How has the world of employee benefits changed?

0:13Hello and welcome to this edition of the FT Advisor podcast. I'm your host, senior reporter Tom Dunstan. And for this episode, I am delighted to be joined by Unum UK CEO Mark Till, who will be talking to me about insurance and employee benefits. Thank you very much for joining me. Thank you, Tom. Looking forward to it. The topic of employee well-being goes a bit underreported in our industry, not getting the recognition of other high-profile issues. However, it is no less important and no less prominent. More financial services firms are investing in employee well-being, with 32 % of firms planning to invest a lot more towards this in the near future.

0:49But what are the benefits of this investment, and what is the best way to contribute towards welfare to ensure firms get the most out of their employees? Hopefully we should find out all the answers to that. But first, for the people who might be a bit unfamiliar with your company, can you tell us a little bit about Unum and your work there? OK, great. So Unum is a specialist in employee benefits insurance company. So we're the only one in the UK where this is all we do for a living. And we're part of a larger US parented company that also specialises exclusively in the employee benefits market.

1:24So we have about 3 million customers in the UK provided through the workplace through a large number of employers. What work have you done since becoming CEO? Well, so we've tried to sort of reinvent the profile of the business to try and move ourselves to a position where we can really try and help more people. So at the heart of Unum, we think that what we do is good for society. We tend to we help people when difficult things are happening in their lives. You know, they might be suffering with cancer. They've got something that is taking them away from the workplace. And we think that helping people getting back into the workplace is really important.

2:03And so therefore, we've spent our time trying to work out how can we help more people and setting in plans to grow the business. And in my time, we've moved from looking after about 1.7 million customers to about 3 million customers over the last four and a half years. Moving on to employee benefits, what are the sort of major trends slash developments do you think will shape the future of this landscape? Well, obviously, the part of the market that I work in is more the insurance based benefits as opposed to pensions benefits. But I think the things that are happening at the moment now is post-pandemic, employers are really recognising the important role that insurance-based benefits like life insurance, like income protection, like critical illness cover, dental insurance will play to help keep their workforce fit and active and able to be present in the workforce.

2:58And then you've got the other dimension, which is employees now increasingly seeking services from their employer that they may be finding harder to receive from that from the National Health Service. So I think those two things together create quite a demand at the moment for for a richer benefits proposition as part of an employee proposition for most workforces. And that's sort of as a result of the pandemic. I think the pandemic's been an accelerator of that. And I think we've always seen large companies provide services like this. But I think increasingly smaller companies are looking to introduce more employee benefits.

3:37And what you've also seen is an expansion, even in the large companies, of the range of services that they have on offer now. Another sort of hot topic in the employee benefits sphere, in financial services in general, really, is AI. And I was wondering what your thoughts are on how that will shape the future of employee benefits. So every time I've been and looked at AI and I was I was in Las Vegas last year at the InsureTech conference is most of the business cases for AI at the moment are about efficiency and efficiency that could also improve the user experience. probably less about new innovations and new front of house propositions, but much more about things that will make a business more efficient, streamline the experience of the user when interacting with that company.

4:26So I think you'll see a lot more use of AI, maybe in things like triaging to try and help get people to the right place, reading of a claims record, the gathering of the medical record before a claims assessor starts to look at the claim itself. So I think you'll see more of that. For me, AI will be about augmentation of people rather than replacement of people. But I think that's the trend. I think it's the one thing that everyone talks about with AI is it's going to cut out the sort of tedious work and allow people to engage in the more interesting aspects of their job. That's definitely my view.

5:05I think there will be a lot of tasks at the moment that take a very long time. It might take 15 hours to collect all of the medical records together, read them, analyse them before a claims assessor can start to look at how to help the individual get back to work. You'll be able to streamline so much of that activity to put the claims assessor, for example, in a much stronger position from day one. But also a lot of admin that brokers do will now be able to be, the email will be able to be read and then placed in the right work queue. so I just think there'll be a lot of augmentation for people and as a consequence of that people will do more complicated things and I believe ultimately rather than it just replacing people it'll actually allow people to do more things and the things they do to be actually be more value adding.

5:54So we're putting in a position where the job is kind of the benefit in itself with all the difficult parts cut out. Yeah all those things that are necessary at the moment but are time consuming and not the reason why you come to work. Gathering pieces of paper together to be able to look at them and do your real job. That's not what people enjoy most. And I think systems will be able to do that, leaving more meaningful bits of work and the complex things where human judgment is the important part or where human relationship is an important part. I think those are the things that our people will be doing more and AI will be doing the more mundane things.

6:30If we can focus a bit more about Unum for the moment, how is Unum using technology and digital innovation to improve its services? So Unum has been a market leader in front-facing, customer-facing digital technology. So we launched something called Help at Hand a few years ago. And Help at Hand is the market-leading virtual GP and additional services. So our help at hand proposition has got a virtual GP, a medical second opinion. It's got mental health service, physiotherapist and nutritionist, financial coach, fitness coach. It's got a range of things all within a single app with the ability to refer back to the NHS and to refer between services.

