Risk managers taking bigger role in employee benefits makes economic sense

Employee benefits used to be the sole responsibility of the human resources (HR) department and were invariably organised, managed and purchased at a local level. But multinational corporations are fast waking up to the fact that this increasingly important area needs to be controlled and bought on a central basis, with the support and leadership of the risk and insurance manager. Narim members who took part in this year’s Dutch leg of our Risk Frontiers Europe survey confirmed they are definitely becoming more involved in this topic and taking a lead role. “The brokers are driving this, but I know a lot more risk and insurance managers who are becoming involved in employee benefits. There is a lot more interest in this area and more and more companies are looking to place their employee benefits risk into captives,” said Ronald de Vos, corporate insurance manager and legal counsel at Nutreco. “If you are a big multinational company, centralising employee benefits makes a lot of sense through risk- and profit-sharing pools. Big companies have things like corporate credit cards and vehicle accident cover arranged on a local basis and perhaps do not realise the improved deals that could be negotiated on a central basis by the insurance management team. This is just one more basket of risks and it makes economic sense,” pointed out Hans Berkers, director of risk management EMEA at Johnson Controls. Adri Van der Waart, president of Narim and corporate insurance manager at Arcadis, said he is becoming more involved in employee benefits. “I am supporting my HR team and helping the company to evaluate options with insurers and brokers,” he explained. Titus Tiel Groenestege, director of safety, risk and insurance at Pon Holdings, said he has become involved in the management and procurement of employee benefits during the last five years. He believes this delivers a real positive for the HR team. “In most cases, HR people are not interested in the numbers and policy wordings and conditions. You can make it a positive combination of what HR wants and needs and what delivers the best result for the employees and the company,” he said. Another harsh reality driving this trend is the desire of national governments to shift some of the social security burden onto the private sector as populations age, medical costs rise and companies engage in the battle for talent. “In the Netherlands, there is definitely a situation whereby the state is pushing hard to place the responsibility for social security back to companies because it is simply too expensive. The rise of flexible working is costing the state a lot of money. Companies are having to take this more seriously than in the past and organise more efficiently,” said Mr Tiel Groenestege. There is usually an assumption among many in the risk and insurance market that taking a role in employee benefits will inevitably lead to a turf war with HR. But this is not necessarily the case, argued Mr Van der Waart. “Six years ago, I was asked for help. There was never a fight with HR, I supported them,” he said, suggesting that those risk and insurance managers that have not yet become involved may wish to ask the question.

Risk managers taking bigger role in employee benefits makes economic sense

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