[00:00]
Dana Jenkins: I am very confident that the importance and the necessity and the value of employee benefits is only going to increase.
What I hope is true is that we can look back and say, hey, those things that once seemed immovable are solved. They're stabilized. They're normalized. So many things that once felt impossible. Bills are right. Data is right. Systems are integrated. Now what else can we do?
Ansel Parikh: Welcome to another episode of The Current, a bi-monthly podcast exploring the intersection of people, finance, and data. I'm Ansel Parikh, the co-founder of Finch, the connectivity platform for the employment ecosystem. Today, I'm joined by Dana Jenkins. Dana is the Vice President, Head of Transformation at Unum, one of the largest providers of disability, life, and supplemental benefits in the United States.
During his career at Unum, he's led product management for Broker Connect, spearheading the company's digital integration strategy with platforms like Employee Navigator. And now he helps oversee Unum's broader transformation agenda with quoting and platform connectivity. Before moving into product management back in 2017, he spent six years in billing operations. So Dana, welcome to the show.
Dana: Thanks for having me. Really excited to be here.
Ansel: Yeah. And so looking back at your history and some of the things that you've done in your career, you've spent a majority of it in insurance and benefits, focusing on technology and the customer experience. So maybe taking a step back, what drew you to the benefit space, and how did that customer experience orientation really shape the way you approach product transformation at Unum?
Dana: Yeah. So truth be told, Ansel, I grew up around it. My father, who is Mike Jenkins, he's been working in group and voluntary insurance in some capacity for over 50 years, including a long career at Provident, which merged with Unum in 1999. He's still working today as a broker and as a case builder. And I will tell you that sometimes my wife and my stepmom, his wife, have to call timeout on the insurance nerd talk at family dinners and cookouts where it's like, okay, enough about plan configuration and enrollment. So I love the benefits space because it matters. It matters to people. People use their benefits when something significant has happened in their life. And to be able to offer financial protection and say, hey, here's one less thing to worry about, is powerful. And I don't personally process claims or pay benefits, and I never have — you just read out my background — but I like to say that in a way we all do, because it's our job to keep the runway clear so that there's nothing between people and their benefits when they need them.
And to your question about a CX background, I would say one of the things I most appreciate about the digital transformation space at Unum is that we are pretty relentless to hold each other accountable for two questions. One is, what's the problem you're trying to solve? And then, what's the experience you're trying to enable? If we can get those questions right, then the technology or even the process engineering that we need comes into focus, and we'll be delivering solutions to a problem, not in search of a problem.
[03:26]
Ansel: Yeah, I really like that, especially in this day and age of AI — there's a lot of solutions looking for problems. It really sounds like you've grounded yourself in what is the core thing we're trying to do. And I like that you add the, what is the experience we have to deliver? Because at the end of the day, insurance is a pretty commoditized business at its core, but there's so many things that technology as well as operations can do to really drive a much better experience. And that's where that differentiator really starts to play out. And I think that's where you see Unum take steps forward, ahead of the pack, to really find ways to build innovation there.
Dana: Yeah, and we've all done that, by the way. We've all done that where we started with the tech or we started with the solution. We've all done it, which is how we've learned that the way to go about it is to actually start with the problem and the experience, and that will inform the tech you need.
Ansel: Yeah, definitely. And I know there's a lot of problems in the insurance space — I think no industry is without them. But I did want to highlight one that we've commonly heard, and it's one that you particularly have spent a lot of time thinking about. It's on the customer experience side, but it's also on the core infrastructure at an insurance company. And that's a problem related to premium leakage. So I've been reading a bunch about this, and I'm trying to get a better sense of what the impact of this is.
I've seen estimates anywhere between five to even 20% of annual premiums are not collected during the reconciliation process due to billing inaccuracies and process gaps. Even if you take a few percent and you put that into a massive book of billions of dollars, those are pretty staggering numbers. And so, for someone who's not a nerd like us — especially you, with a family background in this — can you walk us through what premium and billing leakage actually look like in practice, and where does that money go?
Dana: Yeah, I'll do my best. I do enjoy nerding out on this topic as well. So simply put, premium leakage is a gap between what the carrier, like Unum, was paid in premium and what the carrier should have been paid in premium based on the policy rates and rules. A really simple example would be if your car insurance premium is $200 a month and you paid $170, there's now $30 of premium leakage there, right? Multiply that out by hundreds of thousands of people, and you've got a pretty significant problem on your hands.
And I will say, 15 years in this space, I have very rarely seen ill intent here. Employers want to do the right thing for their employees. They want to do the right thing for the carriers that they've chosen. This stuff is just very hard. And between system configuration issues, data exchange issues, processing issues on the carrier side, and just a simple misunderstanding of the process, it's easy for the boat to leak. And it's not always easy to know that the boat is leaking until there's a lot of water, unfortunately. I remember getting into this space and getting introduced to the concept of self-accounting, which is, you tell us what you owe. It's like if the electric company said, hey, can you go figure out how much electricity you used last month and then pay us for it?
