As a global player in the health and benefits industry, Mercer Marsh Benefits has had a frontline view of the impact the Covid pandemic has had on businesses across the world — and most importantly their employees and families.
Mercer Marsh Benefits multinational leader John Deegan believes the pandemic has highlighted intense inequalities, increased understanding of ESG goals and pushed wellbeing even further up the agenda. He says: “I don’t think any of us fully realised at the outset quite how profound or enduring the impact
would be.”
“I was in China at the start of the pandemic. But despite being at the centre of the outbreak, I thought at that stage this might be an issue more akin to the SARS outbreak, with more localised impact. But it quickly became apparent that this was not the case.”
He says the pandemic has helped propel the issue of employee wellbeing up the corporate agenda, and has highlighted the critical role that consultants and advisers can play to promote and support this.
As a partner and adviser to many global multi-national firms, Deegan says MMB faced a number of immediate challenges in the wake of the coronavirus pandemic, with borders rapidly closing and healthcare provision varying from region to region.
“Coronavirus, and the response to it highlighted the need for a globally co-ordinated view of insurance policies around the world so that gaps in coverage and support could be quickly addressed.
“We closely tracked Covid developments including coverage issues, social security changes, quarantine testing and vaccine updates and developed a constantly updated global information pack for clients.
“In Mexico we helped clients with limited cover for blue collar workers establish Covid-specific coverage that greatly enhanced their access to hospitals and telemedicine.
“Meanwhile when India experienced an extreme number of cases we helped clients in the co-ordination of virtual care, referrals to providers to deliver vaccinations, hotel isolation and home care, employee health education and multiple client webinars.”
Benefit harmonisation
The pandemic, Deegan says, has “shone a light on many inequalities”. This includes issues with traditional employee benefit and wellbeing programmes, where access to preventative care services, outpatient care, or medical care for whole employee segments can vary from region to region.
He says: “We’ve seen a number of employers looking to proactively address this across different geographies in a more consistent fashion, by developing global minimum standards that they commit to roll-out to all employees, regardless of where they might sit in the world.
“These minimum standards are a big issue and one area where we are providing a lot of assistance.” In fact, Deegan says this “global consistency” is now the number one priority for the firms’ multi-national clients, and says this is where consultancy services like MMB can add real value.
This equalisation of benefits extends beyond Covid. “For example maternity cover and benefits can vary hugely in different parts of the world. If you are an employer you don’t want a situation where a woman who is pregnant is facing a difficult situation in one country, where her colleague in another country is getting the best coverage possible.”
But he adds: “Despite this shift towards minimum global standards we have to recognise that in our industry provision and protocols remains largely local. And as such our multi-national clients — and we as their partner — must recognise the need to balance the global with the local. Local care protocols and the provision of care must respect local culture, requirement, expectations and legislation.”
Deegan says he has seen employee benefits programmes, both in the UK and overseas, evolve in response to the pandemic. “One key trend is the prioritisation of employee wellbeing by the C-suite. It is moving to the top of the corporate agenda and is increasingly part of a company’s wider ESG commitments.”
Within this wider areas of employee wellbeing, Deegan says there is now far more focus on managing mental health, while ‘social health’ is also starting to gain more attention.
“Managing mental health remains a high priority. Improving and communicating employee assistance programmes (EAPs) are high on priority lists, while more progressive employers are embracing the opportunity to supplement these with employee supports that address a more diverse set of needs.
“Social health is also getting more attention. Social connections can increase motivation. For many the workplace has traditionally facilitated this connectivity, but now, with far higher percentage of employees working from home employers must be more creative in how they deliver this support.
“Our recent Health on Demand research shows that 46 per cent of employees highly value virtual support groups for those who are feeling lonely and isolated. Our industry must embrace these solutions which go far beyond traditional insurance to deliver real employee support.”
Delivering on ESG goals
Companies across the globe are increasingly being asked to demonstrate their ESG credentials. Until now, much of the focus has been on the environmental dimension to this — or the ‘E’ part of ESG. But Deegan points out that employee benefits have a critical role to play if businesses want to show they are also taking their wider social responsibilities — the ‘S’ in ESG — seriously.
He says: “In the wake of Covid-19, economic volatility and social justice movements, we’ve seen businesses challenged to their core, and many leading firms reconfirming their commitment to their people’s health and wellbeing. Medical coverage to make quality care affordable and accessible is a key part of this.
“I think employee benefits can help drive more sustainable people practices. As a leader and influencer in this industry we think MMB has a key role to play in helping our industry advance what we would call healthy societies.”
He points out MMB’s research and data has shown that three out of four companies whose CEO has ESG accountability have a growth rate of 6 per cent or more than the market average, compared to 1 in four companies without C-suite responsibility for ESG goals.
As a consultancy firm and brokerage, Deegan says that the company is now routinely asked not only about their own ESG credentials, but those of the insurance providers and other organisations they are recommending to clients as part of an employee benefit solution. This is rapidly becoming part of the employee benefits landscape, with corporate clients wary about partnering with firms who may not share or adopt the same strict ESG values.
This issue was thrown into relief by a recent report by LGIM which asked questions about the environmental reporting of two US insurers, MetLife and AIG — both of which happen to be players in the UK corporate employee benefits market.
