Group risk trends at a glance


Key points:

  • As big data rises up the agenda, a uniform approach towards data gathering and sharing will enable employers and industry to make the most effective use of the insights it can offer.
  • Services that support the changing needs of employees throughout their working lives could help to address the widening age range within the workforce.
  • Measures to counter critical illness could help employers support an ageing workforce.

The development of technology, lengthening age demographics within the workforce and an increasing number of workers retiring later in life have impacted what employees and employers require of benefits; so how is the group risk industry developing to meet these shifting needs?

A move towards big data

Technological advancements that have been made in recent years have helped to facilitate the collection and sharing of data, explains John Matthews, partner at Mercer Marsh Benefits.

“There is undoubtedly a movement towards sharing more data, but it comes back to being able to interpret [that data] and being able to make some sensible recommendations on the back of that interpretation,” he says. ”And that is where the best advice will come from, whether it’s from an insurer, an adviser or from within the employer community itself.”

While technology may have led to an increase in the amount of data available, there is scope for a more coherent approach to how this data is used. John Attley, engagement manager at the National House Building Council (NHBC), explains the difficulty in piecing together different data sets and of finding reliable benchmarks. “We have an understanding of our absence pattern but it doesn’t always necessarily line up to our claims experience, so how can we use one to predict another? There are all of these bits of data that don’t have that connectivity and very rarely do they point in the right direction.”

An enhanced level of anonymised data sharing within the industry could widen the data pool, thereby increasing the reliability of insights drawn from it. However, in order to make the best possible use of data, simply having large quantities of it is not enough, says Tom Gaynor, employee benefits director at MetLife UK.

“We often talk about big data, but I think actually we are at the stage where there is just lots of data,” he says. “Big data implies that it is organised and we are drawing enough out of it. But we are not getting enough out of the data yet and I think one of the things that would aid us to do that is better sharing of data.”

For example, this could involve group risk providers working more closely with private medical insurance (PMI) providers to establish a clearer pathway of understanding as to whether or not an employee’s condition may result in a claim, as well as what measures could be taken to accelerate any treatment required, helping to control costs and delivering a better outcome for employer and employee. “There is a need for some uniformity around how data is dealt with and therefore understood for the benefit of the employer and employees,” Gaynor adds.

While there may be challenges around anonymised big data, such as questions around ownership and willingness to share information sets, it can also be harnessed to demonstrate the positive impact that group risk benefits can have on an organisation and its staff. This could include revealing the link between early interventions and a reduction in long-term absences, and the return on investment group risk benefits can bring.

Mercer Marsh’s Matthews says: “The more you can prove the interventions you put in place through data, the easier it’s going to be for employers to be able to take [benefits] up to finance directors and make the case for them.”

Sourcing insights

Wearable technology is one of the methods that could be used to gather data and provide employers with insights that could help inform their benefits strategies. In the future, perhaps wellbeing could be linked with performance targets measured through devices such as wearables. Gaynor asks: “It might be a crazy idea but are we approaching the day when [an employee’s] personal wellness becomes part of their key performance indicators [KPIs]?”

While this proves to be a controversial notion and there is little indication that it would be embraced by employers or employees any time soon, there is consensus among the roundtable participants that devices such as wearables and mobile apps should be embedded within a wider health and wellbeing strategy in order to elicit long-term behaviour change. Katharine Moxham, spokesperson for industry body Group Risk Development (Grid), says: “If you can get someone to change their behaviour then the job is half done.”

Challenges and gamification are one means of encouraging employees to engage with benefits, whether they be health and wellbeing related or otherwise, says Lee Gruskin, principal consultant at Capita Employee Benefits. This approach can be particularly popular with the younger generations in the workforce.

NHBC’s Attley adds that challenges around health and fitness can be an effective way of encouraging staff to take part in initiatives but such campaigns can sometimes have a short shelf-life, requiring a constantly new and fresh approach. He explains: “It’s got to be different the whole time, you can’t stand still on this sort of thing.”

Providing wearable devices and technology to enhance staff fitness must also involve fostering a culture in which staff have the time to use them. “It’s all very well having a wearable device but it can actually be more demotivating than motivating if [staff] can’t pop out at lunchtime to use it because they have too much work to do,” says Gaynor. “It’s about what people deliver rather than when and where they are; a culture of delivery rather than presenteeism.”

Gaynor sees wearable technology as having a place within wellbeing strategies but argues that it does not offer employers the breadth of data required to increase understanding of their staff and why they may be absent from work. “There’s nothing that is going to be a substitute for really good, impartial research that demonstrates the things that employees are worried about, what can be done about them, and how to communicate it,” he explains.

He adds that there are a number of research studies that have been conducted that are relevant for employers. “This information does already exist, we have just got to make sure that the right people are reading it.”

The widening age range in the workforce

According to the Office for National Statistics’ National life tables 2012-14, published in September 2015, men and women aged 65 are expected to live a further 18.4 and 20.9 years, respectively. This compares to a life expectancy of 13 years for males and 16.9 years for women aged 65 in 1980-82. Increased life expectancy trends, of course, have a knock-on effect on the length of employees’ working lives, so employers are increasingly having to consider the needs of a growing number of older workers and the wider range of ages that make up their workforce demographic.

“Trying to keep more people at work rather than absent from work is a key feature going forward for the ageing population,” says Matthews.

Gruskin adds: “We’re seeing a lot more people in the workforce having to work with chronic disease and, what with the increase in insurance premium tax, we may see larger firms looking to put in healthcare trusts and maybe use their money there to help with chronic illness and keep people in the workplace, because a lot of people are spending time away going to consultations to address chronic health issues.”

He asks whether these changing requirements could be met by introducing life insurance with a critical illness rider into the group risk space.

MetLife’s Gaynor highlights the use of similar products offered outside of the UK, particularly in the US, so the group risk industry could look to international markets for ideas that could be tailored to meet local needs.

A more holistic approach to support the needs of staff throughout their lengthening working lives could also help employers to meet the challenges posed by the ageing workforce and the multiple generations of employees. “We need to look at an approach that is more around looking after staff for a whole host of things through their general wellness journey, whereby there is a whole range of age-appropriate services available to them throughout their career,” says Gaynor.

Employee-driven innovation

The growing availability of technology could drive employees to seek tools that help them take control of their own affairs, which could position employers as facilitators of access to these tools. “I think we will see more services being aimed directly at employees, possibly through the employer,” explains Matthews. “The knock-on effect of that back-up is that the employer would need to recognise that there are services that would benefit it as an organisation if it becomes a conduit for those services, whether that be giving everyone a wearable device, or giving them an app that allows them to take control of their finances or their health.”

Overall, innovation within the group risk benefits field should be driven by the requirements of the workforce. As Gaynor says: “We need to do more listening to employees and employers about what it is that makes an organisation tick and what it is that employees would value and therefore help them to be more engaged, happier at work, have more energy and better wellness.”