In the war to attract talent to businesses, group risk benefits serve their primary purpose well as retention and attraction tools, says Paul Avis - but only when these benefits are actually communicated
As an industry, group insurers tend to hide their light under a bushel. While product terms and conditions, service, medical underwriting, Financial Ombudsman Service referral volumes and upheld rates and so forth play a part in an adviser's choice of which contract to purchase from which insurer, is this what the customer really wants?
I met with an adviser recently who confirmed they had majored on the lack of medical underwriting with group schemes - thanks to ‘free cover limits' - for their marketing campaign. They were shocked when people they spoke to said they did not realise there was no medical underwriting for these benefits. The adviser had clearly misunderstood the employer need - to understand what the product does and the personal and business benefits it brings, not the product features themselves.
The massively valuable fact that even those with current health conditions can obtain cover if they are actively at work was a technical argument to buy the benefit, with loadings only being applied to benefits over the free cover level, unlike individual benefits, which are fully medically underwritten.
Where the customer is an employer, and not an individual, what do they want? Traditionally, benefits have been purchased to allow employers to gain and retain the right people, but what else should organisations be considering when buying benefits?
This is as relevant as ever. In the war for talent, group risk benefits serve their primary purpose well as retention and attraction tools, but only when communicated.
There are plenty of facts that can give employers a clear message of value for their employees. Only 2.1m people are covered by 17,111 group income protection (GIP) schemes in the country. According to Swiss Re, group critical illness is even more exclusive with only around 3,000 schemes covering around 550,000 people.
Sticking with the financial dimension, in a period of increasing inflation and low wage growth, then how about extra benefits for each employee without increasing costs for the employer? This is where support services step in. When communicated in addition to the financial products, they have the potential to increase employee engagement
The merits of support services do not just stop at financial benefits for the organisation. Any insurer can pay a cheque, but in the group market it is what else is provided alongside paying claims that is valued by employer customers.
Research by Canada Life shows what are known as ‘early intervention services' (EIS) pose significant benefits for complex absences. If used from day one, it can resolve 93% of referrals without an employer having to claim on their GIP policy.
In addition, employees who engage with EIS have an average absence duration of seven weeks, which shows return on investment by reducing occupational and statutory sick pay while benefiting human resources and management time, Equality Act (2010) compliance and so on.
Many support services extend beyond employees covered by the insurance. Packages that provide clinical certainty cover not only insured and non-insured employees under GIP, but also their immediate family members.
Imagine your child or your partner was diagnosed with a serious condition. Would you want to know for sure their diagnosis and treatment were correct? At a personal level, an employer supporting an employee with a sick child or partner not only shows compassion for the situation, but can also enable an employee to return to work quicker, if they have been absent to care for their loved one.
Organisations benefit too. Employees focused on issues outside work are less productive and so the peace of mind of knowing someone you care about has the right diagnosis and treatment should not be undervalued. A further financial benefit is that when trust-based private medical insurance schemes are in place, claims amounts and durations of treatments are usually reduced.
Group risk providers have employee assistance programmes, probate helplines, bereavement helplines, personal nurse adviser and treatment sourcing services (for those not insured under medical schemes or for family members needing treatment) to name just a few - all of which aim to support employees should they encounter difficulties during their working lives.
While these help employers depersonalise external situations at the same time as offering support, they - as the paying customer - should not be forgotten either.
Online and telephonic legal support services, which are often included in premium packages, can offer additional support. This helps to produce things such as staff handbooks and contracts of employment, all reviewed by solicitors, as well as health and safety, legal tools and briefings on topics such as redundancy and protecting intellectual property, saving legal costs.
When aligned with telephone support and document review, such services ensure businesses are compliant when dealing with employees, which is the right thing for everyone.
In summary, then, the customer for group insurers is the employer but that is not to say insurers in this space do not support employees and family members. They actually provide much more support than many individual insurance policies when life circumstances change.
Support service packages clearly also serve a business need, however, and this combination leads to a rounded employee support package that clearly exceeds the simplicity of the financial benefit alone. Often, this is much more important should the worst happen.
Paul Avis is marketing director at Canada Life Group
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