Unexpected factors are shaping group risk insurance in our post-pandemic world, leading to shifts in employee benefits, with employers and employees enjoying more choices than before.

Our Big Business Insights podcast host, Blessing Utete, Managing Executive at Old Mutual Corporate Consultants, asked Mariaan de Jongh, Old Mutual’s Group Assurance Business Executive, to outline some of the trends and how both employers and employees should respond to them.

Q: What are the key trends, from an employee benefits perspective, especially when it comes to risk benefits?

A: Since the pandemic, employers have been forced to look more carefully at risk benefits to determine if they are still adequately meeting the needs of their members. While mortality risk has stabilised since the pandemic, we’ve seen more mental-health-related claims on the disability side, which has led to a greater focus on wellness. Employers are engaging with insurers and specialised service providers to access wellness offerings. They are also supporting claimants in going back to work.

Death and disability products are comprehensive and flexible, so not much has changed in this regard, but what has changed is the value placed on these benefits and the extent to which employers and employees engage with them. Employees are more aware of the benefits and are keen to get the most out of their benefits packages, so in response, insurers have become more focused on improving the customer experience.

Q: Since the pandemic, one would expect that there’s been a focus on the pace at which claims are settled. What is your comment on this?

A: Many insurers have focused on increasing the levels of automation in their processes since the pandemic, with regard to the speed at which claims are processed and paid. Insurers are also increasingly focusing on the frequency and quality of communication with members, as opposed to just engaging with the employers and funds.

Q: The current almost ‘cafeteria-like’ system allows employers and employees to choose multiple versions of employee benefits, particularly on the risk-benefit front. What does this look like in practice?

A: Since the pandemic, there’s been greater interest in flexible risk benefits as employers reconsider benefits packages. Employees can select a package of benefits to suit their needs within a specific budget – for example, a young single person with no children can decrease their death cover but increase their disability cover.

This dynamic system allows employees to adjust the level of cover to suit their changing needs, such as increasing their risk cover if they buy a house. As a result, employers allocate a certain budget to risk products but will also provide a pool of benefits that are customised to meet the needs of each employee, rather than everyone getting the average benefit.

This system dovetails well with the increased awareness from employees, and through enabling them to engage directly with their risk benefits – what they have and what they may still need – this ultimately contributes towards improved financial wellness.

Q: When putting such a package of benefits together, what should an employer consider?

A: Group risk benefits can be quite complex and there are a lot of options available. The most important consideration for an employer is to select the benefits that will best suit the needs of their particular employees. In this case, the value of a good risk-benefit consultant can’t be underestimated and access to good financial advice is critical.
Q: Flexibility is a key part of an employer’s value proposition to employees. From an organisational perspective, how can an HR team manage this?

A: Flexible risk benefits can help contribute towards staff retention. There’s an onus on employers and insurers to create an environment of understanding, which can be achieved by including a risk benefits module as part of induction training, for example, or through various other sources.

Other information can be made available on an employer’s intranet, such as videos, which can be supported by emails and regular communications that remind employees of the choices available to them.
Q: Why are funeral benefits such a strong value proposition within group risk benefits, and are employees generally aware of their real value?

A: Funeral policies meet a very real and specific need, which is financial support for members and their families at the time of the death of a loved one.

Unfortunately, we do see instances of members purchasing multiple funeral policies. This shows that the importance and value of the product are clearly understood, but they could be unaware of the group risk benefits that they may already have in place.

Regular communication is important to increase awareness and ensure members know of all the benefits they have. Companies should consider how they communicate these benefits. For a white-collar scheme, email is appropriate as employees are largely desk-bound, but blue-collar scheme members may not check their emails regularly, so consider other methods of communication, such as flyers, posters or physical announcements. It may be most effective to use a mix of all these methods.

Employees need to know that a family funeral policy covers not only the main member, but also their spouse and children – addressing the funeral needs of the entire family. Where the financial obligations of the family extend beyond the immediate family, these policies can be further expanded to cover grandparents, aunts and uncles as well.

A key benefit of these policies is that they pay out very quickly, often within 48 hours, to ensure that the funds are available to meet immediate obligations. They are also not underwritten so no medical underwriting is required, and cover won’t be capped.

And while individually purchased funeral policies are often sold with a waiting period, a group risk funeral policy, where cover is compulsory for all employees, has no waiting period.

Listen to the full conversation between Blessing and Mariaan here.