A spotlight on global solutions for employee benefits

More and more large multinationals are realising that there is a significant opportunity to optimise their global employee benefits arrangements by structuring and managing their local benefit plans more holistically. Up until now, the placement of employee benefits has mostly remained local; with best-practices and data-sharing being difficult to implement due to manual processes and local data stored in disparate and hard-to-interrogate systems.

Recent discussions at the International Employee Benefits Association (IEBA) conference in Brussels highlighted the increasing demand from customers and their employee benefits consultants to realise the global purchasing power of large multinationals by offering solutions reflective of their scale and with more standardised benefit designs across countries.

Equally, innovative technological improvements in accessing and managing data, such as improved HR systems, software robotics and data cleansing tools are helping to support the move towards more holistic underwriting solutions.

Requests for global solutions are increasing, and the challenges of implementing such solutions and the key role which data plays in making them sustainable are outlined below.

The Importance of Data
There is more to consider than just a one-off pricing discount for a customer wanting to place multiple countries’ benefits with a single carrier and it requires commitment from both the insurer and the customer to make such arrangements sustainable. The provision of accurate and timely data is absolutely key throughout the value chain, and each party (customer, employee benefits consultants and insurer) has a key role to play in a ‘virtuous circle’ of data improvement.

How can the true benefits of global solutions be realised?
• by understanding the customer’s goals and structuring a tailored solution, based on the best data possible, usually coming from the customer’s HR systems;
• by using – in some cases – cross-border solutions within the international programme can reduce complexity and associated costs of having many small policies. Again this needs the right level of census information to determine the status of employees who may be expats or cross-border workers and therefore eligible to be included under such policies;
• by standardising some benefits and conditions to help the customer offer consistent benefits packages for groups where it makes sense to do so;
• and with the recognition of increased free cover limits and diversification benefits for large, multi-country programmes.

Once a suitable plan design has been agreed, effective on-boarding and management of the policies is critical for the long-term success of the solution, to assist the customer and the insurer in keeping the programme together.

Customers’ businesses are continually evolving and therefore they need a solution that can respond to mergers, acquisitions or divestments, which impact their employee populations. This means that the active management of ensuring the policies are on-boarded in line with the pricing basis or a straightforward underwriting review process is key to creating a win-win arrangement for both parties. In each of these circumstances data is critical to ensuring the global approach remains valid or is updated accordingly.

Ian Veitch, Zurich’s Global Head of Proposition & Underwriting for Corporate Life & Pensions believes: “Effective global solutions, such as our Zurich International Programs for Employees, are based on a partnership approach with our customers. In the past, lack of data has been a big barrier to achieving success, so taking the time to tackle data issues upfront and working together to create a ‘virtuous circle’ of data improvements and insights, has been key to delivering far more than just a pricing discount.”

He adds: “We see global solutions as a journey and at each step of the value chain, there is an opportunity to deliver benefit to the customer. Many of the early wins for the customer and the insurer will be in improving the accuracy of census information, assisting the quotation, administration and renewal processes.”

However, Mr Veitch stresses: “The key benefits arise when the data we deliver provides real insight into executive decision making on risk management topics and employee benefits funding strategies. That’s where we can really add value.”

Contributed by Zurich Commercial Insurance.