Its recent integration of employee benefits business lines into one group will let AIG American General Life Cos., a Houston subsidiary of New York’s American International Group Inc., offer employer-funded and employee-paid benefits on a single platform, according to AIG executives.
AIG American General, the domestic life insurance arm of the giant New York insurer, said last week that it had merged the group benefits, group work site, and individual work site business lines into a single unit called AIG Employee Benefit Solutions. The new unit focuses on the small- and midsize-business sector.
Employee benefits companies generally concentrate on selling either benefits that are subsidized by the employer or benefits that employees pay for themselves, said Chris Calos, an executive vice president at AIG Employee Benefit Solutions. Few companies offer both types of product on the same platform, he said.
“Those worlds are coming together,” he said. Brokers and their clients want to be able to go to one source or one company that offers a broad array of products, including both employer-paid and employee-paid options, he said.
In many cases, employers who approach a benefits firm do not initially know which benefits to pay for and which to leave voluntary, Mr. Calos said. And companies often alter their benefits coverage as their financial situations change.
“They may need to dial up or dial down the coverage depending on what benefits the employer can afford at a given time,” he said. “Being able to go to one company is certainly a benefit. … Firms offer bits and pieces of what we have in the marketplace, but no one brings the breadth of portfolio solutions to the marketplace [that] we do.”
Under the AIG Employee Benefit Solutions umbrella, AIG will be able to offer both group and individual insurance products to employers and brokers, said Michael Witwer, a senior vice president in the group. The single platform will make it easier for employees to understand their benefits options, he said.
“From a consumer standpoint, the individual employee does not care a whole lot about what the products are called in the marketplace and whether they’re group or individual,” he said in a statement. “All they’re concerned about is how much they’re paying for it through payroll deduction and whether it meets their needs. Our advantage is that we’re able to offer solutions to both sides of the house.”
AIG is in partnership with Tampa-based HealthPlan Services Inc., a third-party administrator and affiliate of the Boca Raton, Fla., private equity firm Sun Capital Partners Inc., to supply sales support and customer services for the employee benefits platform. Working with HealthPlan Services enabled AIG to bring the consolidated platform to market more quickly than it could have if it had to develop the back-end technology itself, Mr. Calos said.
“We could have gone with the ‘big box’ solution of buying a system and integrating it into our business, but the market demands and needs were such that we wanted to get out there quickly into the marketplace with proven technology,” he said.
Through HealthPlan Services, AIG offers its employee benefits customers access to multiple product quotes, electronic enrollment, automated underwriting and renewals, and the ability to combine all products on one bill. HealthPlan also offers online policy administration for employers.
