- Aon’s broking data indicates insurers’ proposed renewal terms will increase from between 13 percent and 23 percent on average across main insurance lines of Life Assurance, Income Protection and Private Medical Insurance
- 51 percent of employers admit to not using the full extent of value-added services from healthcare and risk providers effectively
LONDON, 9 May 2022 – Aon plc (NYSE: AON), a leading global professional services firm, has said that one in five UK employers are potentially missing opportunities for better value from renewal terms on Life Assurance, Income Protection (IP) and Private Medical Insurance policies (PMI). Data from Aon's UK Benefits and Trends Survey 2022 shows that while many employers review policies every year or every second year, others haven’t reviewed policies in over five years.
The research shows that employers review their Life Assurance and PMI policies the most frequently. Respectively 71 percent and 68 percent of employers review these policies every year or second year. When it comes to Income Protection, 58 percent review it ever year or two, while 36 percent review Critical Illness and 32 percent review Occupational Health every year or two.
Many employers, however, said they have reviewed policies “within the last five years” or “haven’t done so in more than five years”. Twenty-three percent reported this frequency for both PMI and Life Assurance policies, 18 percent for IP, 15 percent for Critical Illness and 38 percent for Occupational Health.
Aon’s broking data also indicates that insurers’ proposed renewal terms will increase between 13 percent and 23 percent on average across the main insurance lines of Life Assurance, Income Protection and Private Medical.
Mark Witte, principal, Health and Risk, Aon, said:
“Businesses have been navigating new forms of volatility and the uncertainty continues, so it is concerning that around one in five employers aren’t proactively using market leverage to achieve greater value through improved renewal terms. Although the majority of employers test the market in line with standard rate guarantee periods, this practice is more common with risk insurance than with medical benefits.”
Aon’s survey also shows the extent that employers leverage value-added services from healthcare and risk providers. These services - Employee Assistance Programmes, educational content and apps, for instance - can better support employer health and wellbeing strategies. Forty-nine percent of employers say they are very important and a key part of their strategies, a slight increase from last year’s 45 percent. Forty percent say they want to understand them more or they’re not an important part of their strategy.
Additionally, just 18 percent of employers view the claims management and rehab services offered by their Income Protection providers as an integral part of their strategy. Nearly half (48 percent) use the services but in a limited capacity.
“The challenge of obtaining full value from these services and integrating effectively with other health suppliers, most notably Occupational Health, is not a new one. But given the evolving challenges presented to employers in managing employee health in a remote working environment and set against the long-term impact of the COVID-19 pandemic on our health, the importance of robust, effective and targeted health management strategies has never been more evident in building a more resilient workforce.
“We also believe there is an opportunity for even greater innovation from providers, offering value-added services that employers and their employees equally value. With overall market growth limited across the risk and health insurance lines, truly valued additional services may not just help increase utilisation of these services by employers, but also support growth for the industry as a whole.”
Aon’s annual survey shows trends in employer benefits strategies, highlighting issues experienced by employers and employees. In its 12th year, the survey took into account the experiences of 253 HR, employee benefit and reward professionals from across the UK in a variety of sectors. Seventeen percent of respondents stated their organisation employs more than 5,000 people; 33 percent employ between 1,001 and 5,000 people; 13 percent employ 501 to 1,000 people; 10 percent employ 251 to 500 and 27 percent employ fewer than 250 people.
More information about how Aon helps businesses build resilient workforces is available here. To access Aon’s UK Benefits and Trends Survey 2022, click here.
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