The Benefits of Group Insurance CPQ

There are a lot of articles discussing how the group insurance industry can benefit greatly from incorporating CPQ software within the sales environment. The general consensus is that the slow adoption is a result of insurance firms doing what they have always done – relying on the adage, “if it isn’t broken, why fix it?”

The process may not be broken per se, but it is unwieldy and ripe for improvement. However, because it’s an area that most firms don’t even believe can be optimized, few firms have kept track of the time spent on turning around quotes for their clients, preparing sales presentations, and preparing census submissions. When we’ve (pointedly) asked, many top-level executives and brokers aren’t sure how much time they and their Account Managers are really spending on a per-client basis.

Establishing a Baseline

Maybe you already see the problem – how can you measure the increased efficiencies that Group Insurance CPQ brings if there’s no baseline data to measure from? The problem is circular – with no baseline, it’s difficult to prove ROI, and without proof of ROI, the industry remains slow to adopt. 

Having worked in the industry, we knew first-hand that there was a opportunity for improvement – and we set out to put real numbers to the problem. Over the last year, we’ve surveyed a combined total of over 100 health insurance brokers to see how much time they were spending on their quoting process. At first, many teams insisted that quote turnaround took at most an hour – but we knew that wasn’t right. When we went back and asked those same firms to consider all of the steps they went through to prepare a quote from RFP to sales presentation, a different picture emerged.

Take a look for yourself at the survey results below:

RFP & Sales Presentation: Time Spent

Average Total RFP to Decision Time
Client Size (# of employees)< 50 Ees50 – 250250+
Pre-Renewal/Sales Planning Meeting0.501.001.00
Prepare and Send RFP to reps0.250.500.50
Get quotes from carrier sites0.5000
Reply to rep questions0.501.001.00
Follow up to get quotes0.380.751.00
Open carrier quotes and save to drive0.250.250.25
Review carrier quotes0.501.001.50
Spreadsheet quotes1.002.002.50
Quality review0.500.751.00
Spreadsheet adjustments0.250.500.50
Set meeting0.150.150.15
Post Presentation
Question follow up and responses0.250.250.34
Spreadsheet adjustments0.400.500.75
Review with client0.250.500.75
Total Time Per Client6.6810.1512.74
Spreadsheet Time4.537.259.00

Increased Efficiencies

So, there’s the data we’ve been able to collect – and it confirms what we already knew. The process is inefficient. The larger the employer group, the more time is needed to put together a presentation. These firms are spending up to nine hours on processes that Group Insurance CPQ could do in a fraction of the time. On top of the increased time spent for larger employer groups, with the current manual process there’s also the opposite problem for small clients. The heavy manual data entry demands can require teams to spend the same amount of time on a 3 employee client as a 30 employee client.

Now the million-dollar question is, how does that time spend compare to the same processes using Group Insurance CPQ? Based on our experience, the average renewal (dual/triple option Medical, Dental, Vision, Basic Life and LTD) takes less than two hours of data import, analysis, plan selection and structuring to prepare for a presentation. That’s anywhere from a 50% to 78% reduction in time spent, depending on the size of your employer groups. 

What about the smaller clients that don’t generate much revenue? Group Insurance CPQ includes options that allow teams to spend less time on them as well. For example, the PerfectQuote platform enables firms to send links to these lower revenue-generating clients so that they can  either self-renew, or select ‘Favorite’ plans they’d like you to include in the presentation. Both options will assist in generating greater efficiencies in managing your book of business.

To better determine how much time you’re spending (and whether Group Insurance CPQ will add efficiency to your processes), think about all the steps in the process and how much time you and your teams are spending on each for your average client. Consider all the steps – like preparing RFPs, getting quotes from carrier sites, replying to rep questions, uploading the carrier quotes, reviewing the quotes, spreadsheeting the quotes, spreadsheet quality review, any post-presentation adjustments needed after the client meeting. Add all that up, and you’ll have a better understanding of how much time you’re spending, and how much ROI you can expect to see from implementing Group Insurance CPQ. 

The Difference in Platforms: Small Group vs. All Group

Many Group Insurance CPQs on the market have focused on the Small Group (ACA) market, where there is already some standardization of product and pricing, and there are some clear advantages to that. However, unless the bulk of your business is stand-alone ACA medical plans, this can’t be considered a complete CPQ solution, and unfortunately, it’s given firms the impression that CPQ as a whole isn’t for large enterprise firms. 

Group Insurance CPQ products like PerfectQuote deliver a broader experience beyond a standardized product, including Mid/Large Group Medical, Dental, Vision, Life, LTD and STD regardless of group size. These features are necessary to realize the full potential of Group Insurance CPQ at the enterprise level.

Digitization Leads to Dynamic Decisions

One of the foundations of efficiency with Group Insurance CPQ is easy digitization of data. With an enterprise-level Group Insurance CPQ like PerfectQuote, users can extract plan data and rates from static carrier proposals (PDF, Word, Excel) and translate them to a standardized digital format using PerfectQuote technology (a combination of OCR and machine learning). This creates huge data efficiencies and opens up possibilities. Users can see the full realm of plan options and sort down to best in class/costs easily. 

Nowhere is this more advantageous than in a presentation, where all options can be explored in real time. If clients want to see a different contribution strategy, or explore other plan options, CPQ lets you do that in real time, without having to set up another meeting. This isn’t just timely, it’s a great way to build client trust. Because you can see all the options easily, you can be confident that you’d selected the right plans for your client before you walk into a meeting. And because you can pull up the plans you didn’t decide to present quickly, you can demonstrate why some options don’t fit their needs. 

Data digitization also leads to better data management, greater customer intimacy, and organizational effectiveness. We’ll explore all this in our next blog.