Growth in group critical illness and big swings in provider member coverage were some of the most eye-catching factors identified by delegates attending a Corporate Adviser roundtable event to discuss the 2021 Workplace Protection and Wellbeing report. Advisers said product innovation will be needed if the most is to be made of the positive attitude to group risk, healthcare and cash plan benefits.
While the sector as a whole had remained resilient, the report showed that there are various providers that have not fared as well, while some product lines have performed far better than others.
For example while there has been strong growth in the group income protection and group critical illness segments, business levels appear to be more static in both the PMI and cash plan markets.
The report also showed that advisers rated embedded and stand-alone wellbeing benefits as delivering the most value for employees and the biggest return on investment for employers during the pandemic — a view that was shared with those in the debate.
However some consultants said they were surprised by some of the findings related to the group risk market.
Corinthian Benefits director Lee French said: “I am not surprised that the market has remained resilient. I think the public is much more aware of the services available through providers now. But I was surprising with the strong growth in the group CI market.”
As he pointed out, Covid hasn’t had a direct impact on this particular sector of the group risk market, as this isn’t listed as one of the conditions which would generate a payout. In contrast the high number of Covid deaths may have prompted many employers to look again at this level of cover to ensure staff have this most basic protection in place. Similarly, he was not surprised by the strong gains in the GIP market, with more awareness around long Covid, mental ill-health and MSK problems due to poor homeworking set-ups.
French suggested this increase is part of the general trend of employers looking to provide more comprehensive health and wellbeing benefits to staff.
The WPW report shows while some providers have seen strong growth others have seen business contract in particular product lines. For example in the group life sector L&G has seen the number of employees covered fall by 22 per cent, and Aviva by 14 per cent. In contrast Canada Life has enjoyed a 3 per cent growth, MetLife a 21 per cent growth and AIG Life a 67 per cent growth – although both these latter providers are starting from a smaller base.
Meanwhile in the GIP sector L&G has enjoyed 28 per cent growth in the number of employees covered while Unum and MetLife have seen falls of 2 and 4 per cent respectively).
Those attending the debate agreed there were a number of reasons for this.
Towergate Health & Protection head of risk David Williams said this may be partly down to the sectors they operate in. “Some business sectors, such as hospitality, travel and retail have been particularly badly hit by coronavirus and the subsequent lockdown.
“It may be that some insurers have had a particularly big book in certain industries and have suffered as a result.”
He added that service standards may have also played a part in helping some providers win business. “I think one of the driving factors is the ease of dealing with a provider: is there an online portal, how easy is it to use? This is important for new-to-market clients, particularly at the smaller end of the market.”
This he said may help explain the strong growth of AIG Life in the group risk sector. “They have a lot of this software in place from the Ellipse days.”
Consultants at the event also praised Canada Life’s We Care portal, which had been in development prior to the pandemic but was widely rolled out to clients during lockdown, offering a range of remote benefits.”
Williams added: “The range of added value services have also helped drive growth for many of these providers.
YuLife for example is taking prevention to the next stage, it is good at getting people out walking, taking exercise, looking after their mental health.”
The Ink Group managing director William Johnson said price is also a factor, alongside service standards. “From an intermediary perspective it can be an absolute nightmare getting some of these policies managed —getting a statement of account can be one of the most torturous exercises.”
But he added that over the past year it has been insurers’ propositions, particularly in relation to added value benefits and digital services they offer, that have been key to driving growth.
Redwood Employee Benefit Service managing director Jason Brice said that while growth in the GIP market has been impressive his own experience of the sector was more nuanced, as many of these new policies are ‘hybrid’ ones. “I don’t think we are seeing the desire to implement ‘traditional’ income protection schemes based on 50 per cent of earning to retirement age. There’s less of an appetite for that. Instead clients are looking for a more limited payment period to perhaps better control costs.”
Cost was one of the key issues under discussion when it came to the PMI sector. This sector has remained resilient despite being particularly hard hit in the early stages of the pandemic, with private hospitals and resources being switched over to the NHS in order to help provide sufficient resources to treat Covid patients.
Consultants attending the roundtable were supportive of the efforts made by PMI providers and pointed out that many had offered a range of ancillary benefits — such as online physiotherapy — for members during this period when routine operations, treatments and diagnostics were cancelled.
They remained confident that demand for PMI sales would increase in 2021 and through 2022, due in part to increased waiting lists and an overburdened NHS.
