans can be compared alongside the rest of the available plans.
  • Then, brokers work their magic, selecting the best plans for their clients and removing plans that don’t fit their needs to configure the quote.
  • Finally, the Group Insurance CPQ software creates a final deliverable – the actual quotes that the broker will deliver to the employer so that the employer can compare their options and make a selection.

Key Advantages

Many of the advantages of Group Insurance CPQ should be obvious – they make a tedious, time-intensive process much quicker and easier for the brokerage firm – and for the employers seeking coverage. But the knock-on effects of these improvements are considerable. Shorter sales cycles can turn into more productive brokers, who end up bringing in more revenue for the firm (and themselves). Because most renewals happen during Q3 and Q4, during “renewal season,” CPQ software can prevent the usual overtime, temporary hires, and additional expenses that come with the season by empowering existing account managers to quickly turn around quotes. And the ability to adjust a plan design on-the-fly during a sales meeting is a surefire way to impress an employer used to lengthy turnarounds. 

Among a host of other things, Group Insurance CPQ greatly reduces data entry errors. The current model requires taking data from a variety of sources and converting them into a standardized format so that they can be compared – and any process that requires this level of data entry is prone to human error. CPQ software eliminates these errors by pulling data in multiple ways, including an API and carrier provided quotes – all but eliminating the potential for human error and the time-intensive review process that comes with it. The benefits here become even more apparent when we consider potential costs associated with errors and omissions.

The Future of Insurance Presentations?

Unlike the manufacturing industry, where a quote may be broken down into line items, there are a variety of details an employer needs to help them make a decision about which plan to choose. Traditionally, these quotes have been done with spreadsheets, and since some employers may prefer this, Group Insurance CPQ platforms allow quote delivery in this standard Excel format. But they also provide the ability to deliver a presentation from the software directly, in an intuitive format that has more similarities with online retail. This presentation style also allows brokers to make adjustments to the quote – like carriers presented, census changes, contribution strategy modeling, last minute carrier discounting – immediately, without having to go back to their Benefits Specialist to re-work the numbers. This type of presentation may not work for all employers – but it’s easy to see based on how other industries have evolved that this may quickly become the new normal. 

How Group Insurance CPQ is Changing the Industry

Group Insurance CPQ software is still relatively new. Many available CPQ platforms only cover ACA offerings and may not  provide support for ancillary lines of coverage. However, others like PerfectQuote are providing value by offering a single solution that allows for the inclusion of all lines of coverage in a single platform. There are considerable advantages to Group Insurance CPQ and the additional positive impacts to ‘business as usual’ are still being explored. Beyond the obvious efficiencies, a couple that come to mind immediately are employee satisfaction – Account Managers and Benefits Specialists doing what they are qualified to do rather than data entry, and the ability for brokers to be more “customer intimate” – spending more time engaging with customers rather than spreadsheets. As the technology is utilized more and more, the quick turnaround and easy-to-read presentation capabilities provided by Group Insurance CPQ software may become the expectation rather than the exception. There’s tremendous promise with what we’ve already discovered – and we can’t wait to see what the future holds for brokerage firms utilizing Group Insurance CPQ.