One of the biggest challenges in selling insurance products is that they are effectively intangible. They promise that if something happens, at a later date, the insurer will be there to pay out. You never know if you’ve bought a good one until you need to claim. In this context it’s hard for consumers to fully grasp the benefits of our promises. People tend to think things will never happen to them.
There is growing evidence that if we can bundle other more tangible benefits with them, consumers will more clearly relate to our products. More and more insurers are supplementing group risk products with added value benefits. The latest example is Aviva with its DigiCare+ offering for group income protection and group critical illness scheme members. This is now included for both new and existing contracts.
Aviva is offering a free annual blood test- based health check of 20 biomarkers, virtual GP service, UK second medical opinion, mental health consultations and nutrition consultancy. This is a range of services which could comfortably deliver benefits worth £200 or more to each member of the group scheme. Clearly Aviva is leveraging their ability to buy in bulk in a way smaller enterprises cannot, so there is a significant potential win for both sides.
In the current environment many of these benefits really come into their own. In the US remote GP services have been demonstrated to reduce the number of staff calling in sick because of a doctor’s appointment by two thirds, releasing resources for more time to be spent on those who do need primary healthcare. Similarly, in a world where staff are dealing with the challenges of working from home, knowing employees have access to up to six mental health sessions per year is a benefit that as an employer I see as really valuable.
Over the last few years an increasing number of group risk providers have introduced a range of value-added benefits. Having had first-hand experience of several, some frankly are of very little real value. For example discount vouchers with 101 different firms that are the same as you can get from just about every online discount coupon voucher scheme are nothing special. Indeed some insurers just seem to want to add benefits without enough due diligence on the supplier.
One such example I came across actually offered a very attractive discount on a hotel booking site, but any employee who already had an account with the hotel booking service was excluded. I also came across a scheme which offered the user a significant discount on individual life insurance, with an entirely different insurer. Part of the deal was that the member would be buying direct from the other insurer, despite the plan having been arranged via a very high-profile IFA.
By comparison, services like Digicare + deliver real benefits that have much to offer both employee and member. To be clear Aviva is just the latest organisation to go down the virtual medical services route. I expect to see an increasing level of innovation across the market in coming months.
We should be entering a golden period for group risk – never have the products been more needed, never has there been more interest from consumers in what they can offer. Yet group risk is not without its challenges. Some insurers’ renewal processes leave much to be desired and there is the issue that the industry still stubbornly refuses to disclose claims stats other than as a sector, when many of the same insurers operating in the individual protection market actively promote their individual claims payment records. This is an issue I believe those insurers with strong payment histories could use to differentiate themselves, but that is a subject to discuss in detail another day.
In the meantime, Aviva and others are adding valuable benefits which can significantly increase member engagement with their group risk providers.
Group risk has huge potential to significantly reduce the level of the protection gap, especially if we can make contracts more tangible by providing benefits members use on a regular basis without the need to make a claim. This can provide a foundation for a market where premiums may no longer be the sole differentiator, rather there may be a strong case for advisers providing a detailed assessment of the whole package offered.
