The UK’s corporate healthcare industry needs the big employee benefit consultancies to make their voice heard more clearly. Health Insurance Editor David Sawers meets the boss of JLT’s growing healthcare and risk practice to find out why
Although the UK health and risk employee benefits consultancy (EBC) industry is often accused of being stuck in its ways, there is no denying that it has undergone some huge changes in recent times. Big ticket mergers between some of the largest firms in the sector have changed the game – and have done so against a backdrop of stagnant private medical insurance (PMI) sales and challenges old and new for anyone involved in group risk.
So, perhaps, I joke, an actuary who has spent most of his senior professional life in South Africa is surely the ideal person to ask about where EBC–land in Britain should head next.
In fact, Bernie Clark’s ties to the UK – and to health and risk consulting here – are far closer than his SA–tinged accent belies.
LESSONS FROM OVERSEAS
Although he spent 15 years in South Africa, Clark’s career, in fact, began in Britain, where he qualified as an actuary in 1991. It would be just four years, however, before he would decide to give life overseas ago – and moving there with Alexander Forbes, the consulting and actuarial firm, he took to it well.
“Many people who go to South Africa they think we’ll go for a couple of years, experience the country, experience the culture,” he says.
However, rather than simply enjoying a few years in the sunshine before heading home, Clark decided to expand on his actuarial expertise and develop an extensive health & risk consulting skillset.
“What I found was that I could use a lot of my general actuarial knowledge in consulting discussions with corporate clients who ran their own healthcare trust arrangements,” he says. “I ended up dealing with some of our largest clients in South Africa on their trust arrangements helping them as their general adviser and actuary.”
In fact, during his time overseas, Clark found himself running the biggest health consulting team in southern Africa – an experience which included his establishing the South African Government Employees Medical Scheme. Although a small voluntary arrangement to begin with, by the time he left the scheme had over 200,000 families on cover with a target membership, ultimately, of over a million civil servants.
Now, back in the UK – he has been here a couple of years now – Clark has been appointed head of the healthcare & risk business at JLT Benefit Solutions following its merger with Alexander Forbes Consulting & Actuaries Ltd earlier this year – and its acquisition of HSBC Consultants & Actuaries in 2009. He’s up for the challenge but is also keen to stress that his time with AFCA in its own right was vital to shaping his professional outlook.
“Alexander Forbes was a business that I grew up with and loved as an organisation,” he explains. “It had taken me from being somebody who could have become [just] extremely technical to somebody who actually applied a lot of that technical knowledge to the provision of solutions. That’s really moulded my career since then. What really pushes my buttons is building client-facing, solutions-driven outcomes.”
Now, as head of health & risk at JLT Benefits Solutions, Clark is in charge of a team of 36 consultants – including himself – looking for such outcomes on behalf of 2,400 corporate clients. Again, his experience in South Africa should prove useful, he says.
“Probably for the last five or six years in South Africa, my role was far more about mentoring and bringing people through,” he explains, adding that doing so within the country’s framework of black empowerment and equality legislation was a rewarding experience.
Here in the UK, building a consulting model that suits different types of clients is also a challenge that he is enjoying.
The plan following the JLT/AFCA merger, he explains, is to have two teams of distinct health specialists and risk specialists who will only talk to clients on their particular technical subject matter. Alongside that will run a team of composite consultants which can consult on both.
“At AFCA we had a role for a composite consultant and we’ve maintained that,” he explains. “The idea is that, first, we didn’t want in any way to change the client relationship unless we had to. We didn’t want to change consultants, we didn’t want there to be any negative conversation from the amalgamation, we wanted to retain the client relationship as far as we possibly could.”
According to Clark, some clients prefer to have as few “touch points” as possible. In other words, they simply want to speak to the one consultant who looks after both health & risk. Others, however, prefer to go into more detail at a technical level. The model being built following the JLT/AFCA merger will mean room for both.
“Clients can have a specialist consultant if they want,” he says. “They can have a healthcare specialist and a separate risk specialist because they might feel like they’re getting more back, they’re getting more specialty if they deal with a specialist
“We can give clients that model or, alternatively, if they get confused by dealing with too many people we’ll give them a composite consultant, so he or she will deal with all your healthcare and risk requirements.”
Clark suggests that when the JLT and AFCA models were put together it was “just the natural thing to do”.
“As a result of amalgamation we’ve not forcibly changed any client consulting relationship at all,” he says. “Clients can still be seen by the same individuals that they saw before the amalgamation, which I think is a really positive message for them. There’s nothing that a client hates more than having different people to deal with all the time.”
