Group risk support services benefit both employers and employees, and while bosses and staff appreciate different characteristics of group risk products, both may value them as much as the insurance component, agreed delegates at a Corporate Adviser roundtable event last month.
Most providers now offer a range of wellbeing and human capital management support services, including early intervention services and employee assistance programmes. These offer a wealth of benefits, from access to GPs and second medical opinions, clinical screening services and nurse-led support services for both physical and mental health conditions, to helplines, covering everything from legal disputes, bereavement, financial problems and eldercare.
Delegates at the event debated which particular services were most valued by employers, or employees.
Canada Life Group Insurance marketing director Paul Avis argued that from an employers’ point of view an early intervention service should be a core part of this product.
Many of these services will kick in on day one, ensuring those who are absent through ill health — be it physical or mental — will get the appropriate help they need. This can reduce both absenteeism, and presenteeism, helping deliver a return on investment for employers, and better outcomes for affected employees.
Avis referred to Canada Life statistics that show 95 per cent of those accessing early intervention services do not go on to claim on an income protection policy. On average those using an early intervention service return within a five to seven-week period.
But despite these success rates, figures from Group Risk Development indicate that less than 0.2 per cent of those with access to these services are utilising them.
Others round the table agreed that an EIS was a core benefit within a group income protection proposition.
Stackhouse Poland account director, health & protection, Steve Thomson said that for him, an EIS and an employee assistance programme (EAP), remain the two key added-value benefits that he would expect to see on a group risk policy.
Towergate group risk and protection consultant Terry Fromant agreed that employers can see the benefit of such services. They can be a useful tool in opening a discussion about the relative benefits of group risk policies, he said, and the role these products play in terms of managing absence and helping boost productivity.
However, several delegates pointed out that the various counselling and helpline services offered can be more valued by employees. Avis cited research that has indicated that millennial workers in particular value the fact that group income protection products offer support and assistance for mental health problems — one of the few types of insurance to do so.
This led to debate as to whether these additional support services were seen as more valuable than the core insurance benefits.
There was much debate about the relative merits of each, but those around the panel agreed that it was hard to separate out one element of this insurance proposition from the other.
Fromant said: “Both are integral parts of the proposition. The support services are an essential part and complement the insurance safety net. But it is hard to have one without the other.”
He said both should be of equal value to employees. But he pointed out that many more are likely to utilise the support service, rather than make a claim, in the long run.
This may affect how these different elements are view.
Barnett Waddingham workplace wellbeing consultant Laura Matthews said: “From an employee’s point of view, I think most don’t value the insurance benefit until they come to need or use it. Then they really see it worth.
“If employers promoted the benefits of these support services more — as part of the overall insurance proposition — this could help it be a more valued employee benefit within the workplace.”
Punter Southall Aspire managing director for health and risk, Jon Webster agreed this is part of the reason that people undervalue benefits such as group life insurance or group income protection. “It is human nature to think ‘it will never happen to me’”, he said.
The panel agreed that this problem was magnified by the fact that many employees do not realise how low statutory sick pay rates and state benefits are for those who are unable to work through ill health.
Avis said: “Most people don’t imagine it happening to them, and if they do picture this scenario, they assume the state will provide for them.
“But this is not the case. Benefits remain low and there is an arduous assessment process to claim.” More should be done, he suggested, by employers and the protection industry to emphasise the fact that group risk products will help cover mortgage or rental payments in the event of ill health.
This he says is also a useful way to potentially extend sales of group risk policies. As Avis highlighted, less than 2 per cent of eligible businesses in the UK offer group life insurance and less than 1 per cent offer group income protection or group critical illness to their employees.
Highlighting the benefit of these support services he said, is a way to boost sales to this untapped market.
LifeSearch business protection and group leader Alan Richardson agreed, although he pointed out that it is the larger end of this market that is likely to be more receptive to this message. Larger companies, he said, can see the benefit of these services, but this is not always the case with the smaller SMEs.
Given the central role of EISs, EAPs and other support services within the group risk proposition, many around the table argued that they shouldn’t be referred to as “added-value ” services.
Others around the table supported this view. Richardson said: “Referring to these services as ‘added value’ or ‘bolt-on’ products implies that they are optional extra, rather than an integral part of the insurance package.”
Delegates said more could be done to highlight what these various wellbeing and support service would cost, were employers to source it on the open market. They are offered as a free benefit, which may mean some employers downplay the worth and financial value of these services – leading to lower levels of engagement. Fromant said that advisers have an important role to play in communicating the benefits of these services, particularly in terms of the ROI for the employer.
Given this, many on the panel thought that sales of group risk policies – and engagement levels – could be boosted by the products being rebranding, to place these support services as a central component.
Fromant said: “Very few employees – or employers – really understand what these terms like ‘group risk’ or income protection mean. Most employers still refer to ‘death in service’ benefits, rather than group life.”
Avis agreed, and said the words used remain an important issue for the future development of the sector. “The language used by advisers to sell these product, and by providers to describe and brand these propositions is hugely important.”
He asked whether there were better names that the ones being used that emphasise both the financial benefits and the support package provided.
There were a number of suggestions from the panel for alternative names for group risk products: for example employee protection or workplace protection.
Avis suggested that the focus should be on rehabilitation support. He cited research by trade body Group Risk Development (Grid) and comments in Swiss Re’s GroupWatch survey which shows that terms like ‘long term sickness support’ may gain more traction, although he said this doesn’t necessarily stress the insurance provision underpinning the policy.
Avis said: “It’s important to emphasise that this is a package that helps employees get back to work, and if it fails to do this, it will pay an income to support them in their absence.”
Avis pointed out that various suggestions have been put forward before, but none quite meet the ‘Ronseal test’ of doing exactly what it says on the tin, given the inherent complexity of this group risk market.
Webster said that it is this complexity that means advisers have an important role to play. “These aren’t commoditised products that can simply be bought off the shelf,” he said.
“Not all clients are the same – as advisers we need to look at what they need and select the most appropriate package.”
Fromant drew comparisons with the aviation industry, where budget ‘no frills’ carriers co-exist with airlines like Emirates, which offer more of an ‘all inclusive’ package.
However the panel thought that while these support service are an important part of the product – and may be a key part of the sales pitch – it is essential that the insurance product also delivers.
Richardson said: “It is important to do the basics well, and then offer the support services around this.”
He said at the end of the day the insurance element remained the core component of the proposition. “The reality is that clients are buying insurance products. I haven’t yet to have any clients say that they are looking to buy an employee assistance programme, with free life insurance attached,” he said.
This sentiment was echoed by Thomson. “Advisers can talk about the bells and whistle that these support services provide. But it is the service function that sits behind it that is of paramount importance, whether its handling claims promptly, good admin or smooth onboarding.
“It is not much good focusing on the smart chassis of a car if the engine under it is not delivering.”
But as Richardson pointed out, while these clients may be looking to buy an insurance product, the reality is they are sold much more.
Vested group risk and healthcare manager Mark McLeod said that increased adoption of technology and more focus on these support services may lead to more commoditised products in future. He did not necessarily see this as a negative from consultants though. “This could help raise standards across the board and lead to better engagement levels overall.
“The role of the adviser is to look at the whole employee benefit programme, which will include pension scheme benefits as well as group risk options.”
Advisers with this overview would ensure clients aren’t ‘doubling up’ on any of these support services provided, and ensure that each aspect of the product is suited to the employers’ needs.
They would also be able to focus their efforts on increasing engagement levels, so helping to boost productivity levels for employers and improving employee wellbeing.