The pandemic forced many of us to think about ‘what if the worst happens?’. What if we or our loved ones get sick, or we lose our job, or even die before our time?
While, thankfully, those fears may have eased for most of us, others are now jostling for position. How secure am I financially against a volatile economy and rising costs and interest rates? Will an NHS in crisis be able to give the care we need when we need it?
These drivers, perhaps unsurprisingly, have led more and more employees to look to their employers for help and support, in particular the ‘safety net’ of having access to group risk benefits such as income protection, life assurance, and critical illness insurance.
Bolt-on services
In fact, UK group risk market premiums reached a record high in 2022, exceeding £3 billion for the first time, according to insurer Swiss Re’s regular Group Watch report. Importantly, however, it is not just having access to the core insurance products that is becoming increasingly valued by employees. It is what we might once have called the ‘bolt-on’ services that come packaged within these products.
As Rus Waygood, sales manager at Canada Life, explains: “If you went back maybe five or six years, you would probably have had bereavement counselling within a group life policy or perhaps a probate helpline. But that would probably have been it.
“Now we see virtual GP services, mental health and wellbeing support, access to nutritionists, debt counselling or support, life event counselling, support around burnout prevention; it can be a very wide range of services.
“The way group protection is viewed by clients, how it is positioned, has changed quite dramatically; a lot of these value-added support services have gone from being nice-to-haves to must-haves,” he adds.
Equally, research by Group Risk Development (Grid) in July found that access to financial support in the event of ill health, disability or injury, and financial support for dependants are now considered important by fully three-quarters (76%) of employees.
“At the start of the cost-of-living crisis, many group risk providers started to accelerate the provision of other benefits to help people. So, it might be webinars, guides or other tools on their website,” points out spokesperson Katharine Moxham.
“It might be ensuring a particular group risk product now comes with a debt consolidation service or discount vouchers or a pay advance scheme. All of which can be helpful when people are struggling financially,” she adds.
Research by Towergate Health and Protection, too, has identified growing use of EAPs for advice on legal matters, divorce, childcare, housing, disputes with neighbours and wills, as well as supporting health and wellbeing.
“In a way, what we’re talking about now is not a group insurance proposition as such but a group benefits proposition, of which insurance could conceivably in time become the minor part,” forecasts Ron Wheatcroft, technical manager at Swiss Re.“The group risk product just becomes the mechanism through which the services are delivered. The insurance product will still of course be an important part of it, but the whole emphasis has changed,” he adds.
Perception and communication
This shift is also changing how group risk products are perceived and, crucially, communicated, as Moxham highlights. “It is no good having these benefits and your people not knowing how to use them. So, it is important to be communicating in different ways little and often. It is about ensuring these benefits are front of mind when somebody needs them,” she says.
Finally, this makes the expertise of the benefits or reward professinal in terms of being able to navigate, and get maximum value from, this increasingly complex market even more critical, advises Paul White, head of technical at Howden Employee Benefits and Wellbeing as well as chair of Grid.
For example, a free EAP that simply gives advice and sends an employee on their way might be of less value than one that signposts and directs people to other resources within and outside your organisation, such as your private healthcare or income protection schemes, he points out.
“So, it’s not so much just a question of ‘oh this is a free added extra, great’, it’s how does it dovetail with everything else that I want to do? Ultimately, it is about understanding what the corporate entity is trying to do rather than simply meeting an immediate short-term need,” White recommends.
Cast study: Three
With some 4,400 UK employees broadly split 50/50 between office-based and customer-facing roles, telecoms company Three has long focused on providing a comprehensive range of both group risk and other employee benefits.
Benefits include, among others, life assurance and critical illness for employees (with the option of covering partners), 75% income protection, a 4.5% employer-contribution pension, private healthcare through Bupa, a dental plan and health assessments through Nuffield Health, a buy-and-sell holiday scheme, cycle-to-work scheme and extensive staff discounts.
Since the pandemic, the company has seen a marked increase in take-up of, and interest in, its benefits, explains Priyanka Jaiswal, director of people, proposition and reward. “Our private medical, our cash plans, a lot of our risk benefits – all of them – suddenly, went up as we came out of Covid. Private medical take-up is 15% higher, dental 12%, health screening 67%, the medical cash plan 45%,” she says.
“A lot of our people used to wait for big issues to arise before using the medical plan; not anymore. Now, even if it is just a blood test, they are looking for our medical benefits to support them. We are seeing very high take-up on healthcare benefits right now,” she adds.
Take-up of financial wellbeing tools, such as the Nudge financial education app, has also increased. “We offer money management seminars and financial advice, including one-to-one advice, through our partners. We upskilled our mental health trainers as well to be able to address questions around financial security,” Jaiswal says.
Alongside this, the company has recognised that cost-of-living support has to go beyond just benefits. So, it has brought all employees above the Living Wage Foundation’s ‘real’ hourly living wage (excluding the up to 25% commission retail employees can earn).
“The key for reward and benefits professionals is to recognise that you can’t take a cookie-cutter, one-size-fits-all, approach anymore. You need to be regularly interacting with employees, staying connected to them, understanding their changing needs, and enhancing your benefit offering,” Jaiswal advises.
