Although not a household name in its own right, the chances are that Capita will have provided some sort of service to your clients in the past. Health Insurance editor David Sawers met Jason Powell, managing director of Capita Health & Wellbeing, to find out more about his organisation’s plan for the health and protection industry
Financial advisers, brokers and employee benefit consultants (EBCs) up and down the country who don’t quite know what Capita does soon will – in a big way.
Although not quite the household name that some big brand insurers might be, with some 46,500 employees and an established place in the FTSE 100, Capita provides services across a number of industry sectors, supporting local and central government and the private sector. Recruitment, HR, transport, call centre management, the London Congestion Charge, the Criminal Records Bureau – Capita’s reach and breadth of expertise goes on and on.
But what about life & pensions? Its group pensions business ranks fourth in the administration of UK private sector schemes. In insurance, it works across claims, service sales and back office administration in personal lines, commercial insurance and Lloyd’s and the London Market.
And health? Yes, that too. As well as providing a range of support services to the NHS, it is a leading provider of occupational health (OH), absence management, health screening, medical reporting and employee assistance programmes.
And as managing director of Capita Health & Wellbeing, Jason Powell is keen to make Capita as a whole a more visceral presence in the world of health insurance and protection intermediaries. This year’s acquisitions of Aviva’s UK OH business, Bluefin’s employee benefits consultancy operations and Medicals Direct could mean realising that ambition is almost inevitable.
THE ROAD TO CAPITA
Powell joined Capita in May 2010, when the organisation acquired Premier Medical Group, a medical reporting and screening provider he himself had invested in after spells in the print and packaging industry and at Bupa, where he had worked as an accountant before spearheading a number of projects as head of innovations, from a ‘find-a-nanny’ service to developing an insurance product for people involved in motor accidents.
A self-confessed “corporate venturer”, Powell left Bupa in 2006 after meeting Dr Harry Brunjes, the well-known Harley Street entrepreneur who had set up Premier Medical Group, a provider of medico-legal reports, rehabilitation, life medicals, health screening, private GP clinics and OH services. It was a meeting that would prove to be key. From sketching out what turned out to be a hugely successful business plan for Premier Medical Group with his new business partner ‘on a doily in a restaurant’ to helping him to build it up into an organisation with a turnover of £12m and over 50 staff, Powell relished the entrepreneurial freedom the opportunity presented.
But with a MBA and a palpable appetite for deal-making, was he not concerned that joining a huge corporate like Capita would reign those impulses in?
“I don’t consider myself to be an entrepreneur but I do consider myself to be what they called on my MBA a ‘corporate venturer’,” Powell explains. “I do like the whole investment, M&A [mergers & acquisitions] sort of stuff and if that’s the way you are geared, there is no better place to be than an organisation like Capita.”
According to Powell, Capita’s “decision-making engine” is reflective of a company much smaller than its size.
“Capita has the balance between freedom of operation and corporate governance absolutely spot on,” he says.
That claim is being put to the test right now, as the organisation beds down a number of acquisitions relevant to the health insurance and protection industry made earlier this year.
The most recent one – Medicals Direct – was announced only last month and will add further weight to the screening and medical reporting capabilities offered by Premier Medical Group and Insurance Medical Group and FirstAssist, two similar organisations acquired by Capita over the last two years.
Medicals Direct gathers medical evidence, underwrites risk, conducts teleinterviews and manages claims for many of the main life, income protection, disability and critical illness providers in the UK and Ireland. And, as well as other OH and absence management services, Powell believes it neatly forms yet another part of the Capita jigsaw.
“Following the Aviva [OH] acquisition earlier in the year and now this investment in Medicals Direct, Capita Health & Wellbeing is able to provide screening services in clinic, through our mobile units, over the phone and at our customers’ home or workplace,” he explains.
CAPITA AND AVIVA
While Medicals Direct will especially boost Capita’s home screening capabilities, the Aviva OH acquisition gives it additional mobile health surveillance expertise and reach.
“The Aviva OH book of business had a very, very strong emphasis on surveillance and using their network of mobile screening units was really the key reason for us acquiring the business in the first place,” he says. “Their mobile units are unrivalled in the marketplace.”
