In the first extract from the Health Insurance & Protection Industry Report 2019/20, Suzanne Clarkson provides an overview of key dates, plus industry and government developments to watch out for this coming year with regards to both individual and group health and protection markets
Disability & inclusivity
The Chartered Insurance Institute (CII) and the disability charity Scope recently published a good practice guide for employers in the insurance sector. It looks at how the industry should collaborate to help improve access to careers in insurance for all, but especially those colleagues with a disability – seen or unseen.
Johnny Timpson, Protection Specialist and Cabinet Office Disability Champion for the insurance industry and profession, says the industry should be leading on this by getting involved with the DWP’s Disability Confident programme – the first step towards becoming a disability friendly employer. He adds that the more companies from the insurance sector that get involved, the bigger the industry voice at government level.
“In order for us to ask the government to help us promote the uptake of protection products in the way it did for pensions with auto-enrolment, for instance, thereby helping to also meet state targets, the group risk and individual protection industries should champion being a part of Disability Confident.”
Access to insurance workstream
The industry members of this DWP-led workstream have been busy looking at how to provide greater access to products and services through the workplace. Much work is being done to ensure that underwriting is increasingly fair and inclusive – and it is hoped this will continue throughout 2020 and beyond to result in:
- A more inclusive approach to underwriting of individual protection products
- More protection products for renters, the self-employed and gig workers
- A fairer approach to underwriting individuals with a history of mental health issues
ABI Mental Health Working Party
In 2019, the ABI focused on setting out measurable standards for insurers and brokers to follow when dealing with customers with a history of poor mental health. Its guidelines are expected to be publishing during the first quarter of 2020.
Sick pay statements
Legislative changes coming into force in April 2020 will mandate employers to give employees access to a written statement of particulars of their employment, including their entitlement to sick pay, from day one of their employment. This could represent a great opportunity to show people that the state entry point benefit is Employment & Support Allowance at £3,801 a year versus group income protection.
Social Care Green Paper
The long-promised social care green paper is still to make an appearance. Perhaps now, with some government certainty, this might happen in 2020 at some point. In the meantime, the insurance industry is doing its best to help fill the funding gap. And indicators from certain quarters suggest they will step up their game further – if possible – once the government’s intentions are known. 2019 saw the launch of VitalityLife’s innovative Dementia and Frail Care cover (DFCC) and DFCC+ was subsequently introduced to offer a greater amount of cover. This is a ‘post serious illness’ cover solution for later life, which can be bolted on to the provider’s serious illness cover (SIC), ensuring that once SIC cover expires, DFCC kicks in.
Consolidation & growth
While there was some market consolidation in 2019, we’ve also seen new entrants over the last 18 months. This is testament to the renewed potential now evident in the health and protection industries. In January, Howden, part of Hyperion Insurance Group, announced the acquisition of UK employee benefits health and protection consultancy Punter Southall Health & Protection Holdings. Meanwhile, lifestyle insurance start-up yulife officially launched at the end of 2018, with a proposition built upon rewards and benefits to employees (users receive ‘yucoins’ – a type of wellness currency) for wellness activities and healthy habit changes using a gamified app. After officially opening to the market in 2018, Guardian enjoyed a busy year in 2019, including the launch of a competitive combined life and CI cover option, following adviser feedback, to sit alongside its standalone products.
While the impact on business of leaving the EU is still as yet largely an unknown, there are some certainties: that it is happening is one! According to XpertHR, employers should prepare for the UK leaving the EU on 31 January. It suggests writing to employees who are European Economic Area nationals to urge them to apply for settled or pre-settled status, so they can remain living and working in the UK indefinitely.
Imminent changes to the IR35 legislation could impact those private sector companies where contractors are deemed to be full-time employees. The original IR35 is being replaced with the new ‘Off-Payroll Tax’ in private sector companies in April 2020, following its introduction into the public sector in April 2017. IR35 is a word used to describe two sets of tax legislation that are designed to combat tax avoidance by workers and the firms hiring them, who are supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used. Such workers are called ‘deemed employees’ by HMRC. Although as yet still not 100% clear, it is expected that such contractors could become entitled to a suite of many benefits to which they previously weren’t entitled, as suggested in the 2017 Taylor Review of modern working practices.
Added value benefits
Finally, as an increasing number of added value benefits – everything from virtual GP services to employee assistance programmes and health screening – are either bolted on or integrated within group and individual health and protection products, there remains a question mark over whether advisers should be highlighting these aspects more during the advice process. The stumbling block right now for advisers is that there’s just too much to keep up with, to the point where some have reported populating their own spreadsheets of added value services by provider just to keep up with who’s doing what. While streamlining such services would seem to make sense, that’s obviously not going to prove a popular option with the insurers who see these aspects as differentiators. Comparison portals don’t seem to have this sorted yet either, although F&TRC’s Quality Analyser is apparently much more comprehensive than most when it comes to added value services.