The group protection market looks in rude health, with continued strong sales growth across all major product lines despite ongoing economic headwinds. READ THE PDF SUPPLEMENT HERE
At a recent roundtable event at the House of Lords, consultants and providers discussed the findings of Corporate Adviser’s latest Workplace Protection and Wellbeing Report. They were upbeat about the progress that had been made but not complacent about the challenges ahead.
Many commented on how group risk, cash plan and PMI products have rapidly evolved in recent years, offering digital access in the wake of the Covid pandemic and an ever-growing range of wellbeing support services.
However, consultants attending the event were concerned that the proliferation of these added-value services was over-complicating propositions.
Titan Wealth Management senior corporate benefits consultant Karen Gittings said this was a major problem for consultants. “As an intermediary, it can be a real minefield, particularly when it comes to comparing different propositions or switching schemes.”
She said that this complexity is getting worse, in part due to frequent product updates. For example, she said some group risk providers offer these ‘free’ benefits to all employees, regardless of whether they are covered by the main insurance policy. Others only offer these services to insured members, while some now extend these services to the whole workforce but only if 90 per cent are covered by the policy. There may also be differences between the exact support services offered, whether they extend to family members, and how ‘family members’ are defined.
“You have to keep your wits about you when switching schemes to ensure employees maintain the same level of benefits,” she said.
First Actuarial group protection consultant Suzie Nedza said that this complexity wasn’t just an issue for advisers. “It is hard enough for consultants to navigate these different product options. But the main problem is this creates confusion and complexity for employers and their employees.”
Gallagher benefits consulting team leader Anders Lewis pointed out that this is a particular issue for larger corporates who are likely to offer a range of employee benefits. “You don’t need five different EAP or virtual GP services. It is completely unnecessary.” He said not only is this contributing to rampant price inflation across the sector (see next article) but it is muddying the water for both employers and employees when it comes to using these products, potentially impacting how they are valued in the workplace.
“You just don’t need all this different information getting through to the end employee,” he said. “Even if it doesn’t reduce the cost, it would be good to turn off some of these services.”
Suzanne Summerfield, wellbeing solutions consultant at PIB Employee Benefits, said even within the same product there may be different apps for different services. As a result, many may get overlooked and employees might not be taking advantage of the wellbeing support offered.
Pick ‘n mix approach
Those attending the event wanted providers to address this issue. Many would like to see insurers and cash plan providers move to a more menu-based approach, giving consultants the ability to effectively ‘turn off’ certain services.
“We’d like to buy a basic product and then get the option to purchase the added-value services the client actually needs,” Gittings said.
“This would enable providers like Canada Life to offer unique benefits like their Toothfairy service,” said Lewis. He said this virtual dental service had proved popular with clients. “But there would be the option to remove services that are widely duplicated elsewhere. This would simplify products for clients.”
However, consultants acknowledged there were different challenges for those advising the SME market. Roy McLoughlin, director of strategic partnerships at Cavendish Ware, said these support services are an attractive feature of group risk and cash plan products, with many of these firms not offering extensive benefits to employees. Duplication was far less of an issue here, although it was still important these benefits were clearly communicated, he said, so employees knew what services were available and how to access them.
Many would like to see better use of technology across the industry. Beckett Financial Services director of employee benefits Tracey Gloyne said benefit platforms can help employers navigate different protection products and the embedded range of support services.
“These platforms are invaluable, but we need to see more innovation at the SME end of the market to bring benefits together and give better oversight of these products.”
Consultancy firms that serve the larger corporate market, such as Gallagher, offer their own platform. Lewis pointed out that this was one of the reasons the firm acquired Buck; it now uses the benefit platform it developed with clients.
Other advisers in the room said their SME clients would like to access platforms like this, but unfortunately, they often lack have the budget. “With AI you would think there would be a way to do this cost-effectively,” McLoughlin said. “But to date, this hasn’t happened.”
He said some benefit providers have tried to target this market with a lower-cost solution. But while popular with clients, he said this did not appear to be profitable at present, with at least one of these firms subsequently going out of business.
Data challenge
Benefits platforms can also help generate valuable data, which is useful for employers and consultants when looking to tailor benefits solutions.
A number of consultants pointed out that there is often no single oversight of how employees are using the range of services available on protection and healthcare products. Summerfield said: “We might know the proportion of employees using the GP service offered through a PMI policy, for example, but we don’t know if they’ve used other pathways. If we want to have real meaningful data we need to start being more joined up.”
