Changes are occurring in the UK employee benefits market, according to John Dean, Managing Director of Punter Southall Health and Protection and Cheryl Brennan, Director of Corporate Consulting.
What new trends can we expect in 2018?
1. Insurance companies will evolve more into ‘Wellbeing Companies’
John Dean said;
“Insurance companies will evolve into wellbeing companies. While traditionally Insurers have concentrated on premium rates and insurance terms, their focus will change. They will provide wider support and offer new propositions to customers including data analytics and wellbeing services, not just insurance.”
2. A demographic ‘tipping point’ that is driving change in benefits
Cheryl Brennan said;
“We are at a demographic tipping point. For UK employers the biggest risk is our ageing workforce and the expected increase in comorbidity. In a 2012 research study[i], the National Council of Compensation Insurance (NCCI) looked at the impact of comorbidities on workers’ compensation claims. It found that the percentage of workers’ compensation claims with a comorbid diagnosis, such as diabetes, hypertension and obesity, increased from 2.4 percent to 6.6 percent between the years 2000 and 2009. We expect this trend to continue.
“Comorbidity risks present themselves to employers through higher absence rates, longer absence durations, more complex medical treatment and insurance costs.
“Employers will need to reduce the risk of comorbidity by tackling and reducing exposure to conditions such as Type 2 Diabetes by promoting health and wellbeing.”
3. Will the increase in part time workers lead to insurance benefits not being linked to salaries?
John Dean said;
“The number of people doing the standard 40-hour work is falling. According to Reed Job Index[ii] part time job opportunities have risen to a three-year high. This makes it complex for companies to work out the costs of their benefits. With flexible and part time working on the rise, employers will be looking to simplify things and we are likely to see more flexible benefits such as ‘lump sum’ life insurance being offered rather than companies linking benefits to salaries.”
4. Mobile-enabled ‘In your pocket’ health services will grow
John Dean said;
“Advances in technology will enable employees to access benefits anywhere, at any time and on any device. We’re seeing a big growth in ‘in your pocket’ GP services and blood pressure diagnostic services. These services are here to stay so all suppliers will need to ensure their services can be mobile-enabled.”
5. Could more health data change the insurance marketplace?
John Dean added;
“The growing availability of health information and the rise in health screenings, DNA testing and genetics testing is making us a more knowledgeable society. Soon we will be able to check our propensity for any potential future illnesses. This knowledge presents a big challenge to the insurance industry as possible buyers will already know their propensity to become ill. Insurers will have to adapt to these changes otherwise premiums will have to rise substantially.”
6. More focus on prevention and support for employees
John Dean concluded;
“Currently, employee benefits programmes focus on supporting those who are ill or dying. In the future programmes will focus increasingly on wellbeing – providing solutions for the majority, rather than just those who are ill. There will be greater concentration on keeping the healthy well rather than simply paying for the ill.”
7. Employee benefits for employees of all ages
Cheryl Brenan said;
“Managing the polarised needs of multi-generational workers will be another challenge this year. The needs of 20-something employees are very different to the over 60s and ensuring the design and delivery of benefits is relevant for each age group will be vital.
“We could see companies providing greater financial support to help younger workers get a foot on the housing ladder or benefits such as home help services to support employees looking after elderly parents or companies offering childcare services in greater depth – this will be an interesting area to watch.”
“Technology will play a huge role in delivering benefits and no longer will it be about what are the most cost-effective benefits for the employer, but what delivers the most value for their employees,”