Deegan says consultants and brokers should expect to have to look at an insurer’s ESG track record alongside policy details and pricing. “A couple of years ago it was only a handful of organisations asking questions about climate change, equality, and so on. Now if we are being considered as a partner organisation, or are recommending a provider, I would expect to be asked for far more information about a range of ESG issues. We have to do that research on partners we work with, this is part of the process now.”
Rapid digitalisation
Employee benefits may be evolving to meet new needs, but Deegan says there is clearly a need for a “rapid digitialision” in order to deliver a high quality of employee support.
Deegan says: “Our research shows that nine in 10 companies are planning on moving forward with digital transformation in the next three years. Technology is a core component of our proposition, fitting alongside our consulting and broking expertise and supporting the delivery of clients’ global and local benefits strategies to drive operational efficiencies and enable a digital employee experience is vital if our industry wants to continue to play a key role.”
When it comes to MMB’s own technology solutions, Deegan says that a key component is the Darwin platform, which it acquired from Thomsons Online Benefits. “This is now part of our proprietary Benefits You Global technology suite and it allows companies to implement and manage concepts like wellness, spending accounts, discount programmes and defined contributions approaches to health care to give an enhanced UX to employees. Essentially we have created and continue to enhance our technology as a one-stop-shop for our clients form HR and benefits to the individual employee level.”
Deegan says technology has changed employee expectations and there is the assumption benefits will be customised and convenient. “This dynamic will ultimately encourage the growth of an omni-channel approach” The younger generation in particular, familiar with Instagram and TikTok, expect a more streamlined easy-to-use and desirable service he says.
Deegan points out there has been an explosion of health and wellbeing apps in recent years, with over 400,000 health and wellbeing apps available in the main app stores. But this can also create issues for employers and employees, deciding which services to prioritise.
Global comparisons
When it comes to digital innovation, Deegan points to innovation coming from Asia, while admitting the UK has been slower to embrace some digital solutions. He says the industry needs to do more in terms of building confidence in digital health care and wellbeing.
“I think the sheer number of apps can be overwhelming for some people. And there is still a reluctance among employees to upload all their details and share medical information on an employer-sponsored platform.
“Even though this information is confidential, there is a trust element there that we need to address.”
In other parts of the world there is more enthusiasm for digital healthcare solutions. “Our research shows that globally 50 per cent of the workforce sees apps and devices to help self-manage health conditions as ‘highly’ or ‘extremely’ valuable, whereas in the UK the figure is just 34 per cent. In some countries like Brazil the figure is up to 75 per cent. This may indicate that more work is required to convince employees of the value of these products and services.”
He adds that insurers and consultants also need to work together more, to share information to ensure a better digital experience for clients. “I don’t think I would be offending anybody if I said that as an industry we are poor in terms of the usage and sharing of data.”
He adds structural differences between the UK and some other jurisdictions may have slowed innovation and potential demand for services. “For example in the UK private medical insurance has a role to play in the provision of healthcare but it supplements the National Health Service. In many other countries where we operate social security doesn’t exist, or the quality of care available is of a lower standard and therefore insurance programmes that we arrange play a critical role in the lives of employees and their loved ones.
“For UK or European-based multi-nationals it’s vital to remember that the role they play in delivering maternity care, cancer treatment or onsite primary care is vital to people’s lives and should not just be seen simply as a cost.”
Despite the relatively slow uptake of digital, Deegan says there are a number of areas where the UK is leading the way when it comes to the delivery of employee benefits.
“First of all, when it comes to the customisation of employee benefits, we are seeing more demand globally from employers to give employees choice in the types of benefits that they receive, rather than providing off-the-shelf pre-defined benefits that may not be suited to an employee’s personal circumstances. Customisable, flexible benefits have been prevalent in the UK for years now and we are seeing this become common in many other countries.
“The second area to call out would be longer-term disability management. This is particularly relevant now as there is a growing concern that the impacts of the pandemic will start to play out in longer term health issues for employees. This could be as a result of mental health issues, it could me musculoskeletal issues from poor posture and inactivity while working from home, or the consequences of serious disease not being identified early enough due to missed screening.
“The UK insurance industry has for many years been a leader in disability management; disability insurance in the UK is just as much about supporting employees with treatment, rehabilitation and re-skilling as it is about paying a claim. We think there are examples of best practice in the UK and other developed markets that can be adapted elsewhere.”
Looking ahead Deegan says it is clear that the pandemic has highlighted to leaders to the reality of risk and has underscored the importance of being prepared.
“Executives are looking at all risks and their interactions with more attention. Employers are recognising the importance of support employees during potential future crises.
“Leaders realise these challenges are complex and they can’t solve them on their own. This is certainly true for the health and wealth protection gap as well as the stakeholder capitalism (ESG) agenda.”
But he points out that Covid wasn’t the only seismic change that has happened over the last year. “The Black Lives Matter movement added fuel to the diversity, equity and inclusion (DEI) agenda, and ripped the band-aid off already widening gaps in society. Now everything from access to the internet, medical care, vaccines and the rising cost of healthcare are all playing into this agenda.
“The call to focus on the future is deafening. In times of crisis resilient organisations are able to balance a focus on today’s most pressing issues with a future vision, bringing all of their stakeholders along on the journey.
“For companies, stakeholders are no longer synonymous with shareholders, in fact, now it means first and foremost their people.”