She pointed out that the data that was available was inevitably backwards-looking, failing to take into account many of the health problems heading our way, for example, rising levels of obesity and potential problems arising from delays for treatment in the NHS.
Isio’s director of reward and benefits Allyson Gayle said better data can also help underscore the business case for protection products in the workplace. “Better data can help clients understand how these different products and support services help when it comes to retention, recruitment, managing absence and building a happier more productive workforce.”
Gloyne said in an ideal world she’d like to see an industry-wide solution, akin to the pensions dashboard. Others suggested that rather than have a plethora of apps from different insurers and third-party providers, it would be simpler if there was a ‘universal app’ that clients could offer their employees.
Communication challenge
Neither option looks likely to happen anytime soon though. In the meantime, consultants said there was a need for better communication and education. This is twofold: on the one hand, it is to ensure consultants can help employers understand the value of the product, and the potential benefits it can deliver.
But this communication strategy also needs to extend through to employees, so they have a clearer picture of what services are offered and how they access them.
Summerfield said it is important to communicate in terms employees understand. “No employee is thinking ‘I’ll go and look at what wellbeing services might be available under a group income protection policy’. They don’t think like that. They are thinking ‘I need a GP appointment’, or ‘I’m having financial difficulties is there anyone I can talk to’. We have to go back to this end user and think like a consumer, and engineer platforms so it’s easy to access help when it is needed.”
Towergate’s principal health and wellbeing consultant Paul Bridges said communicating the value of these protection benefits to employers can be a challenge, particularly with costs rising. “It can be very challenging for businesses themselves to really understand these benefits and the value they deliver.
“Consultants have an educational role in current conditions, helping clients understand that making products more accessible is going to drive up costs, so they need to prepare for that and increase budgets accordingly.”
Policy evolution
Many on the panel agreed that protection policies were evolving in new ways. This goes beyond the range of digital support services now available. Insurance and healthcare products have evolved, in part due to the
difficulties people have had accessing NHS and primary healthcare services in recent years.
Summerfield pointed out that PMI products didn’t previously cover chronic conditions but these are now available on some policies. Canada Life head of sales, protection Matt Pincott said that insurance products are also evolving. “Across the risk and healthcare industry, we are taking a more holistic approach, particularly when it comes to prevention.”
Keeping employees healthy is an important element of delivering a return on investment for employers, as well as providing a range of services for when people fall ill, added Canada Life marketing manager Camilla Murphy. Insurers are also becoming more targeted with treatment pathways for common conditions, be it musculoskeletal problems or mental health. “This approach can deliver more cost-effective solutions, but also better outcomes for members,” said Pincott.
“The question is what is next for the industry, how can we up our game in terms of prevention, and how can we scale up those solutions without having a negative impact on future pricing?”
Simplyhealth product director Tina Kennedy agreed that prevention was important, but she also made some important distinctions as to where group protection and healthcare policies can help.
“In the clinical world, you have primary prevention, which is about ensuring healthy people don’t get sick. Then there’s secondary prevention, which I think is potentially a big issue in the workplace. This is where an employee has a problem, but you don’t want it to get worse.”
She gave the example of an employee with a back problem, where timely access to specialist help can prevent this from becoming a more serious issue necessitating prolonged absence or leaving the workforce altogether.
Cash plans have historically largely been involved in primary prevention, offering contributions to ‘everyday’ healthcare services, such as dentists and opticians. Simplyhealth is evolving its product to offer a degree of help in this ‘secondary prevention’ space. It is not offering insurance cover for medical treatment, as you would get on a PMI policy, but instead using its position in this market to help people navigate the self-pay market, and potentially offering discounts on treatment.
Kennedy said: “There has been a huge rise in the number of people paying for private medical consultations, treatment and procedures. Last year, the self-pay market stood at £2.7bn.”
Kennedy said Simplyhealth plans will provide a “directional” service, guiding members towards clinically validated self-pay services. “This is about helping people access this market with more confidence, not an insurance solution,” she added. But given Simplyhealth’s ability to bulk-buy services, it says it hopes to be able to offer discounts on some of these treatments.
Kennedy said the plan is to launch this new service later this year. Advisers were broadly supportive of this initiative, with most saying they didn’t see a direct threat to their business, despite the provider communicating directly with members.
Gayle said such an approach is likely to resonate in the mid-cap market. “This sector of the market has its own challenges but the end user, the employee, ultimately benefits from the employer, consultant and providers all working more closely together.”