Intermediaries have played a major role in the growth of both the private medical insurance and group income protection markets since the mid-1980s. But more recently, growth in sales of both of these risk products has stalled and, in an attempt to stimulate new opportunities, insurance providers have been developing a range of services aimed at improving management of health at work.
The concepts behind these new services are more complex than those underpinning the two risk products, leading to the question “what is the role of the intermediary in the current market?” It is important to recognise that only around 15 per cent of the UK workforce receives company- paid PMI and an even smaller proportion gets income protection cover.
It is against this background that insurers have responded with new products and services aimed at managing health at work through improved wellbeing and early intervention.
It seems obvious that there is a role for intermediaries in helping employers to take this agenda forward. Moreover, there is value for intermediaries and providers alike in intermediaries widening their activity, generating more fees, creating greater long term value and improving client retention.
But, for intermediaries who continue to work exclusively in the PMI market and let their clients find someone else to help them with the wellbeingagenda, the future looks bleak. Those who stick to their PMI knitting face the additional threat of advisers with a wellbeing competence gaining a strategic foothold with their clients and eventually being invited to help with the lot.
So what is holding back progress? Is it the insurers for failing to demonstrate value, intermediaries for showing little or no interest or clients thatjust don’t get it? True, some intermediaries are taking note, but their experience is limited compared with what employers are likely to need tomake significant progress.
Managing health at work is a complex subject needing expertise in areas including employment law, health and safety legislation, HR best practice, occupational health, psychological management and data analysis.
It also requires understanding of best practice in people management, which focuses on resilience, motivation and engagement. Methods which
recognise that employees value recognition from their manager more highly than, say, discounted gym membership, or which understand that gimmicks such as worksite Indian head massage or free fruit pall in comparison with the value employees see in working for an employer that helps them grow and develop to fulfil their potential.
It is true that many employers are slow to appreciate the importance of improving health at work. Many seem resigned to high levels of sickness absence and staff turnover on the basis that the costs are factored into their operating model and therefore into the cost of their products and services.
However, those costs are both high and in many cases buried and so it requires a high level of salesmanship to bring the issues and potential solutions to clients’ attention.
Intermediaries are good at selling – an essential skill in an increasingly competitive world. That doesn’t make them healthcare consultants. On the
other hand, because insurers are operating large occupational health and EAP businesses, they are well placed to offer consultancy services without undermining the intermediary.
There is no reason for intermediaries to fear working with insurers in developing the wellbeing agenda. Insurers are more than happy to work with intermediaries to complement their capabilities with in-house strengths – whether that is actuarial, occupational health or psychological support. While we need to employ experts such as these to be effective, there is no need for intermediaries to go to that level of investment.
Rather, they can draw upon our resources and we can work with them and their clients. This will keep their costs down whilst adding value for their clients through improvement in performance and productivity.
For the healthcare industry to be truly successful, we need intermediaries to understand that churning of PMI is in no one’s interest. It destroys long term value in exchange for marginal short term savings that can’t and won’t last. The size of the opportunity for wellbeing and early intervention is enormous – 100 per cent of the workforce, not just the 15 per cent currently covered by PMI. Insurers represent an opportunity – not a threat – and together we can build new markets.