Paul Moulton, SME and Corporate Distribution Director at AXA Health discusses why insurers are seeing growing employer demand for PMI, despite challenging economic conditions.
Traditionally the two biggest influences on demand for private healthcare have been firstly the economy, in terms of how wealthy businesses and people feel and, secondly, the ability to access treatment in the NHS.
Whilst significant economic pressures remain, but the priority for staff to be able to access health services has many organisations looking to increase their healthcare spending despite the economic headwinds.
Comparison to previous economic downturns
In the financial crisis of 2008, companies took deep and immediate action, with the vast majority of businesses reducing operating and discretionary spend.
This time around there are many of the same drivers in terms of issues around the cost of running an organisation, yet there is growing demand for access to a range of health services.
As a result, many organisations are looking to broaden their health benefit provision rather than cut or reduce it and appear willing to allocate additional budget to support these requirements. This can take the form of extending to more staff access to traditional support in terms of intervention to treat acute illness, through to providing access to support in such areas as digital GP services, mental health, menopause support, fertility, neurodiversity and male and female healthcare more broadly.
How to justify costs
Whilst it is recognised that there is a very symbiotic relationship between demand and cost - if there is more demand, the overall cost to businesses will rise – in more benign times this would typically lead to a reduction in demand. However, in the current circumstances people are less likely to give up their medical cover.
Many organisations have looked at a modular approach to offering health benefits thus ensuring more access to help and support if required whilst retaining a sensible balance between value and cost.
Overall investment in the health-side of benefits is on the rise as employers recognise the value it brings to their people.
Competing in the war for talent
Alongside increasing budget allocation to healthcare to ensure the health of staff, employers are also mindful of a tight labour market which has itself been exacerbated by rising long-term sickness absences.
During lockdown, many organisations froze recruitment and development, and the end result has been an increase in the war for talent.
People are re-evaluating where and how they want to work. As such, it is absolutely crucial that alongside compensation, employers are able to offer attractive healthcare and risk benefits within their wider reward strategy. It’s not just employers who understand the pressures on the NHS, so do their employees.
Medical insurance has always been high up the list of priorities, but it, and other health services, are becoming more and more important when employees look at potential career changes.