marsh india newsletter april 2017...marsh india’s 9th annual employee health and benefit survey...

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CEO’s message

Niche benefits emerge as key

differentiators for organizations

Case study

Other news and insights

Marsh events

CONTENT

NEWS&VIEWS April 2017

Dear all,

I am happy to say that a year after launching our newsletter, we will be publishing it once every two months. A more frequent publishing schedule will help us discuss rapidly evolving risk issues in a timely manner.

As the global economy shows robust signs of accelerated growth led by the developed countries, India’s development appears to have also received a boost. The first-quarter corporate results are better than expected, and the long-delayed goods and service tax is poised to be adopted.

Greater financial literacy and adoption of digital technology are likely to be helpful to the insurance industry. However, the rapid transformation of the insurance industry and the broader economy has meant that risks are becoming more diffuse and varied.

One such emerging risk issue is the employee health and benefit landscape in India. As lifestyle and workplace change, employees are facing new health risks.

At the same time, organizations are grappling with the challenges of attracting and retaining the right talent, while reducing or maintaining costs. In such a scenario, a few niche offerings, such as disability and rehabilitation benefits, have the potential to be helpful to both employees and organizations.

We also have a case study of how a multinational company improved employee relationship and retention by focusing on diversity.

In addition, there is our regular news and views section, together with a colorful feature encapsulating moments from our countrywide events.

We hope you find this newsletter informative and interesting. Please let us know your views and share your feedback. It is our aim to make our newsletter interactive and forum to discuss issues of interest to your organization and the insurance industry.

Warm regards,

SANJAY KEDIA Country Head and CEO Marsh India

News&ViewsMessage from the CEO

INDIA


2 News&Views

NICHE BENEFITS EMERGE AS KEY DIFFERENTIATORS FOR ORGANIZATIONSAs organizations grapple with objectives, such as attracting, and retaining talent and balancing costs, a few niche benefits can help organizations differentiate themselves from their competitors.

Niche offerings, such as coverage for advanced medical and out-patient surgeries, are valued, and one of the factors that influence employees to remain in an organization. In India, changing lifestyles together with long work hours have led to the emergence of diseases, such as diabetes, hypertension, and coronary heart ailments. Medical inflation is also high. Given these, such benefits are appreciated by employees.

If organizations want to develop competitive advantage through human resource (HR) processes, it is important for them to define, identify, and develop their strategic differentiating capabilities. Such a process, if followed, empowers the HR department to influence organizational strategy, and also provides a link between talent management and strategy.

Organizations in India, in tandem with other countries, are taking baby steps toward providing coverage that are more relevant to employees as well as offer benefits for their short-term needs. These trends are a step in the right direction, but most organizations have a long way to go in the path to provide comprehensive and useful health insurance and benefits to their employees.

THE CURRENT HR TRENDS

Marsh India’s 9th Annual Employee Health and Benefit survey showed that 31% of 2,029 organizations representing diverse industries, whose employees range from millennials to baby boomers, have adopted benefits for their women employees. Also, 30% of the companies surveyed had provided coverage for advanced medical procedures in their health insurance benefits.

About 42% of the organizations had implemented health and wellness or preventive care measures, such as yoga, to inculcate healthy living in their employees’ lives.

An interesting finding of the survey is that employees are pragmatic, and are willing to share the cost of such benefits. In addition, the majority of the employees appreciate the cost savings and the benefits of organization-provided health and related benefits.

WHAT ORGANIZATIONS ARE DOING TO ENHANCE BENEFITS

To gain an advantage in the highly competitive talent market, respondent organizations have realized the need to differentiate themselves from their competitors. Most organizations are exploring plan enhancements that will allow them to provide value, especially for health insurance and disability benefits, to attract and retain their employees.

of the organizations had implemented health and wellness or preventive care measures, such as yoga,

to inculcate healthy living in their employees’ lives.42%

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OFFERING CHOICE-BASED BENEFIT PLANS

About 45 % of the respondent organizations said they are on track to offer choice-based plans to their employees, while the remaining 55 % of employers said they would like to introduce benefits that employees can choose to enroll in, depending on their circumstances and health issues.