Ansel: Ugh, I wish everyone worked like that.
Dana: Your initial reaction is that it seems crazy to put that on customers, but at the same time, if you have a customer with a thousand employees, two thousand employees, five thousand employees, no one's going to get a highlighter out and reconcile a bill person by person. So it sometimes becomes the best of two not-always-great options.
Ansel: Yeah. Why do you think it's been tolerated for so long? Obviously, with self-reporting models, it seems like there could be a lot of holes, but I can understand it from a customer experience standpoint, right? You kind of have to find some middle ground. But is it a technology problem? Is it a process problem? If you think about root causes, where do you think the bottleneck is to solving this?
[07:31]
Dana: Yeah, it's complicated. So let's hone in on disability earnings and why this becomes so complicated. The first thing to know is there are two concepts with long-term disability. There is covered payroll, which is the earnings that we are covering. And then there is covered benefit, as in how much will the employee actually get paid if they go on approved disability. And the benefit is generally going to be a percentage of the covered payroll. I would say the most common one in the industry is 60%, but it doesn't have to be — you'll see some other options. So the industry standard is that premium is calculated off of the payroll that we're covering. The risk factor is the payroll we're covering, not the benefit that we would actually pay.
And a very common mistake that we see in both system setup and in manual calculations is that the carrier ends up getting paid off of the payable benefit instead of the covered payroll, which results in a 40% premium leakage for the LTD plan. And someone who's listening to this who's not as close to the space may ask — and this is a fair question — how can you not catch a 40% discrepancy right away? Very fair question. But again, in a self-accounting model, where you're dealing with bottom line aggregate numbers, it might take some type of tripwire to figure out that there's a problem, like a claim, an audit, a renewal. Something will bring it to the surface, and then it gets messy. So that's the first part that makes it complicated: these concepts of earnings versus benefit, how premium is calculated one way and claim payments are calculated another.
The second thing that adds complexity is what the industry calls definition of earnings. So let's say we have a long-term disability plan that will pay 60% of covered earnings up to $10,000 a month. Sounds straightforward. But what do you mean by earnings? Because for a lot of workers, their income is a mixed bag of base pay, overtime, shift differentials, bonuses, commissions, special incentives, holiday pay. And as an employer, you want carriers to take all of those components into consideration when calculating benefits. And for a very good reason: you want a comprehensive benefit for your employees. If the employee goes out on disability, you want them to get everything that they're entitled to. And so do we. But it does make managing the data a lot more complicated than just take your last paycheck and multiply it by 26. There's a lot more that goes into it.
Ansel: Yeah, no, it's pretty fascinating. If I look at Unum's customer base, you run the gamut, right? You work with Fortune 500s all the way down to the small mom and pop shops, helping them offer these types of benefits. How does that differ if they're, say, on an Employee Nav versus they've got their own ben admin system and Workday and they're 5,000 people versus 50? Does that make it 10 times harder, a thousand times harder? Or are there some things that you can do at different stages that allow you to at least cap or contain some of that leakage as it gets larger in the company?
[10:45]
Dana: Yeah. So you think about premium leakage for a company with 50 people versus a company with 5,000 — it just shows up different. Obviously, the financial impact is going to be more significant at a large company if you think about dollars, but it shows up differently. A company that has 50 people is likely going to be list-billed, which means that we have the employee data in our system. But that's not perfect either, because it can get dated, it can get stale, it may not reflect recent promotions and earnings. But then with 5,000 people, we're not going to have employee-level detail in our system. That's a self-accounting, self-administrator customer who is paying bottom line numbers, which does make the overall administration easier. Like I said, no one's going to get out a highlighter and reconcile a bill with thousands of people on it. But it does make it easy for problems to hide out sometimes. And if you don't catch them early or proactively, there is usually some type of thing that brings it to the surface, like a claim, like a renewal, or some type of audit.
So you asked about Employee Nav and Workday, and I appreciate you asking about that, because we are very proud of what our teams have built for customers and brokers through HR Connect and Broker Connect. You'll see both of those experiences out there in market. HR Connect really focuses on the larger market where customers have chosen their HR technology like Workday or ADP. Broker Connect really focuses on the smaller market where brokers are the primary decision maker and they provide the technology solution like Employee Navigator. And what I would say is, even though those two capability sets serve different markets and personas, they're solving many of the same administrative pain points, including billing. So what we've done is we've built solutions that capture data directly from these systems and automatically calculate and create an invoice on behalf of the customer.
