How Covid-19 has changed employee benefits

During the recent virtual edition of the APAC Captive Summit 2021 organized by Captive Review, I had the pleasure of moderating the Employee Benefits panel with other Asia Pacific industry experts including Shah Rouf, CEO, Group Corporate Solutions at AIA Group, Juliet Kwek, Regional Director at MAXIS GBN and Steve Wong, Regional Director APAC at Generali Employee Benefits.

The panel has been a unique opportunity to exchange views and experience with the industry leaders on various topics related to the Covid-19 pandemic. Starting with the clients’ perspective and their major concerns, we have then moved onto the support offered by the governments over the past year and a half and how the insurance industry has supported corporate organizations throughout the pandemic. We have then discussed about the revamped role of employers regarding their duty of care, closing with the lasting impact of Covid-19 and what the future holds for all of us. Please find here below a brief summary of our discussion and major findings.

Client perspective

From a client perspective, the major concerns related to the impact of the pandemic on employee benefits initially revolved around the insurance coverage, whether the workforce was properly covered and whether the protection would have been sufficient. This was connected to a strong desire, in particular for captive clients, to ensure that they were always there for their employees in these unprecedented and unexpected circumstances.

Looking at the claims, we observed an increase in mortality claims as well as a decrease in the utilization of medical services, which led to a focus on savings to utilize budgets more effectively.

Only after this, the utilization of telemedicine and the digital access to health services spread across the various markets. Today, the impact of Covid-19 is still at the top of the corporate organizations’ agenda.

Government and insurance industry support

Many governments in the Asia Pacific region took appropriate action to respond to the pandemic, either by introducing large packages to support the economy or minimize recession, or by building up the social protection system.

In a second phase, the pandemic also opened up possibilities to partnering with the private sector, especially with regards to accelerating technology investments, introducing appropriate healthcare services, and therefore seizing new opportunities generated by this crisis.

Existing EB programs

Looking at how the existing EB programs responded and performed during the pandemic, the most important lesson learned was that there have been clear benefits connected to having an EB program in place during the pandemic.

As with regards to captives, these included possible reviews of terms and conditions as well as exclusions and the enhanced collaboration of clients, brokers and providers to make the necessary adaptions to extend coverage.

Other identified benefits were the general flexibility and efficiency of a captive program to adapt in times of crisis, the easier access to data and the comprehensive view on the entire workforce to make sure that the program is in line with the company’s strategy.

Employer’s duty of care

The pandemic reinforced the importance of employee benefits, especially with regards to health and safety, and re-defined the role of employers with respect to their duty of care towards their employees.

The impact of the pandemic on employers as well as the subsequent emergence of new benefits were clearly dependent on the sector each specific operates in. Hybrid working models, wellness and mental health benefits as well as digital access to actual medical contacts were more relevant in the service sector than other industries that cannot offer working-from-home-models to their employees.

Providers showed a steep learning curve in building up the infrastructure for newly emerged benefits connected to the employers duty of care. Providing in-depth quality services in this area will be the key for future developments.

Final Considerations

It was a great pleasure for me, as moderator, to prepare this panel and to steer exchange among the renowned captive experts and professionals in Asia Pacific, a region that has certainly been at the forefront of the global pandemic. I would like to thank Captive Review for organizing the session and the distinguished speakers for their participation.

Having a captive in place in times of crisis has often proven beneficial due to its three main advantages, flexibility, efficiency and stability. However, as an industry, we still struggle to see evidence of the emerging need to form captives across the region even following the pandemic.

After many years of debate within the industry, the pandemic has certainly accelerated the adoption and development of digital services as well as health and wellness solutions which are clearly related to the revamped role of employers as regards their duty of care.

Employers and insurers are doing a lot across the region to speed up the vaccination roll-out slowed down also by a lack of availability in several countries. There is still a lot of misinformation among the population, and employers and insurers have the social and economic duty to leverage their role of trusted institutions to encourage employees to look at the evidence and facts to get vaccinated.

To see the full video please click here.