Source: Source: Marsh India 9th Annual Employee Health & Benefit Survey Data is from 2,029 organizations surveyed

KEY BENEFIT STRATEGIES IMPLEMENTED BY ORGANIZATIONS

A FEW NICHE OFFERINGS CURRENTLY OFFERED BY ORGANIZATIONS

© 2015 Marsh LLC. 17 9th Annual Employee Health and Benefits Study

2.1. B. ENRICH THE EXISTING COVER

To gain advantage in the highly competitive talent market, respondent employers must differentiate themselves from their competitors. “Differentiation” is often considered when offering a comprehensive benefits package. Employers are exploring plan enhancements that will allow them to provide value, especially for health insurance and disability benefits.

Employers are becoming increasingly aware of the importance of including coverage that are more relevant to employees as well as offer benefits for their short-term needs. These trends are a step in the right direction, but most employers have a long way to traverse in the path toward providing comprehensive and useful health insurance and benefits to their employees.

FOCUS AREAS TO ENHANCE BENEFITS

In the survey, 31% of the respondents said that they have adopted benefits for their women employees, while 30% said they have incorporated advanced medical procedures in to their health insurance coverage.

PROMINENT BENEFIT STRATEGIES IMPLEMENTED BY CORPORATES, WHO WERE ON TRACK IN ENHANCING BENEFITS.

Women specific

31%

Medical advancements

30%

20%

31% 30% 29%

Out of pocket medical expenses

Women specific Chronic conditions Medical advancements

Chronicconditions

26%

18%

Childrenspecific

Diversity and Inclusion

26%

16%

Disability/Rehab support

Long-termcare

26%

My insurance reimbursed cost of cervical vaccination. Am happy that our company cares for Women employees“

(27 years Banking professional)

We are always on a lookout for program and approaches which help our employees unlock the true value of the suite of bene t offering within the company and online portal has helped us in that endeavor”

-Delphi

Employee Speak








Women specific

31%


30%

20%

31% 30% 29%



Chronicconditions

26%

18%

Childrenspecific


26%

16%


Long-termcare

26%




-Delphi

Employee Speak








Women specific

31%


30%

20%

31% 30% 29%



Chronicconditions

26%

18%

Childrenspecific


26%

16%


Long-termcare

26%




-Delphi

Employee Speak








Women specific

31%


30%

20%

31% 30% 29%



Chronicconditions

26%

18%

Childrenspecific


26%

16%


Long-termcare

26%




-Delphi

Employee Speak








Women specific

31%


30%

20%

31% 30% 29%



Chronicconditions

26%

18%

Childrenspecific


26%

16%


Long-termcare

26%




-Delphi

Employee Speak

4 News&Views


WORKPLACE WELLNESS PROGRAMS

Organizations are also adopting workplace wellness programs. About 42% of the organizations surveyed said they have introduced preventive health and wellness programs as a measure to maintain their cost budgets.

These programs are becoming popular among employees for two reasons: they improve the health and well-being of employees and the productivity of the organization. Also, they infuse the notion of health and wellbeing in the overall workplace culture.

As for organization, these programs reduce organizations’ health care and associated costs.

Wellness programs lead to savings by lowering common risk factors found among employees. They educate employees about the preventive measures to delay or reduce the chances of developing lifestyle diseases, including obesity, diabetes, and heart disease. The reduction of health risks among employees leads to lower expected healthcare costs, pharmaceutical purchases, hospital visits, and absenteeism In addition to reducing healthcare expense claims, these also have a positive effect of helping raise overall productivity in organizations.

The study also found that more than 30% of the employee respondents are spending more than Rs. 5,000 of their own money per annum on popular wellness programs.

