In April, financial services firm Towry removed private medical insurance (PMI) and travel insurance from its flexible benefits scheme after rising premiums, which were paid for by staff using their flex allowance, made it no longer viable.†
Richard Higginson, head of reward at Towry, says the benefit, which was taken up by 100 of the firm’s 800 staff, was chosen mostly by those who had a high risk of illness, which increased the number of claims.
“Our premiums were huge when we only had 100 people with a poor claims history,” he says. “We got to the point in April where had we renewed the policy under the flexible benefits plan, it would have been cheaper to phone the same insurance company and buy a retail product.”
Towry plans to reintroduce PMI as a core benefit for all staff in 2013.
Employees will be given the option to add a partner or family members to the plan through the flexible benefits scheme. Although it will cost the firm more year-on-year to provide the benefits, the premiums per head will be lower. Because of the increase in numbers, the risk will be spread more evenly.
Towry hopes this move will mean that the premiums will be £500 a head or less, compared with £1,000 a head if it had renewed its previous policy.
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