Brice highlighted the fact that some employers may see it as their social responsibility to provide medical insurance for employees to help take some of the pressure of the NHS. “There has been a lot of awareness about corporate responsibility and environmental, social and governance duties. This certainly seems to fit with the ’S’ factor in ESG.”
But he added that for many SMEs there was a concern about the rising cost of PMI – and offering a benefit where costs could escalate significantly in future. As he pointed out, in the past there have been schemes that have seen costs rise 30 or 35 per cent in a year due to medical inflation. “Finance directors will have a very long memory about this and may be concerned about offering a benefit they may not be able to afford over the longer term.”
He said there was a need for more innovation in the PMI market to address this issue.
WPA Healthcare chief executive Mark Southern said that as a provider they are working with clients to address issues of cost containment. He said: “There are options here to allow us to be really creative and we should be working with consultants to offer schemes that fit their client’s budget and profile.”
He said at the heart of this is a need to discuss with clients what outcomes they want from a PMI scheme. “We have sat down with companies who have a traditional PMI scheme with everyone fully covered for cancer treatment, for example, and unlimited outpatient care. Actually there may be a significant portion of their employees in their 20s who are not utilising these benefits at all. They may prefer a cash plan that helps them offset dental and optical costs.”
French agreed this was a critical part of the process. He said one of the key roles of the consultant is to understand the client’s need and build an effective health and wellbeing strategy. This comes before discussions around specific products, he said.
Brice agreed that this can work with existing PMI clients but he pointed out the challenge remains to convince those who do not currently have this benefit. He said he would like to see options that could perhaps cap price increases in future.
Williams suggested that there is the potential for more innovative product design. He said: “As a consultant I have far less experience in the PMI market. But as an outsider it seems to me there is the potential to design a policy that effectively targets NHS waiting lists, particularly for conditions that might have a significant impact on a person’s ability to work.”
With respect to the PMI sector the panel discussed the rising problem of missed diagnosis of a number of conditions, particularly, cancer — caused by the cancellation of scans and routine GP appointments during lockdown.
Southern said there was the potential to offer products that focused purely on these diagnostic tools, but he pointed out that this may not be an easy sell to employers. “A diagnostic-only plan might address some of the issues at present with the NHS and enable people to get a diagnosis as quickly as possible. But it can seem quite harsh to some to say there is only cover to the point of diagnosis and then you’re on your own, particularly if people still face delays in getting treatment.”
However Johnson said that there is a lot of scope to focus on health assessments, which can be included as an embedded service with many health and protection policies, but are also available as standalone wellbeing product. He said these are currently “undersold” in the workplace but offer benefits to both the employer and employees, not least because they take a more preventative approach.
“Employers can pay for a health assessment for employees once a year. This is a full MOT in a private clinic, is completely confidential, and looks at detailed blood analysis, lung function, heart function etc. This can act as an effective early warning system.”
He added that this also takes the strain off GP services, which he pointed out are still not really offering general check-ups at present.
Consultants were also positive about the future growth of cash plans, which provide a lower cost healthcare benefit.
Brice said: “I think we’ve probably introduced more new cash plans in the last 18 months than we have any other product.” He says they can be a particularly attractive product to smaller business who may not have offered health and wellbeing benefits in the past. “Even a basic cash plan on its core level offers a good range of services. There is a conversation you can start with the HR team, about the health benefits, health assessments, discount portals, gym membership, mental health apps and so on. The HR team have a lot of tools in their kit bag for a modest controlled cost.”
Johnson pointed out that cash plans can work well with PMI products, with one of the benefits being payment towards a PMI excess. However he said he doesn’t agree that these should be seen simply as a “lower-cost PMI”.
“People use to refer to these as poor man’s medical insurance but I think this assumption has gone. We see them as separate products each with their own distinct features that can support one another.
“In terms of ROI and feedback on usage employers can put one of these schemes in, and very quickly the HR team can report back to the CEO or FD on take-up and usage and how it is helping their employees.”
Southern agreed that a cash plan shouldn’t be seen as a “stepping stone” to full PMI coverage. WPA offers both.
Southern said: “We see it as a very important part of the suite of products that can be used to put in place a comprehensive health and wellbeing strategy.”
Those attending the debate agreed that they were facing a busy year ahead, with companies reviewing their wellbeing strategies. Consultants said their role was often to provide both insight and oversight on the range of associated benefits to reduce duplication and provide a more tailored solution meeting the client’s needs.
Williams said: “We’ve seen a lot more HR people changing jobs and this is also prompting reviews. It’s not a case of looking at one product in isolation. It’s a strategic review looking at the holistic package and range of associated benefits.”