Advisers need to wake up to the new world order of Group Risk and start to communicate value as well as price says Canada Life Group Insurance director Paul Avis
With every insurer now offering what are termed additional, added value, third party and in-house service offerings as well as the financial product, advisers need to start communicating these far more proactively and professionally. Advisers may fear they will lose their broking fee if employers, the customers, engage with the services and value them so much that they request no market review – but this view is becoming increasingly outdated.
Why? Firstly, a poaching adviser has a great opportunity to use the service propositions to take the client away completely. This kind of conversation could make an organisation take immediate action: “You are still paying for an employee assistance programme (EAP), when all employees, whether insured or not, can access the service as part of your group income protection (GIP) proposition? We can save you that cost immediately.”
Secondly, these services add value in all sorts of unexpected ways and can add to the efficient running of an organisation on a daily basis. EAPs all cater for formal management and supervisor referral of employees who are in difficulty, thereby defusing workplace and non-work issues and increasing productivity. In catastrophic situations such as a death in the workplace, robbery and other serious scenarios critical incident management from the EAP provider, usually for an additional fee, can be enacted to support employees who otherwise could be traumatised by the event. Some may sue the organisation if they do not get such support and some may be less productive afterwards.
Our own second medical opinion service tells us that up to 1 in 3 service users were recommended a change in treatment and up to 1 in 8 a change in diagnosis. This can have a positive impact on experience-rated medical insurance or trust-based schemes. This is of course contingent on the service being promoted and utilised by employees, and it is worth noting that the Best Doctors scheme offered within our own proposition is for all employees, not just those insured.
Thirdly, with organisational budgets under growing pressure and scrutiny, in response to National Living Wage, apprenticeships levy, automatic enrolment pension contributions etcetera, these support services can be used on a daily basis and so provide value throughout the whole year. Organisations with few or no claims may question the value of group risk but if ‘daily’ value is being experienced this enhances scheme retention and possibly even membership augmentation.
More importantly, direct business impacts can be felt. Most insurers offer vocational rehabilitation and day one absence support in some way, shape or form. For organisations that are feeling the squeeze, the ability to reduce occupational and Statutory Sick Pay, increase productivity and reduce management time managing absence all mean that ROI on GIP is able to be proven.
The fourth financial benefit is that each of these services has a value; there is over £200 of additional service value for a Canada Life group risk critical illness client, per employee. This is important, as when organisations are looking to celebrate and communicate their benefit spend, often for staff at flex selection windows, they can evidence the depth and breadth of their offerings.
For example, around 60 per cent of the group critical illness market is aligned with online and flexible benefits. Being able to demonstrate an additional amount of value can really encourage take up and increase commissions for advisers, and retention of staff for employers as employees can see that personal cover is a lot more expensive if they leave the organisation.
If an organisation is looking to improve its employee health and wellbeing, then a health risk assessment tool can become a cornerstone initiative, once again provided by many group risk providers alongside their GIP products. And so the fifth element, to tie in with what is many organisations’ HR strategic plan, is to offer a free personal health risk check to every employee. This provides a starting point, possibly with collated data, for the process of having a healthier, more productive workforce.
The sixth element to justify the promotion of the support services is that they make the employer and the adviser feel and look good! The impact of rehabilitation support, clearly evidenced by the 7 Families initiative, is massively uplifting. The ability to support survivors on the death of an employee becomes ever more important with State bereavement changes and increases in probate fees. With the alternative to life insurance being crowdfunding of funeral costs, that must be seen as a good benefit to have. With state benefit reductions the feel-good factor is likely to increase.
So if you value your existing client bank and want to keep it; if they are under budgetary pressure to justify the continuation of their benefits and evidence value; if your customers are looking to maximise their benefit spend and visibility to support staff attraction and retention, and you and your clients want to look and feel good, then the financial product is only part of the story. In many ways the support service elements are the more compelling reason to retain and buy group risk.