And why we felt like it was worth the time and investment to do that is, first of all, there's no list bill reconciliation against our system. The customer's platform is the source of truth and the system of record. If you say they're employed and you say they're enrolled, so do we. But at the same time, no more manual self-accounting — no complicated reports and VLOOKUPs and spreadsheets and earnings calculation formulas and pivot tables. We do all that for the customer. Through that system integration, we take a picture of the data and we give it back to them as a bill.
Now, that does require us to break some long-held assumptions, right? It's been an industry standard for decades: small customers must do this. Here's a bill, this is what our system thinks is true — grade our homework and fix it for us. Not a great experience. And with large customers, it's like, they have to do self-accounting because they're so big, so you go off and do the work to tell us what you owe. So it kind of goes back to what I said at the beginning: we identified the problem, we identified the experience we wanted, and then we built the tech and the process to get there — which is that your bill is a reflection of what's in your system, but we're going to do the work for you.
[14:01]
Ansel: Yeah, no — I mean, you put in a lot of work and effort. I know building to those systems is no easy task, and there's always fun edge cases with every employer when they configure things. When we look at this problem, it's pretty fascinating, because it's a unique problem that hurts everyone, right? The carrier is collecting less than it should, the employee is overpaying or underpaying, and employees might not even have the coverage they think they have. That is just an all-around, wow, we've got to solve this. And so I'm curious — at least with the stuff that you've done with HR Connect and Broker Connect, what's been the feedback from customers? You've kind of had to put a little bit of a behavior change here.
Dana: Yeah, the feedback has been overwhelmingly positive, and the feedback that we get most commonly is just how much time we've saved customers. And that's a really great thing to hear, because we know that time is expense, right? And we know that HR professionals, especially at a smaller company where there's not a huge HR and benefits department, they have so much going on. These folks do not have a ton of time that they can set aside for ancillary supplemental benefits like ours. So one of the things that we would often hear from customers is, you just take up too much of my time and you just made it too hard.
And so, through these integrations, through these automations, we've been able to take a process that customers told us took anywhere from six to 10 hours a month to get all the data ready and pay, down to 30 minutes to an hour, depending on what level of internal reconciliation they do. So that's the number one thing we've heard: you've given me back a lot of time, which they need.
Ansel: Yeah, and it's time that you don't want to spend doing reconciliation. I can tell, from all the HR people we've talked to and myself included, it's very low on the list, but it's one of those absolutely essential things you have to do. Otherwise, your employees aren't going to get the benefits, won't get the coverage you need. And so the thread that I'm seeing throughout the whole process is that the heart of this issue is, at its core, a data problem — something you are uniquely suited to address and understand, where carriers need the data accurately from employees. You need the pay data, right? And oftentimes in the past, they're the last ones to get it, because asking for it can be a pretty big ask for a large company, or even a small one with few people.
And so when you look at the evolution of this ecosystem — obviously Finch is helping play a part there — what are some of the opportunities you see in the future, in a world where all this data is a little bit more connected and you do have timely information? Are there things around the corner where you go, if we could build this or create this additional experience improvement, we think that's going to be where the industry is going? I'm curious if you've been exposed to that or thinking about that as data becomes more accessible.
[17:05]
Dana: Yeah, I mean, like I said, we're very proud of the solutions we've built for Workday and ADP and Employee Navigator. But that is definitely an investment of time and resources and energy. So if you think about, you know, a magic wand — imagine if we could do that at broad scale. If we can capture that data real time and point in time, just think about the end-to-end automation and accuracy and simplicity we could deliver: with enrollment, with evidence of insurability, with billing, with verifying eligibility for benefits, and even leave administration, which is becoming more and more of a need as the leave landscape is getting much more complicated across the country, with more states rolling out their own state programs in addition to the federal program.
So you think about that ability to enable that digital end-to-end experience at broad scale — that's the dream, that's the game changer.
Ansel: Yeah, it definitely makes sense. And the main thing is, for the employer, you want to make it seem like magic, right? It's all happening behind the scenes, it's all happening accurately, happening in real time. That's something we all dream for, and I think we're getting there. But maybe my second-to-last question is, on that journey, where do you think we are? On a scale of one to 10 — 10 being we're almost there, connected, we have everything we want as an industry; one being no, everything's going to be paper and pen for the next 10 years — I'm curious how you see where we are, and maybe where we need to go next.
Dana: That is a great question. I think I might want to say somewhere around a six or a seven, right? Change is hard. It really is, especially when you're talking about long-standing industry norms. These are hard to change, but I will say they're not impossible to change. We've seen some really good work in recent years through LIMRA and through the LDEx standards, where carriers and technology partners are coming together to say, let's set some standards to streamline the experience for our customers and broker partners who engage the full market. Let's remove some friction from the process. And we're a LIMRA partner here at Unum as well.
