Volume 2 Issue 8 - 2009
Merging Benefits With Flex | Cisco Improves Benefits Delivery | Promoting Wellness in Asia

Cisco Improves Benefits Delivery

How Cisco Increased Efficiency and Lowered the Cost of Its Asia-wide Benefits Programs

The challenge

A company can implement new HR programs and can strive to be top-of-the-line competitive on strategic issues but on a day-to-day basis, employees have to be paid and HR has to address pressing personnel issues. In today’s environment, resource restraints are a real problem as HR strives to manage both the strategic and the mundane. Client-facing HR in particular must deal with employee relations and troubleshoot many other critical issues. Under these circumstances, managing and administering benefits can sometimes come out 99th on the priority list. Having to handle this for 60 countries with a lean HR staff is close to impossible, even for one of the leading edge global technology company.

Facing this dilemma, Cisco decided that having their own HR team handle benefits was not efficient. They decided to engage a broker not just to do the traditional marketing of insurance. They also wanted the broker to be a strategic partner in managing and administering the program once the insurer was selected and the policy implemented. They were looking to partner with a subject-matter expert who both understood the numbers as they came through and understood how insured benefits were being used.

The benefits brokerage model

Cisco went out with a Request for Proposal (RFP) to all major players asking them to present a consistent approach to address their benefits needs in Asia. According to Jeremy Hollister, Cisco [Global Benefits Manager], Aon was awarded the contract because “Aon offered flexibility and willingness to do something different and then make it actionable. Aon quickly understood what we wanted to do.”

Aon developed a comprehensive approach to benefits for Cisco at the global, regional and country level that encompassed governance, access to information, renewal, and plan design. At the local level, Aon also proposed to help Cisco with administration processes, such as enrollment for new employees and dependents, claim process escalation, and data analysis. Cisco makes no direct payment for services to Aon Consulting for all of these services. Rather, under the global benefits brokerage model, Aon Consulting receives payment for services provided to Cisco in the form of a commission payment from the insurer. 

The project covers brokerage advisory and administration services for all insured employee benefit insurance programs in Asia including term life, personal accident, disability, hospitalization, outpatient, and dental insurance. As part of the arrangement, Aon Consulting provides a dedicated Asia Pacific account manager as a single point of contact and maintains regular discussions with Cisco’s regional team in their Singapore office. Regular discussions cover such issues as benefits strategy, insurance plans remarketing, claims issues; opportunities to maximize Cisco’s employee benefit programs; employee benefits trends and changes in the competitive environment in Asia Pacific; and legislative and regulatory changes with respect to employee benefits. A similar model is in place in Latin America, the Middle East and Africa.

The solution and results

At the beginning, Cisco had doubts about inserting a broker in between themselves and the insurer. Cisco had rarely used a broker to arrange their benefits insurance coverage. The arrangement was beneficial to them only if they received help with governance, with data collection, with transparency and fees, and with the administration processes at no extra cost to their insurance premiums. In fact, Aon has been able to not only provide these services but in the first year it also has reduced Cisco’s insurance premiums for benefits coverage in Asia.
Cisco used to go direct to the insurance vendor but now anything that has to do with insured benefits goes directly to Aon. Throughout Asia, Aon helps Cisco contain costs, manage and process claims, handle employee inquiries, develop a benefit strategy, and interface with Cisco’s insurance vendors. Aon coordinates benefits programs across Asia as well as administering the programs in each country.

According to François Choquette, Aon Consulting [Global Benefits Leader, America], “The most valuable thing that we did for Cisco is total transparency in terms of their costs. They can see where renewals are and see what the cost increase is. They are able to say next year the cost increase will go up by ‘X’ and this is the reason why. That is the number one impact - no surprises.”

The challenges ahead

Cisco has been pleased with the results. Hollister says, “It’s been a great experiment so far and it has worked well. There has been a lot of up-front work but there will be a great benefit. Aon was able to jump in to understand what global wants and could work on a local level to deliver results.”

What’s next? According to Hollister, data now must be the focus. “Now that we have gotten past the first year, it is fine tuning the process and getting the data. We have achieved a lot – Aon represents Cisco in 31 countries. Now we need to work on that data piece.”

Aon knows that the next challenge is to ensure the data is accurate and analyze the data to further contain costs and improve the provision of benefits services. Choquette remarks that, “We still have something to prove from our side. We must show Cisco that once we get the right data we are able to manage that data efficiently. I am confident that our team in Asia can do that. Our greatest strength is our absolute ability to be creative and come up with out-of-the-box solutions.”

Contact

For more information about Aon Consulting’s capabilities and experience in global health benefits, please contact Genevieve Lim, Asia Regional Consulting Director in Singapore at genevieve_lim@aon-asia.com, François Choquette, Global Benefits Leader for the Americas in San Francisco at francois_choquette@aon.com or Mark Sullivan, Global Benefits Leader for Europe at mark.sullivan@aon.co.uk.