Employers could save up to 20% of the cost of their insured benefits by shopping around for a better deal.
According to research by consultancy Mercer, employers could save between 10 and 15% of their premium costs in cases where the benefits remain with their existing provider, but they can secure even greater savings by changing providers.
The most common reasons employers give for not shopping around are: they reviewed the benefits the previous year, they are using a provider they like and have been with for a long time, or they do not have the internal resources to commit to a benefit review.
While the most significant insured benefit costs are incurred through a small range of benefits such as private medical insurance, group income protection and group life insurance, the research shows that many companies have other costs that can be reviewed including dental insurance, health screening, employee assistance programmes and business travel insurance.
Paul Ashcroft, a principal in Mercer’s health and benefits business, said: “Many organisations are not taking the opportunity to conduct a simple market comparison before signing up for renewals on their insured risk benefits, such as group life, medical and critical illness insurance.
“Employers should take advantage of the genuine year-on-year cost savings that can be made with little effort, and without the need to change their current benefit provision. In cases we have observed this year, some companies have saved over £250,000 by making a simple switch.”
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