Most organizations are taking note of the benefits of wellness programs, and more than 40% of the employers surveyed said they would be willing to offer health and wellness programs on a cost sharing basis.

MEDICAL AND DISABILITY BENEFITS

Despite the progress, medical and disability benefits provided appear to be inadequate in India. About 53% of the respondents feel that medical insurance plans were inadequate, while 57% felt the same for disability insurance plans. Many employees end up depending on their personal finances to cover these kinds of expenses. The adequacy gap of insurance plans is increasing, which is leading to increased out of pocket expense for employees.

ORGANIZATIONS NEED TO ADOPT A HOLISTIC VIEW OF EMPLOYEES RISK EXPOSURE

Organizations realize their employees are their greatest asset, and allocate a budget for employee costs, including recruitment, overtime, and insurable expenses, such as compensation, health, and safety. These costs ultimately affect organizations’ bottom lines.

There are also other costs associated with inadequate insurance and health benefits, which are often overlooked. These include costs that result from absenteeism and low productivity. If these costs are not managed effectively, they have the potential to affect employees’ wellbeing and also the organizations’ bottom line.

Such employee risks are too large to ignore. A holistic view of employee risks, without just factoring in short-term costs of insurance and benefit policies, is important to drive long-term profitability.

A stable, profitable organization cannot afford to ignore employee aspirations and well-being. Often, these important risks are not addressed in the traditional HR benefit strategies. A through study of the direct and indirect people costs allows organizations to understand the total costs-benefits ratio of employee benefit spends.

SURESH BABU Senior Vice President, EH&B practice

References:

Marsh India 9th Annual Employee Health and Benefit Survey and Report.

TREND IN CO-PAY ON CLAIMS

Benefit Type 2010 2011 2012/13 2014/15 2016/17

Co-pay on claims 13% 33% 32% 34% 37%

of the organizations surveyed said they have introduced preventive health and wellness programs

as a measure to maintain their cost budgets.42%


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CASE STUDYHOW AN ORGANIZATION IMPROVED RETENTION AND HIRE OF THE RIGHT TALENT

SITUATION

A multinational firm with diversity and inclusion as their primary agenda across the globe, wished to increase the representation of women in their workforce.

CHALLENGE

The number of female employees was about 20%-25% of the total employees and the company was facing a challenge to find the right employees to hire. They were also experiencing a high turnover of employees, both male and female, and in different age groups.

ACTION

The Marsh India EH&B team analyzed the organizations employee health and benefits program, including policy wordings of employee health insurance policies and claims reported in the past few years. Feedback was also sought from employees to craft a new program.

As a result of this initiative, the organization decided to enhance their insurance and benefit program to include the following:

• Cervical vaccination.

• Surrogacy coverage.

• Enhanced maternity plan to cover complications and out-of-pocket expenses.

IMPACT

The organization was able to attract the right talent, and retention of employees also improved. At the same time employee participation in the organization- offered voluntary health benefit program increased.

THE EH&B TEAM


6 News&Views

OTHER NEWS AND INSIGHTS

INSURANCE PREMIUMS RISE IN 2017

Motor insurance premiums for third-party liability, which is mandatory in India, is likely to increase by 50% in a few cases, according to a report in Mint.

The report added that the Insurance Regulatory and Development Authority of India (IRDAI) has proposed an increase of up to 50% in the third-party liability premiums of motor insurance. The premiums are raised each year, primarily to rein in the claims ratio.

Claims ratio is the ratio of net claims to net premiums. Therefore, the industry is currently paying more to settle third-party claims than what it is receiving for third-party insurance.

Read more at:

http://economictimes.indiatimes.com/articleshow/57725749.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppstinsurance: Group mediclaim premiums likely to rise - The Economic Times

GROUP MEDICLAIM PREMIUMS LIKELY TO RISE

An article in the Economic Times said that group health insurance premiums may go up as the insurance regulator becomes stricter about disclosures to end subsidization by individual payers.

