Priority Order: Reducing the Complexity of Integrated Disability Insurance and Absence Management

If you fly frequently, like I do, you probably know most pre-flight safety demonstrations by heart. I could probably, if needed, stand at the front of the aisle and point to the exit doors on every aircraft that’s been flying in the last few decades. I could tell you (we could probably recite it together) that “if you are traveling with children or anyone needing assistance,” we should “put on our own masks first” if they happen to drop down in front of us.

As straightforward as these directions may seem, after hearing them hundreds of times over the years, I have found that there is a bit of wisdom in there that might be applied in a lot of situations. Sometimes we need to prioritize our own preparation first so that we can be prepared to help others. If we don’t set our priorities straight, we can lose the opportunity to be useful. The flip side is also true. If we prepare to be useful, we may get more opportunities than we ever imagined.

Last month, Majesco and Deloitte released a joint thought-leadership report, Raising the Competitive Bar: Simplifying the Operational Complexity of Disability Insurance and Absence Management. It is the story of what insurers stand to gain if they begin by preparing themselves first. It is truly compelling. Employers have a real need right now and insurers are the right ones to step in and serve them.

Opportunity stymied by complexity

Recent regulatory trends and market circumstances have created a “pressure cooker” issue within corporations regarding disability and family leave. Most are unprepared or underprepared. They are needing assistance in learning about and dealing with the changes. Many insurers would like to fill this gap. Those insurers who are prepared to administer their customers’ Disability Insurance and Absence on an integrated, seamless basis, are well poised to capitalize on the growing market demand. The problem is that many insurers are stymied by their own internal structures, talent shortages, and technology issues. The opportunity could easily be lost before it can be taken advantage of.

In today’s blog, we will look at the pressures across a few dimensions of Disability Insurance and Absence Management, searching for answers on how to:

  • Reduce the complexity of regulation and administration.
  • Reduce the complexity of the user/customer experience.
  • Reduce knowledge pressure placed on internal resources.
  • Reduce inefficiencies through operating model changes.

What changed to create this opportunity?

At a high level, people, talent, regulation, and expense structures are all in the midst of a shift. Employers are being forced to reexamine their approach to Disability Insurance and Absence Management in light of the shift. State and federal regulations are growing more and more complex. The increased prevalence of remote work and a new focus on improving employee experience add wrinkles to traditional disability and absence policies. At the same time, the continued expansion of businesses and the growing scrutiny of organizational expense structures are challenging employers to lower their operational risk.

How can insurers reduce the complexity of regulation for employers?

While variations of insurance regulations across state boundaries are nothing new, the differences between states continue to grow. To date, 11 states offer paid family leave, and 16 states require paid sick leave, with all these states offering their own variation of regulations and requirements. As more states enact additional legislation, the complexity of employing individuals across state boundaries will only continue to grow.

With over 25% of all professional jobs becoming remote by the end of 2022[i], remote work can no longer be considered a temporary aberration. The impact of remote work continues to force the evolution of existing processes and procedures to match the current times. A recent study by Upwork found that almost 19 million are planning on moving due to the geographic freedom created by their remote work opportunities.[ii]

With insurance being issued on a state-based level, organizations are required to understand how to issue coverage in an employee’s resident state and ensure proper coverage and alignment with state regulations. Additionally, organizations who were previously unconcerned about regulation changes occurring outside of their domiciled state, now find themselves burdened with those same changes.

Employers will need significant, unplanned investment to fund and administer disability and absence management. At the same time, employees are demanding a seamless digital experience across product offerings and economy-related pressures are hastening internal efforts to find any and all cost efficiencies.

Outsourcing disability and absence management administration is a viable avenue for employers to decrease costs, improve the employee experience, and reduce the compliance burden. Market demand is creating an opportunity area for insurers to solidify themselves as market experts. The ever-changing regulatory landscape, however, creates compliance and operational complexity that often adds cost and degrades service levels. Even insurers with great expertise are likely to need assistance in capitalizing on the opportunity at hand.

Regulation and compliance are perfect areas for the application of insurance technology. The details that are so difficult for people to keep track of (the myriad of changes and rules), insurance technology can manage. Employers want the certainty of remaining in compliance. Insurers who implement smart systems, built for automation and data management, can assist employers by creating platforms for compliance that unify and streamline tracking across borders, services, and product types. This type of assistance creates brand loyalty. It’s worth the effort.

Does Disability Insurance and Absence Management require the same kinds of digital user experience as elsewhere? These are specialized products.

