Zenefits, an online insurance broker and general HR platform provider that was launched in 2013 with the goal of harnessing technology to become a comprehensive HR partner for employers. Beyond their nice front-end platform design, Zenefits is reimagining what it means to be an insurance broker through the use of digital technology.
what is an insurance broker and why do I need one
Broadly speaking, the value of the insurance broker is to help clients (either individuals or corporations) select and implement insurance policies. Essentially, an insurance broker serves as a third party intermediary between the insurance company and the end consumer.
consumer calls broker ⇒ broker gets quotes from insurers & presents to consumer ⇒ consumer buys insurance ⇒ broker processes paperwork
The broker’s value to the consumer: The broker uses knowledge of the industry and leverages partnerships with insurance companies to get you the coverage you need, taking advantage of key discounts you may not have uncovered on your own. They do all the work! You just sign the line and you’re all set up, and if you have any questions about coverage going forward you can just call them up and ask.
How the broker gets paid: The broker likely works with a handful of preferred insurers, and may even have a quota of business to cede to a provider in order to be paid their commission. The broker will get paid by the insurer based on the business it brings to them.  Traditional brokerage firms rely on personal contacts (that means in-person / phone conversations) with benefits managers. The more customer relationships, the more insurance companies want to work with them, and vice versa. When asked about Zenefit’s digital-based value proposition, one traditionally employed insurance broker suggested that “Zenefits will never have the personal relationships with employers that is the key to success in the industry.” 
the role of technology
Instead of full out rejecting the role of relationships in building partnerships with employers, Zenefits has leveraged and built out digital solutions that enhance each aspect of their business model.
Client acquisition / service: Operationally speaking, insurance brokerage firms must be licensed on a state-by-state basis to sell policies to residents. For traditional brokerage firms, this means having to physically move teams of insurance brokers (often highly skilled, specialized hires) to where the business is. By taking this whole model online, Zenefits turned that process on its head. Zenefits is licensed in all states, but doesn’t need to pay agents to travel to maintain customer relationships – they do it all through their comprehensive digital platform! 
Helping choose the policy: through Zenefits’ platform, employers (and in turn, their employees) can compare policy options side by side and access a variety of resources from the all-inclusive portal. Zenefits answers the questions, takes their information, and sources the policies through their software – meaning no paperwork for the employer to fill out and process.
Customizable apps for desktop and mobile: Zenefits manages all of a company’s insurance needs like a traditional broker would, but they do it online. They also have built out a user-friendly tool that helps employers track and manage their policies. With apps like an in-network provider map, Zenefit can help employers choose health insurers that offer coverage where their employees can access it.
There are many additional features built into the Zenefits package, each accompanied by a user-friendly digital platform to manage the logistics of employee HR processes like insurance. Have they thought of everything?
some ideas going forward
- According to IBIS, the percentage of services conducted online is expected to increase from 8.4% in 2011 to 10.0% in 2016.  With insurance companies building out their own user-friendly platforms, the broker is at risk of being disintermediated. To address this, Zenefits can establish additional benefits beyond just sourcing policies for employers. Perhaps they could develop a tool that can perform a comprehensive risk analysis (from an HR perspective) for a company.
- As the insurance industry continues to evolve, Zenefits could use its accumulated data to help insurers develop more relevant products for their target consumers.
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 Hoffman, Evan. March 2016. IBISWorld Industry Report: Online Insurance Brokers in the US.
 Company website; www.zenefits.com