What does the Covid-19 pandemic mean for international benefit strategies?

Need to know:

  • Digital benefits and online platforms are set to increase as more employees around the globe work remotely.
  • International demand for health and protection benefits is up, with a focus on wellbeing and lower-cost options.
  • Different experiences of the pandemic mean local benefits solutions are important.

With the Covid-19 pandemic forcing much of the world into lockdown this year, significant changes are expected in international benefits strategies.

Carl Redondo, leader of Aon’s global benefits practice in the UK, says: “There was a lot of panic in the early days with questions around exclusions, emergency childcare and so on. A few months in, things have calmed down and global heads of benefits are looking at the structural changes they’ll be making over the next couple of years.”

Significant change is expected to accommodate the new normal. As well as less business travel, remote working is expected to continue wherever possible, into 2021 and beyond.

Flexible benefits in demand

This shift will see an increased focus on flexibility, as employees find themselves better able to balance home and work responsibilities, but also more demand for digital services. Paul Avis, marketing director at Canada Life Group Insurance, says: “Employees working from home will expect online benefits platforms with full functionality.”

The demand for digital services will be particularly high around health and protection. Kevin Melton, sales and marketing director at Axa Global Health, says: “During lockdown we saw a significant increase in our online mental wellbeing benefits and our virtual doctor service, both in terms of utilisation and registration. These will remain important, especially as so many people feel nervous about visiting a GP surgery.”

The nature of the pandemic means the role of health benefits is likely to change in other ways too. Avis expects to see more demand for cover, pointing at the government’s decision to introduce a £60,000 life insurance scheme for front-line health and care workers as an example. “People are more aware of their mortality but also their morbidity,” he adds. “Health benefits will be popular.”

While demand may be up, benefits professionals will also be looking carefully at how the pandemic affects underwriting conditions, with more claims expected, says Redondo. “Fears about going to hospital during the pandemic means a lot of people put off health problem including serious ones such as heart attack and cancer,” he explains. “Add to this all the musculoskeletal issues due to being hunched over a laptop for a few months and the mental health problems, there could be a spike in claims across all health benefits.”

Premium increases coupled with financial pressures on employers will lead to benefit rethinks. there may be more shared responsibility approaches on private medical insurance (PMI) as well as limited payment terms on group income protection schemes, says Redondo.

Wellbeing is also likely to come to the fore, especially as Covid-19 makes people more aware of the importance of being fit and healthy. “Looking after employees’ wellbeing is increasingly regarded as part of an employer’s social responsibility,” adds Melton. “There’s been a lot of talk about wellbeing but I think there will be more shareholder pressure to implement these benefits.”

Consistent benefits offering

Differing experiences of the pandemic will also drive change in international benefit strategies, with a shift away from the one-size-fits-all approach, says Sarah Dennis, head of international at Towergate Health and Protection. “Some benefits will go more global, for instance, we’re seeing more demand from multinationals for global employee assistance programmes (EAPs) so that all their employees have access to a consistent service,” she explains. “However, where it used to be common for organisations to mirror the benefits available in the UK, we’re seeing more local solutions.”

For example, while a corporate Covid-19 antibody test might be well received by employees in the UK or US, this would be less relevant in countries such as South Korea, Germany and Canada where robust track-and-trace provisions are in place.

But, with the pandemic driving change in everything from where employees work to the benefits they expect and appreciate, Covid-19 has certainly left its mark.

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