Do group risk benefits need a makeover?

Makeover

Need to know:

  • Employers and providers might want to consider re-branding group risk benefits to help clarify the purpose of each product.
  • A multi-media communications approach, using digital, paper and face-to-face communications, is best for ensuring engagement.
  • Employers should strive to increase take-up and awareness of value-add services to impact employee absence, presenteeism and absenteeism.

Take-up levels for group risk benefits tend to be relatively steady. According to Group watch 2018, published by Swiss Re in April 2018, nearly 12.5 million individuals were covered by group risk schemes at the end of 2017. This is only a 3% increase compared to 2016.

This steadfastness might be seen as a positive, but considering the rapid pace of change constantly underway across the rest of the benefits spectrum, the staid nature of group risk products might be a warning sign rather than a reason to leave them be.

So, are group risk benefits ripe for reinvention, or would this just be re-creating the wheel?

A new name

Firstly, employers and providers should consider re-naming group risk benefits, to help ensure that employees truly understand what is on offer, says Paul Avis, marketing director at Canada Life Group Insurance.

Research by Canada Life Group Insurance, published in January 2018, pinpointed some alternative options, as 37% preferred ’employee life insurance’ or ’employee death benefit’ to ‘group life assurance’, 43% want to use ‘long-term sickness salary‘ instead of ‘group income protection’ and 50% feel ‘serious illness support’ is better than ‘group critical illness’.

“A simple job is to re-name them so that employees can understand them,” Avis explains. “The products are actually not that complex. The complexity comes from giving the customer flexibility. Perceived complexity in group risk is actually giving customers choice.”

Minimising complexity

Cutting out confusion when it comes to group risk benefits starts with education and communication, says Avis.

This includes implementing a multi-media communications approach, which might feature videos, branded rate tables, announcement letters and claims guides, as well as hosting benefits fairs, sending documents to employees’ homes and conducting face-to-face briefings. Employers could also use table-top communications for managers and supervisors, to remind them to utilise early invention services provided with group risk benefits to help reduce employees’ length of absence.

Another way to strip out complexity would be to have an annual document or total reward statement. This would clearly define and separate out the financial aid that these benefits can provide, demonstrating their value alongside an employee’s pay packet.

Adrian Matthews, employee benefits director at MetLife UK, says: “How many [organisations] go out there and proactively remind employees, on a regular basis, that this is the value of their salary, this is the value of their pension contributions, this is the value of their group life?

“Some sort of annual statement of the value of employee benefits would be great. It would be relatively simple as well. Anything to heighten the awareness.”

Utilising additional services

Many group risk packages now include value-add services, such as an employee assistance programme (EAP), second medical opinion service, eldercare support and online or telephonic legal services. These are often provided at no additional cost to the employer, and employees can typically use them without having to make a claim.

The UK, in particular, has been a pioneer in terms of introducing early intervention services, says Damian Ross, regional manager, UK, Ireland and Nordics at Generali Employee Benefits Network.

Therefore, one area that could be subject to an overhaul is employee awareness and take-up of these extra services.

“We need to see employers, intermediaries and providers working in a transparent partnership to ensure that all the services that are provided are maximised, which will hopefully help improve [employee] absence, recruitment and retention,” explains Ross. “There’s a need for this tripartite working relationship which I don’t think is fully there.”

This approach might involve changing employees’ perceptions. For example, requiring counselling has, in the past, had negative connotations.

These embedded services could also help employers reduce their benefits spend. If an organisation is already paying for a separate service as part of its health and wellbeing strategy, it could switch to using the value-add service instead.

“It’s about joining the dots and making [sure] the services [are used], and watching the feel-good factor spread among employees as part of an employee engagement and wellbeing strategy,” Avis says. “It’s about tailoring the benefits package to the needs of the workforce.”

This aligns with the wellbeing investment match scheme that Generali operates, in which the provider pays back some of the employer’s premium if it implements a wellness programme.

Innovation

Among the changes facing group risk in the future is the fact that the industry is branching out. Some gig economy employers, such as Uber and Deliveroo, have this year introduced forms of insurance benefits. In addition, many providers are focusing on addressing the protection gap at small to medium-sized enterprises (SMEs), including promoting the potential cost-efficiencies of multi-national pooling.

Matthews even believes that a tax break could be in order to help encourage employers to implement group risk benefits.

Avis says: “[While group risk] hasn’t changed, the version of [group risk], the communications, and the support services available have changed. Our market challenge is not the people who’ve got it; it’s trying to get new people there.”

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