One in every five UK businesses could be missing out on better renewal terms on life insurance, income protection, and private medical insurance plans (PMI), according to Aon.
According to data from Aon’s UK Benefits and Trends Survey 2022, many firms review policies every year or every two years, while others haven’t done so in over five years.
According to the findings, employers are likely to examine their life assurance and PMI policies the most. Every year or every two years, 71 per cent and 68 per cent of employers, respectively, evaluate their policies. Income Protection is reviewed every year or two by 58 per cent of respondents, while critical illness is reviewed by 36 per cent and occupational health is reviewed by 32 per cent.
But many firms claimed they had reviewed their policies “during the previous five years” or “haven’t done so in more than five years.” Nearly 23 per cent of respondents said this happened frequently for PMI and Life Assurance insurance, 18 per cent for IP, 15 per cent for critical illness, and 38 per cent for occupational health.
According to Aon’s broker data, insurers’ projected renewal terms across the key insurance lines of life assurance, income protection, and private medical will increase by 13 per cent to 23 per cent on average.
The survey by Aon also reveals how much employers use value-added services from healthcare and risk providers. Employee Assistance Programs, educational content, and applications, for example, can help employers better support their health and wellness objectives. Employers think they are very important and a vital aspect of their plans 49 per cent of the time, up slightly from 45 per cent last year. 40 per cent said they wish to learn more about them or that they aren’t a big component of their approach.
Furthermore, only 18 per cent of companies consider the claims administration and rehab services provided by their Income Protection providers to be an important element of their overall strategy. Nearly half or 48 per cent use the services, although only to a limited extent.
Aon principal health and risk Mark Witte says: “Businesses have been navigating new forms of volatility and the uncertainty continues, so it is concerning that around one in five employers aren’t proactively using market leverage to achieve greater value through improved renewal terms. Although the majority of employers test the market in line with standard rate guarantee periods, this practice is more common with risk insurance than with medical benefits.”
Witte adds: “The challenge of obtaining full value from these services and integrating effectively with other health suppliers, most notably Occupational Health, is not a new one. But given the evolving challenges presented to employers in managing employee health in a remote working environment and set against the long-term impact of the Covid-19 pandemic on our health, the importance of robust, effective and targeted health management strategies has never been more evident in building a more resilient workforce.
“We also believe there is an opportunity for even greater innovation from providers, offering value-added services that employers and their employees equally value. With overall market growth limited across the risk and health insurance lines, truly valued additional services may not just help increase utilisation of these services by employers, but also support growth for the industry as a whole.”