Corporate life insurance in the structure of employees benefits
We conducted a marketing research “Priorities of employers in the formation of insurance programs in the structure of compensation Benefits” by questioning specialists in compensation and benefits of well-known employers, according to Beinsure review Insurance Employers Tools & Scenarios.
The most active respondents, as usual, were legal entities with foreign capital and socially responsible leaders of domestic business, for whom the compensation package is not an empty formality, but daily painstaking work. And it is the “health” of the compensation package, its relevance, sufficiency and demand, as a guarantee of loyalty and involvement of the staff, that is the object of close attention among the respondents.
In the current conditions, the social package is one of the necessary components of the organization’s management system. But the significance of the social package has escalated in the current economic conditions. And if earlier the role of the social package performed two main functions – attracting worthy specialists and retaining the best employees, now the leading role is aimed at maintaining staff satisfaction and loyalty. Among the respondents are companies headquartered in the capital and the region.
The FMCG sector showed the highest activity (23% of respondents), IT and telecom ranked second, and the financial sector (mainly banks) ranked third. 35% of respondents are companies with 101 to 500 employees.
Field of activity
All survey participants have a compensation package, but only 22% of respondents provide benefits to certain groups of employees.
Based on the data obtained, 7 main trends in corporate life insurance are identified.
Trend #1. Compensation package stability
In 2014, the compensation package for respondents did not decrease, but, on the contrary, for a fifth of the respondents, it increased due to the expansion of insurance options, incl. for corporate life insurance by acquiring additional programs (see US Life & Non-Life Insurance Market: Asset & Investment Portfolio).
On average, the set of benefits for respondents consists of 5-7 components. The “three” of the most popular elements of the package are determined by: payment for mobile communications (almost 94% of respondents), collective insurance (81%) and corporate events (also 81%).
At the same time, from the “corporate insurance” group, approximately 42% of the teams have risk life insurance coverage in a life company.
At the same time, this benefit is the most dependent on the grade, salary level and duration of work in the company.
As before, a small percentage of companies (less than 2%) where the program was historically bought with a certain configuration, for medical riders (such as critical illness, hospitalization, surgical operations with payments according to tables depending on the complexity and type of intervention) are set a fixed amount of coverage for each member of the team, and for the main risk – “fatal outcome for any reason”, a salary ratio is set, which can change during the insurance period, followed by a recalculation of the insurance amount.
Most companies use a unified system for determining the sum insured – a fixed coverage limit, unchanged during the insurance year.
Trend #2. Willingness of potential consumers of risk life insurance services to dialogue with insurers
To the question “What, in your opinion, can deter employers from insuring the life of their team?” the most popular answer is that the current economic conditions and the current budget are hindering. And interestingly, the respondents put the lack of information about the benefits of this social benefit in second place. This gives confidence that the educational work of insurers, insurance and financial consultants will help attract new insurers and raise the social protection of workers and their families to the next higher social level.
At least the majority of respondents who did not have risky life insurance coverage as of the date of the survey are ready for a dialogue regarding the study of the nuances of the possible introduction of such a benefit for their staff over the next year or two.
For this, according to the respondents, the operators of the corporate insurance market need to develop new, individual for each company, insurance products, look for innovative pricing solutions and more actively pursue a marketing policy and explanatory work.
At the same time, policyholders are ready to attend educational events (seminars, master classes) held free of charge by consulting organizations with the invitation of speakers from insurance companies or directly by the insurers themselves with the involvement of experts from related fields.
Such a readiness for dialogue on the part of a potential corporate insured is strengthened when a basic knowledge is obtained that a decent risk life insurance program in the classic version will cost the employer no more than 15% of the VMI budget. And one of the ways to solve the introduction of benefits, along with the lack of a target budget for life insurance, can be co-financing the program, most often in a 50/50 ratio.
Trend #3. Brand awareness of a corporate life insurance provider as a visiting card of the existing sales system
It is important to note that this indicator is not related to the volume of insurance payments, but, first of all, is determined by the proactivity of teams and B2B sales technologies, marketing strategies and explanatory work among non-life brokers.
In terms of brand recognition in the context of risk life insurance, a significant role is played by the belonging of insurance companies to international life insurance pools and the presence of “insurance pairs” (simultaneous presence of life and risk companies in the brand).
The vast majority of policyholders are satisfied with the level of service provided by life insurers and evaluate their work as “positive” or “rather positive”.
