Brokers need to start thinking outside of the box when it comes to health insurance - that’s the stark message from Gavin Shay (pictured), distribution director at Equipsme.
Speaking with Insurance Business following the release of a recent report which underscored the financial incentive of firms offering robust health insurance coverage, Shay noted that businesses are facing unique challenges, and traditional PMI isn’t always flexible, cost-effective or sustainable enough to meet them.
“If a general insurance broker isn’t asking their clients about health insurance and what are they doing for the wider, uninsured employees, there’s a high chance another broker or specialist medical distributor is,” he said. “Having access to a cost-effective solution is a way of supporting your clients’ needs but also ensuring they don’t walk into the open arms of another broker who does.”
Offering an update into some of the trends shaping today’s health insurance market, Shay highlighted how increases in demand, use, and general medical costs, together with a long history of dual pricing, mean some businesses are seeing the cost of their policy go up by 20-30% at renewal for a second or third year in a row. With belts and budgets tightening everywhere, that’s simply unsustainable, he said.
Many organisations are rethinking their benefits strategy, he said, looking for more cost-effective solutions - and more equitable solutions, too. They want to be able to do more for more of their workforce. “That’s being driven by the crisis in the NHS, as organisations look for new ways to support health more widely, keep people working – and get them back to work faster after illness or injury. UK productivity continues to decline but forward thinking, people-first businesses are investing in their biggest asset – their people.”
As to whether these trends are being reflected in increased appetite from general insurance brokers to explore the potential presented by the market, he noted there are always some brokers who won’t touch health insurance, whether due to the spiralling cost or the technical, medical nature of the product.
“But every challenge is also an opportunity,” he said. “With so many businesses out there looking to their trusted brokers to help them find solutions to the problem of increased demand and decreased budget, there’s a real opportunity to step in and offer something that’s different to the usual suspects.”
For brokers, he said, the key is being able to access solutions that are easy to understand, easy to cost up, and easy to implement online. Where products that fit these criteria are available, there’s a great opportunity to offer these to SME customers, for instance, as these businesses often can’t compete with the budgets of larger corporates.
Sharing his advice for general insurance brokers looking to access this market segment Shay noted that, when going into any new market, the first thing to do is always to ask your audience what it is that they want. “The answer we get again and again from businesses is threefold,” he said. “They want to do more for more of their workforce, they want to be sure they can keep doing it for the medium to long term, and they need to be able to make a watertight business case to put in front of their boards.”
More than ever, he said, that return-on-investment piece for health benefits is the “holy grail” for HR teams – and for brokers. Senior decision makers need compelling numbers - not vague promises of improved engagement, or best guesses at future costs. For brokers that means working with providers that are simple and transparent in their pricing, and able to evidence that clearly.