The Chairman of Insurance Regulatory and Development Authority of India (IRDAI), TS Vijayan, recently said the regulator was planning to ask companies for segmental reporting of balance sheets to show which segment was making losses, the article further said.

Read more at:

http://economictimes.indiatimes.com/articleshow/57725749.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

GST: CENTRALIZED ASSESSMENT FOR SERVICE-ORIENTED INDUSTRIES LIKELY

The business newspaper, Mint, reported that Goods and Service Tax (GST) council, is considering setting up a centralized assessment interface for service-oriented industries, such as banking, telecom, insurance, and information technology, according to two officials familiar with the discussions in the GST council.

A common pool of officers drawn from the centre and the states can carry out the assessment for certain service sectors. This would ensure a single interface for these sectors, according to the proposal being discussed in the council.

Read more at:

GST: Centralized assessment for service-oriented industries likely - Livemint

NATIONAL HEALTH POLICY AIMS AT ASSURED HEALTHCARE TO UNDERPRIVILEGED: UNION MINSTER J P NADDA

The Union Health and Family Welfare Minister J P Nadda on Thursday said the National Health Policy’s aim is to provide healthcare to all, particularly the undeserved and underprivileged, according to the Economic Times.

Presenting the National Health Policy in the Lok Sabha, Nadda said the policy proposes raising public health expenditure to 2.5% of the GDP in a time-bound manner.

“We are making policy patient centric, making patient empowered regarding redressal and treatment. We will develop standards; if treatment is not done properly then tribunals will be set up to take the matter,” he said.

Read more at:

http://health.economictimes.indiatimes.com/news/policy/national-health-policy-aims-at-assured-healthcare-to-underprivileged-union-minster-j-p-nadda/57668733.


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MARSH EVENTS

Marsh India launched the 9th Annual Employee Health & Benefits Survey report in Mumbai on February 15. The Mumbai event was the first of six other events in different cities of India. This launch was the first time that the report was launched across India, an effort to engage with our clients spread throughout the country. About 810 delegates attended the events.

MUMBAI, FEBRUARY 15

BANGALORE, FEBRUARY 16

PUNE, FEBRUARY 17

GURGAON, FEBRUARY 22

HYDERABAD, FEBRUARY 23

KOLKATA, FEBRUARY 24

CHENNAI, MARCH 1

Marsh India Communications Team.

For any information, please contact: ANGANA BHARALI DAS [email protected]

MARSH IS ONE OF THE MARSH & McLENNAN COMPANIES, TOGETHER WITH GUY CARPENTER, MERCER, AND OLIVER WYMAN.

The information contained in this publication provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation, and should not be relied upon as such. Insured should consult their insurance, legal and other advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Statements concerning financial, regulatory or legal matters should be understood to be general observations based solely on our experience as risk consultants and may not be relied upon as financial, regulatory or legal advice, which we are not authorized to provide. All such matters should be reviewed with appropriately qualified advisors in these areas. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk.

Marsh India Insurance Brokers Pvt Ltd is JV Company of Marsh Inc a global leader in risk management, risk consulting and insurance broking and the Indian partners.

Marsh India Insurance Brokers Pvt. Ltd. having corporate and the registered office at 1201-02, Tower 2, One Indiabulls Centre, Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone Road (W), Mumbai 400 013 is registered as composite broker with Insurance and Regulatory Development Authority of India (IRDAI). Its license no. is 120 and is valid from 03/03/2015 to 02/03/2018.

Copyright 2017 Marsh India Insurance Brokers Pvt Ltd. All rights reserved. Compliance IND-20160516-A

About Marsh

Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 30,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With annual revenue of US$13 billion and approximately 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a leader in providing risk and reinsurance intermediary services; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Follow Marsh on Twitter, @MarshGlobal; LinkedIn; Facebook; and YouTube.

marsh india newsletter april 2017...marsh india’s 9th annual employee health and benefit survey...

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