Risk managers must improve cooperation with HR to deliver more efficient employee benefits

Risk managers can help deliver more efficient global employee benefits (EB) but must overcome potential clashes with human resource professionals (HR) with clear communication, strong cooperation, clearly defined roles and buy-in from the top, according to speakers at our latest conference. Risk and insurance managers are becoming increasingly involved in delivering more cost-effective and efficient group-wide EB programmes by bringing their analytical and risk transfer skills to the table. Gilles Finkestein, director of customer and distribution management, Europe, corporate life and pensions at Zurich Global Employee Benefits Solutions, explained that a growing number of companies, driven by risk management expertise, are turning to captives and global insurance programmes to deliver EB programmes. But he told delegates at our virtual EB event this week that many HR managers are wary of using such tools. Insurers and risk managers must put in the effort to better explain the benefits they can bring to HR and all stakeholders, he added. “HR managers often think multinational pooling is the best solutions for social benefits. But by using a captive, or global underwriting programme, they can reach the same results and do it in a more efficient way. The problem is a lot of people think these are really risk management solutions that cannot be used in these types of programmes. So, there is a lot of communication and experience that needs to be shared,” said Mr Finkestein. “But some of these tools are traditionally in the hands of the risk manager. So, the challenge for insurers is to ensure these tools and the advantages they can bring are understandable for all the stakeholders, including HR,” he added. Other speakers stressed that getting buy-in from HR and ensuring the department and risk management works from the same page is far from easy. But they said problems can be overcome. Matthias Helmbold, head of technical and services and MAXIS Global Benefits Network, said one problem is risk management and HR don’t speak the same language. He said it is therefore extremely helpful to get some risk and insurance technical expertise within the HR department to bridge the knowledge gap. Mr Helmbold also said it is crucial that risk managers and HR professionals clearly understand each other’s roles and are able to communicate clearly. “You need to get clear roles sorted. I have seen friction where HR managers are trying to price risk, which is not their job, or risk managers telling HR managers what covers they should take in a certain market, which, again, is not their role. The roles need to be very clear and all sides need to be able to communicate,” he said. Mr Finkestein said without clear roles and communication, organisations can get into trouble. He said he has had to step into to sort out problems between risk management and HR before, which often means things have gone wrong. “I have experience of being a kind of peacekeeper to bring messages from HR to risk management and vice versa. Usually when an organisation needs an insurer or intermediary to have this kind of conversation, there is a problem,” he said. To avoid such scenarios, it is important that each stakeholder understands their responsibilities and accepts the role, he continued. Buy-in from the top is critical, he added. “A good way to ensure these definitions are clear and accepted is when it comes from the top. When the board at HQ of a multinational clarifies and makes clear communication, the message can cascade down within the group, regions and countries,” said Mr Finkestein. Fellow speaker Pascal Prévost, manager of corporate-insured employee benefits, group risk services at Nestlé, agreed about the need for good cooperation between HR and risk management. “This should be based on trust and openness to change, which isn’t easy because some of these benefits are linked to union agreements,” he said. Mr Prévost added that organisations also need a long-term vision for EB provisions. Jackie Hyde, managing director of brokerage Stanmore Insurance, also stressed the importance of top management’s support and the right culture when trying to drive through change. “When you are trying to introduce something like this, culture is so important. The desire for change needs to be embedded in culture and come from the top. People from the top and relevant department heads must understand what they are trying to achieve and ensure everybody is onboard. The benefits are amazing when that happens and everybody is pulling together. We as the broker can explain these products and where things can go wrong, but it is no good bringing that if it isn’t filtered from top to bottom,” she said at the event partnered with Generali Employee Benefits Network, MAXIS Global Benefits Network and Zurich Global Employee Benefits Solutions. Mr Helmbold added that, ultimately, risk managers and HR are there to support the organisation or business, and getting buy-in from leadership at local and global level for what they are trying to achieve is absolutely key. “If they are successful and get the endorsement from senior management, they can then roll out and manage programmes on a global scale,” he said. Expert at the event also said that it has never been more important than in the post-Covid-19 world for organisations to recognise that people are their most important asset or risk, and that both sides of the same coin must be properly managed.

Risk managers must improve cooperation with HR to deliver more efficient employee benefits

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