According to Powell, Aviva’s decision to sell its OH business was not because it did not see it as “strategically significant” to its overall proposition.
“They sold it because they felt, as we felt, that a credible OH business needed to have scale,” he explains. “It needed ongoing investment which is difficult with a subscale business. Scale gives it capability that really allows you to service on a national basis and so they were looking for someone to buy the business that they could work with in the longer term.”
Capita has retained Aviva’s staff in Sheffield, although they have relocated to a Capita office nearby, all of the internal structures and reporting lines have stayed the same and the deal was done on the basis that the organisation would be the insurer’s long-term OH provider.
“The other thing that comes with the acquisition is a much stronger and deeper relationship with Aviva UK Health,” Powell explains. “Often, OH and health & wellbeing is sold alongside private medical insurance [PMI] or group income protection [GIP] and therefore it suited us to deepen our relationship with Aviva.”
Essentially, that means that if Aviva provides a PMI or GIP scheme with an employee assistance programme (EAP), for example, then that EAP will be supplied by Capita. The Aviva acquisition also gives Capita an even stronger foothold in the City and it is now providing executive screening and other services from the insurer’s former OH clinic in Bury House to banks and other financial institutions, as well as different sectors such as media, construction and businesses involved with the London Olympics.
And while providing services to the banking and financial services industry at walk-in clinics in London has not been central to Capita’s offering to date – as it has been to the likes of Roodlane Medical Group and Blossoms Healthcare – that could be about to change.
Although HCA International, the London private hospital group, recently acquired Roodlane and took a stake in Blossoms, the two organisations “would have been logical next steps for us”, Powell says. Walk-in GP services, for example, which are offered by Roodlane and Blossoms Walk is “a very small part of what we do” but Powell sees that changing.
“Absolutely,” he says. “It’s an easy area for us to move into and we can do it very well.”
Walk-in clinics, Powell says, form part of Capita’s overall approach to providing end-to-end health and wellbeing services to insurers, employers and beyond.
“People are realising that there needs to be some innovation around what people are doing from a wellbeing point of view,” Powell says. “The traditional ‘just buy an EAP or just invest in a few health promotions’ kind of approach doesn’t really work. There needs to be some kind of integration around how a wellbeing strategy fits with an overall staff engagement strategy and how wellbeing helps to power and energise that whole engagement process.”
INTERMEDIARIES
According to Powell, intermediaries are key to joining together the dots and that is why he was pleased by the news earlier this year that Capita is to acquire Bluefin Corporate Consulting – the deal does not include the Bluefin trading name, nor Bluefin’s commerical lines or personal consulting businesses – from AXA for a cash consideration of £50m on a cash-free, debt-free basis.
“Wellbeing is really, really important and the traditional product set around wellbeing doesn’t really do it,” he says. “There needs to be some investment and innovation in that whole area. […] There needs to be some big innovation in this space and we are delighted to be able to work with Bluefin as a potential distribution partner to pilot some of this sort of stuff.”
Powell dismisses the usual concerns over intermediary independence that similar acquisitions typically prompt. Just as Bluefin’s EBC business operated independently when owned by AXA, so it will under Capita’s ownership.
“I’m in Capita Health & Wellbeing and Bluefin are part of Life & Pensions,” he says. “They were an external potential partner and client of ours and now they are an internal potential client and partner of ours. Our relationship with them is a normal commercial relationship. My incentives aren’t necessarily tied to their incentives and vice versa and they will make commercial decisions that are right for their businesses as we will for ours.”
In any case, there are plenty of other intermediary partners that Capita is keen to work with too. It is a business sector that excites Powell.
“The insurance intermediary arena has a highly dynamic and complicated set of relationships and as long as everybody is transparent about what those relationships are then there is no reason why we wouldn’t be able to work with other intermediaries,” he says.
If there are many intermediaries that aren’t that familiar with Capita now, then, that could be about to change.
“We intend to work with other intermediaries,” Powell says. “Similar conflicts exist elsewhere; some firms actually provide some OH services. That’s not going to stop me working with those intermediaries.”