At an operational level, that means that the plan is for JLT’s desk–based team in Bracknell and HSBC’s St Albans team to be merged in Edinburgh with the AFCA team already in the Scottish capital. That process of consultation should close in the coming weeks and will give JLT even more clout north of the border following a deal it secured last year to run Aegon’s £710m Defined Benefit pensions business.
“JLT as an entity now is multifaceted in Scotland,” he explains. “We have over 200 employees in Scotland and we’re very much open for business there in all shapes and forms.”
Of course, JLT’s footprint extends far beyond Scotland and a move later this year to a new global headquarters in London signals its ambitions for the UK and beyond. The St Botolph Building will host all of JLT’s 1,800 staff, including over 250 employees from its employee benefits division. As one of the Square Mile’s biggest leasing arrangements in recent years, the move has been heralded as good news for the insurance industry as a whole.
It’s exciting times for Clark himself, too, as he looks to make the most of JLT’s international connections.
“Increasingly many of the organisations we talk to in this country have an international footprint and as AFCA we had a limited access to the international capabilities,” he says.
“As JLT we have a massive international scope of service. We have an international specialist unit sitting in London but we have international specialists sitting out in 135 countries. So one of the things that really excites me working with the UK market is this ability to be able to deal with international questions.
“There is a desire with many organisations in this country to be able to address benefits all in one place and that might be out of a head office in the US, or a head office in Paris. […] One of the great things for me about the bigger organisation is that we have got this massive capability to be able to co-ordinate the delivery of employee benefits off one organisation and potentially off one platform.”
Although Clark remains, at this stage, reluctant to reveal explicit plans for platform migration and development, it is an area that will prove key as the new, bigger JLT continues to go head-to-head with the other consulting giants in the sector
Recent years, of course, have seen mergers of other large consulting firms, with the emergence of Aon Hewitt and Towers Watson as two single entities as well as last year’s rebranding of Mercer Marsh Benefits. JLT’s acquisitions in its own right puts it at fourth in terms of size when it comes to global employee benefits providers. Clark is keen that it steps up to the plate in terms of influence over how the market evolves and operates.
Well-documented problems facing the UK PMI market, for a start, need to be addressed, Clark says, and the bigger EBC firms need to make their voice – and their clients’ voices – heard much more clearly.
“To expect insurers to drive markets is a dereliction of the consultant’s duty,” he explains. “In my mind consultants have a responsibility to drive markets and to innovate.”
While, of course, an EBC’s responsibility lies first and foremost with their client, today’s corporate customer wants much more than a yes-man.
“It’s very important to have an opinion in the consulting space,” he says. “That’s what people pay you for. I don’t think people will pay you in the new world to transact on their behalf.”
As a result, Clark insists it is important that EBCs play a more central role in the wider discussion about corporate healthcare today and in the future.
“EBCs need to take a role in moulding the future of the healthcare industry,” he continues. “I really do think that there have been a lot of positives and we need to make sure that the positive messages get through. We need to assist the industry in innovating and growing the market.”
While insurers and other healthcare providers need to take their own share of the burden when it comes to solving market difficulties, they are inevitably “one step removed” from what corporate clients want and need.
“They don’t experience at first-hand, necessarily, what they deliver so that’s why I think there’s a responsibility on consultants to influence the discussion to ensure that the industry does deliver on what’s needed and what they [customers] want,” Clark says.
“It’s for the big consultancy groups to stand up and say ‘so many of our organisations have these problems, how can we work with insurers to actually solve them?’”
Clark says it is “anathema” that some of the biggest consultancies often feel like they need to “hide away” solutions to those problems. He’s not, for example, afraid of setting out some of JLT’s best thinking in submissions for the Health Insurance Awards and is looking forward to locking horns with competitors later this year.
“It’s far better for the entire industry to be healthy and delivering really positive messages,” he says. “Then there is room for us all in that growth space.”
Growth space? What growth space?
Clark, although pragmatic, dismisses the doom and gloom-mongers.
“When I came back to Britain I thought ‘how do I take this big corporate skillset and apply it to what is possibly a flat difficult market in the UK?’ he says.
“Fundamentally that’s the challenge I had – and have – taken on.”
Perhaps his undoubted optimism and enthusiasm is a result of 15 years in the South African sunshine. Either way, for the good of the market, let’s hope it catches on.