At the same time, in connection with the current phenomena in society, policyholders began to pay more attention to the following factors: the share and type of foreign capital in the company, a detailed study of the history of the development of the insurer, its connection with the banking sector and belonging to industrial groups, and an assessment of the history of relations of the insurance company with certain customer segments.
Information activity is one of the key factors in the formation of knowledge and confidence in the insurance company. According to the collective opinion of the study participants, “non-standard”, “special” conditions, a bright logo, a memorable slogan and the activities of a team of corporate insurance professionals are best remembered.
The openness of the information policy also works for a positive image of the company – the opportunity to learn information about the management of the insurance company from open sources; the presence of a “clear” and “live” site for a corporate audience.
Trend number 4. “Corporate cumulative “anabiosis”
The single social contribution (SSC) is still the leading deterrent for endowment life insurance for corporate clients. None of the participants in the study purchased a funded life insurance program. At the same time, they were single theoretically interested in information on non-state pension funds, attracting insurance consultants and independently attending thematic seminars. Less than 10% of those surveyed are ready to renew the consideration of benefits in case of cancellation of ERUs.
Trend #5. Strengthening the role of insurance intermediaries in the sale of risk life insurance programs for corporate insurers
33% of the life insurance respondents use the services of an insurance intermediary (broker, multi-agent, consulting company, insurance mediator). Among the respondents there is a group of insurers who use the services of two different intermediaries life insurance.
This, in turn, is explained by the small number of truly trained consultants to work with the corporate segment and often the absence of such a group of professionals from the intermediary leading VHI insurer. That is why policyholders can choose a separate consulting team for life insurance work.
Those who express a rather negative or neutral attitude conclude contracts on their own. Most likely – there is a consultation insufficiency.
At the same time, compared with previous periods, the number of policyholders using the services of insurance intermediaries has increased. According to the respondents, the presence of an intermediary saves up to 80% of the time spent on studying the nuances of the benefit and the product range when organizing competitions and conducting price cuts before the introduction of the benefit.
Respondents do not have “boxed” or so-called “packaged” products due to the individuality of the requests of each corporate contract, which is undoubtedly facilitated by non-life brokers who traditionally work with corporate insurers on requests, each of which contains certain corporate requirements and wishes, often that do not fit into the framework of “boxed” solutions.
Trend number 6. Annual expansion of risk life insurance benefits
It is interesting to note that due to the evolutionary development of the insurance market, most corporate clients annually expand these programs, which is undoubtedly facilitated by the low cost of benefits compared to VMI. According to the legal requirements, all respondents have coverage for “death from any cause”, 75% insure staff in case of disability for any reason (1 and / or 2 groups), against accidents (3 groups of disability).
63% of respondents have a “critical illness” program (usually with at least 6 diseases (more often including cancer, stroke, heart attack, kidney failure, organ transplantation and coronary artery bypass grafting), with an additional payment and a deferred period of 3 months, survival period of 30 days).
56% of corporate clients use the “injury” option (with payments according to the tables). At the same time, among the respondents there are companies that use different tables (with different levels of payment), depending on the position held (“white” or “blue” collars).
50% of respondents insure temporary disability (“sick leave”) and 6% – surgical operations with payments according to the tables.
Most often, the “critical illness” option is purchased if there is a program that excludes corporate or individual coverage for malignant neoplasms.
The life product of critical illness is associated with clients primarily with protection in case of malignant neoplasms. At the same time, in this program, as part of the exclusion list, all previous conditions and diseases that are not associated with tumor metastasis are cut off. Therefore, if the customer has a consultant who clearly understands this subtlety, the share of the VHI product increases, protecting in case of primary diagnosis and one course of treatment for any form of cancer, and life coverage for critical diseases.
At the same time, by acquiring a comprehensive insurance service program that includes VMI and the option of critical illness, the employer provides his team with a truly holistic insurance package that allows them to provide decent social protection.
In 2014, employers began to show more interest in such options as: “fatal outcome” due to road traffic accidents, due to an accident in transport, due to criminal assault as new insurance solutions, but still rarely include these programs, despite their affordability , in corporate life insurance packages.
Trend number 7. Preservation of the principles of formation of the budget for personnel insurance
Traditionally, for 55% of respondents, the budget for corporate personnel insurance is defined as a specific target amount, under which the insurance solution that is most suitable for the corporate request is subsequently selected.
35% of companies are focused on preliminary price cuts (average market cost of the same type of products), and 10% are focused on the consulting assistance of an intermediary when forming a budget.
Edited & Fact checked by Oleg Parashchak
