Colin Fitzgerald: How to grow the SME wellbeing marketplace

Colin Fitzgerald, Distribution Director – Group Protection, Legal & General Retail

 

The cost of living crisis does not seem to have had a negative impact on Group Income Protection (GIP) sales. And that includes SME business, with 90.4% of in-force policies being attributed to smaller companies. This percentage has continued to grow steadily since 2018, according to Swiss Re GroupWatch 2023.

Looking at this by the c.1.3 million eligible UK SMEs (i.e. 2-250 employees), that equates to around 1.43% now covered by GIP. (Thank you Ron Wheatcroft at Swiss Re for help with these statistics!).

This is really great news. But the question remains, how do we extend this to the other 98.6% of eligible UK SMEs?

To find out, we went straight to the source. We wanted to better understand in what areas SME employers would value help from the industry; insurers and advisers. What we found suggested that support with strategic thinking around wellbeing – thinking outside of the benefit-only box – would be greatly valued.

This thinking seems directly aligned with evolving understanding that any efforts to improve workplace wellbeing need to factor in the work and working conditions, in order for interventions (whether one size fits all, or targeted) to be most effective. This was clearly articulated last year in the National Institute for Health & Care Excellence’s (NICE’s) mental wellbeing at work guidelines and, more recently, in a working paper from the University of Oxford Wellbeing Research Centre.

Wellbeing as an ecosystem: culture as well as benefits & services

The majority of SMEs (50-249 employees) said they want support to ensure wellbeing programmes are joined-up (benefits as part of everything else that contributes to wellbeing), measurable and communicable, according to Legal & General Group Protection’s Wellbeing at Work Barometer.

The top responses, in order of priority, all focus on joined-up thinking: designing an integrated wellbeing strategy (38%); measuring the value of that strategy (29%); and, in joint third place, measuring the value of benefits and services (27%) and help to communicate benefits as part of wider wellbeing and in a more personalised way (27%).

All these things came ahead of most aspects (Diversity, Eqity and Inclusion (DEI) aside) that consider benefits in a way that sits separately from wider wellbeing considerations: choice in design and cover levels; benefits cost efficiency and support of DEI goals; even communication via Total Reward.

A case of wellbeing thinking catching up with what SMEs already know?

Statistically less likely to claim, SMEs seem to have long recognised the contribution that GIP – and all the great wellbeing support that comes with it – can make to workplace culture. For example, industry body GRiD reported back in 2018 that the main reason for SMEs offering GIP was to look after staff and families. Also, to support recruitment and retention goals. These responses came well ahead of helping manage long-term absence. Obviously, the latter goes without saying and GIP continues to do what it says on the tin. But there’s a lot more to GIP than the claim. For example, our early intervention support ensured that one in five UK employees were able to return to work before any benefit payment was due on a GIP policy last year.

The built-in multi-disciplinary support – whether benefit payment is involved or not – should arguably represent a strong case for SMEs to have GIP in place. This, especially considering the UK government’s goal to encourage SMEs to get more proactive on helping those with long-term conditions get – and stay in – work.

How we, as an industry, meet the kind of SME needs identified by our research remains open for debate. At Legal & General, we’ve already implemented a number of ways and means (below) on which we’re obtaining ongoing feedback from advisers. Some things will work, some things won’t. But the key is to keep innovating and learning together. After all, as the saying goes, if we don’t innovate we will stagnate.

What are we doing to help move from tactical to strategic?

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