Reducing the complexity of the user and customer experience is just as crucial in Disability and Absence products as anywhere else in insurance. In this area, however, insurers must also consider their internal users as internal customers. It is the overall workflow between all parties (internal admin user, employer customer, employee user) that makes digital experiences a competitive game-changer. 

Insurers realize that absence is a complicated product with the potential to enable stickier business and cross-selling opportunities, but carriers must automate their operations to deliver it profitably. Further, due to the effect of big tech, employers and employees desire simplified digital solutions that reduce confusion and eliminate the need to engage with multiple tools. Often these digital experiences leverage external data and resources to further increase the stickiness of their experiences, but the most significant value proposition is for the single simple interface to manage a complex set of product offerings.


“…the most significant value proposition is for the single simple interface to manage a complex set of product offerings.”

Digital service and unified interfaces are a first-priority issue for insurers. If insurers can begin with a holistic view of customer service and chart a course for simplicity, each step will bring them closer to meeting employer needs.

How will insurers meet the rising challenge of talent, knowledge, and expertise in a tight labor market?

The growing complexity of product offerings is, in part, due to demand changes within the market. For example, the demand for Disability products is shifting toward Paid Family Leave. As with any product offering shift to a newer product, there is an inherent risk for higher than anticipated claim costs. Long-Term Care was an example of this. Insurers will have to closely monitor these costs as the product offering becomes more popular to ensure it remains profitable. However, finding appropriately skilled employees to monitor these costs is becoming a growing concern. In fact, finding skilled employees that truly understand all of the products and their various nuances is a challenge to the opportunity of serving employers.

While not unique to the insurance industry, carriers are feeling the pressures of a historically tight labor market within an aging industry. As workers leave organizations, whether, through retirement or different opportunities, they are taking institutional knowledge and experience with legacy processes with them out the door. These conditions have forced historically traditional hiring practices to change, with insurers now embracing remote workers and formalizing alternative methods of filling their talent funnels, such as leveraging internal mobility.

The answer lies in an operational model change, which includes rethinking how and where knowledge resides, in addition to how it is applied.

Artificial Intelligence/Machine Learning (AI/ML) provides the ideal competitive advantage that insurers need to continue to overcome the talent challenges and knowledge complexity facing the industry. As processes are standardized and products are simplified, leveraging AI/ML is no longer a nice to have, it’s a requirement. Laying AI/ML on top of computer vision for unstructured, semi-structured, and structured documents can enable insurers to intelligently automate processes that previously would require dedicated human interaction. Now employees are enabled, through a symbiotic relationship with AI/ML, to focus on higher value and more complex activities, further increasing organizational productivity and enhancing the customer experience.

In order to capture the opportunity, insurers will need to prioritize and tackle two looming internal issues.

  • They must prioritize and develop a solid strategy for acquiring the necessary skillsets.
  • Their overall business operating models need to evolve to mitigate cost overruns.

The historical mindset of insurers competing against other financial service industry companies within their geographic vicinity for talent is no longer relevant to the current times. The skills insurance companies require are highly coveted by companies across industries, from big tech to manufacturing, and across the nation, from Maine to Hawaii. Insurers must rethink their approach to the hiring and retention of these modern business and technology skillsets and consider policies to allow them to compete for highly sought-after skills in a tough labor market.

A shift in the talent pool is enhanced by the introduction of new business operating models. New talent is unconstrained by the way things are “traditionally” done. New talent often thrives on finding efficiencies and cost savings. The issues of talent and business model are tightly related to carrier innovation, topics we have covered in some of Majesco’s recent innovation-focused webinars.

Prioritizing the Disability Insurance and Absence Management operating model

The issues are as complex as ever, but they will only get more complex. We are only seeing the tip of the legislation iceberg and the beginnings of geographic employee population shifts. Now is the time to move. 

The technology exists to help insurers conquer the issues and create a helpful environment for employers of all shapes and sizes. Between the complexity and the technology, there is a potential bridge — operating model change. In our next Disability and Absence blog, we’ll look closely at what operating model evolution can do to bring simplicity and value to the process. We’ll also look at how business and technology can be the building blocks of an employee benefits ecosystem that will allow insurers to capture the flood of employer business.  

For a deeper dive into the road to opportunity, be sure to read, Raising the Competitive Bar: Simplifying the Operational Complexity of Disability Insurance and Absence Management.

[i] “25% of all professional jobs in North America will be remote by end of next year,” Ladders, December 7, 2021,

[ii] Ozimek, Adam, “The New Geography of Remote Work,” Upwork,

About the author

Author Denise Garth

Denise Garth is Chief Strategy Officer responsible for leading marketing, industry relations and innovation in support of Majesco’s client centric strategy, working closely with Majesco customers, partners and the industry.