And I'll also say this: here at Unum, we don't mind at all to be different and to show up differently. So we're not going to start from a place of, this is a decades-old industry norm, therefore we're stuck. No — we don't mind pushing on that, but we do want to make sure that we're showing up differently in ways that really matter to customers and brokers. We could come out and say, hey, we've come up with a new way to calculate disability earnings and premiums that's easier for us. But this isn't about what's easier for us. This is about the problem we're solving, which is that employers want really comprehensive benefits for their employees that are also easy to administer. So I think I gave a six or seven, Ansel, because we're much further along than we used to be, but we're not nearly as far as we need to be.
And I would say, especially with emerging AI solutions — it's a podcast, we have to talk about AI, right? It's like a rule. I've been in this space for 15 years, and it feels to me like the pace of change in the market and the tech landscape is as fast as I've ever seen it. So I think the challenge for carriers like us is that what may be considered an innovative solution today may simply be table stakes, expected tomorrow. And this isn't to discount the great work we've done. You've heard me say many times that we're proud of HR Connect and Broker Connect, we're proud to be a LIMRA partner, we have multiple LDEx solutions available in market. But we can't rest on our laurels. It's got to be foot on the gas right now.
Ansel: I love that you brought up AI. Obviously, it wouldn't be a tech podcast without some of that. When you're looking at new AI solutions, what are the top one or two questions you ask yourself to really understand — again, is this a solution looking for a problem, or something that's actually tangibly addressing the real need? Because it's always fascinating to see how different people who have a lot more context on the industry, or on how things actually work behind the scenes, have been looking at these solutions.
[21:12]
Dana: Yeah, I would say the lens I look at it through is, how can we free up time for people to do what they do best — which is to be consultative, empathetic experts, guiding people through what can be a very complicated space? The more task-oriented stuff that we can take off people's plates through things like AI, that creates more bandwidth for our people to do what they do best, which is show up as experts when people need them. That's how I look at it.
Ansel: Yeah, that's smart. Maybe the counterpoint to that question is, is there one piece of this ecosystem value layer that you think AI shouldn't touch for at least a while? I'm curious if there's any piece where you go, hey, having a human there is going to be really valuable, especially in a world where everything else becomes automated and bots.
Dana: Yeah, I think you'll see, here at Unum, we are definitely being aggressive and we want to be innovative, but we also want to be very disciplined. And one thing that comes to mind for your question, Ansel, is definitely around claims decisions. Don't get me wrong — there's a lot that AI can do to help set the stage for a timely, accurate claim decision. But we know that at the end of the day, there does need to be an expert in that process to make sure that we're making the best decision for the employee and their employer.
There's a lot of prep work that goes into a claim or case review, like pulling documents together, so there's certainly an opportunity for AI to help streamline the review process. But at the end of the day, it goes back to what I was saying: what are we trying to do? We're trying to free up time. For what? So we can show up as the consultative, empathetic experts in market and for our customers when they need us.
Ansel: Yeah, that's really refreshing, and it's good that you're being disciplined about this. I think it's always something that's very easy to get sucked into the hype, but it's really important to go back to that grounding of, is this a problem? Are we solving a real problem, and are we creating a better experience for the employers, the employees? So I have one closing question, kind of wrapping everything up, that I ask everyone. And especially since you brought up how fast technology is changing today versus any other time in the last 15 years — given everything we've talked about today, how do you think all these shifts will change what your job looks like in five years?
Dana: That's a great question. So I'd say two things. One is, I am very confident that the importance and the necessity and the value of employee benefits is only going to increase. And I say that because we know that working families and young adults who are getting started have a lot of challenges to navigate — the cost of health care, the cost of education, housing, child care. So financial protection for the unexpected, or even the expected, like starting a family, is only going to become more important and valuable.
And then what I hope is true is that we can look back and say, hey, those things that once seemed immovable are solved. They're stabilized. They're normalized. So many things that once felt impossible — bills are right, data is right, systems are integrated. Now what else can we do? What else can we do that we haven't even thought of yet? Because we're going to clear the runway for so many of the things that seem like such big problems today.
[24:45]
Ansel: For sure. When I look at this, the things we're solving today are going to be — and I'm hoping — table stakes in the next couple of years, and now we're solving maybe more important ones that are more people-oriented.
I'm excited for that future, but it is, as you've noted, hard work getting us there. It's not simple, but anything worth doing is going to be hard. And so I'm glad that you're still sticking with it, and you've got another 15 years plus to keep going. But with that, Dana, I really appreciate you nerding out with me on this ecosystem, talking about things that many of our viewers may have heard of but don't fully understand. And I know I learned a lot.
Dana: It's hard. Yeah, it was fun.
Ansel: Thanks again for coming on, and looking forward to learning more and seeing how this industry evolves together.
Dana: Thanks for having me.