7:15So if you see a GP who feels that you would be best placed seeing a physiotherapist, it will refer you directly to the physiotherapist, not send you back to go and find a physiotherapy answer. So that innovation has been something that Unum has been leading for a while now. And generally, the broker community would credit Unum as being the most innovative player in that market. I think the second area is our web portal services for brokers to be able to interact and do the administration and the quoting and the establishment of a new policy. That's something that we've invested very heavily in in the last three years.

7:53And now I would say our services are as good, if not better, than anybody else we compete with. And our new service is an employer portal. So to help the employer get the most value out of the products that they've got for their employees, we now have an employer portal. And you will see us developing more and more services to go within that at the moment to sit on top of what is currently a claims registration and monitoring service. If I could pick up on the employer portal a bit, how does it help them get the most out of their employees? What's the nature of it? Well, so one of the things that employers are wrestling with, with a workforce is how to keep people with the greatest degree of physical and mental well-being.

8:36So we did a study a few years ago, a couple of years ago, which said that a happy worker in the workforce will have on average nine less days sick and will be more productive by about 30 or 40 percent on the days that they're in. And the single biggest driver of a happy worker in the workplace is somebody whose physical and mental well-being is at an optimal level. So employers are increasingly bringing in services like help at hand to try and help their employees' well-being, mental health, but also the physical health. And you need to see a doctor. That can be quite a time-consuming experience.

9:12With help at hand, you can book an appointment. It'll be a 10-minute slot. it'll be told to you when their time is in advance. Whereas when I phone my local GP, it'll be sometime on Tuesday afternoon. So I'm sitting around, I'm not as productive. I'm thinking about when's the call going to come through? Whereas with help at hand, it will be 3.10 on Tuesday afternoon and I can forget about it until five past three and it's all over at 20 past three. And I think that just keeps somebody in the workforce and more focused on being at work. And then the business case for the employer is then massive.

9:46So people present in the work, doing the work of the company, that creates economic value for the company. It really is a win-win. It's not just altruistic, but it's also efficient. Correct. It's completely efficient. But the bit that drives us in Unum is we do think that helping people be fit and healthy is a good purpose. You know, we talk a lot about what we do is good for society. We help people when difficult things happen in their lives. And I do think it provides a real motivation for our people to know that they're coming to work, helping people feel better, get back to work. We have a vocational rehabilitation service.

10:27And 97 % of people who are referred to us either before they're claiming on our product or at the point of claim, we help get back into work. And that's a massive societal benefit for the individual. but it also means our people feel really good about what they're doing day in, day out. And so what role do you think businesses like Unum can play in supporting health and well-being of UK employees? Well, I think we have a massive amount to offer. I think if you break this into prevention and then treatment, I think in the prevention space, when you're not feeling at your best, whether that's a mental health challenge, a physical problem like a musculoskeletal problem or an illness, getting diagnosis, access to a professional who can quickly help you diagnose and treat.

11:16That is something that we we can really help with through help at hand. But for some people, that early intervention of treatment doesn't stop you ultimately needing to to have a period of time off work. And that's the the treatment phase. And I think at that point in time, not only do you need health service professionals to help you, which we have some, the NHS is the predominant source of that in the UK, but also you need the financial ability to concentrate on your recovery without worrying about the bills. And that's where something like an income protection product where we're the market leader in, that's starting to pay the salary of the individual whilst they're off, whilst they're going through the treatment that will help them get back to work.

12:07So in terms of other businesses, what do you think the do you think they should also follow suit in providing such a service to their employees? really? Yeah, so there's some really interesting statistics. In the UK market for group protection policies, there are 19 ,000 firms currently accessing those policies on behalf of their workforce. That's probably protecting somewhere between a third and 40 % of all people at work. Now, bearing in mind, there's 1.4 million firms in the UK, 19 ,000 is a really small percentage of people who help. And it also means the vast majority of people who go to work are not having somebody helping at the point where something difficult is happening in their life.

12:50And that's what we take as our purpose, our mission in Union, is to try and change those ratios to get more people being helped than not being helped, more than 19 ,000 firms out of the 1.4 million. So I think there's a lot that could be done to try and raise the profile of these types of products because they do provide real added value to workforces and to the employer themselves. And how do you go about encouraging those kind of companies to invest in this employee benefits? So I think you've got two things going on. Firstly, this market works through brokers. We're all hugely dependent on brokers and most large brokers are already dealing with all of the 1.4 million firms that exist in the UK, because pretty much everybody is ensuring some level of their assets or public liability.

13:43So I think brokers who are dealing with that, providing a referral to their health and protection business, would be one of the biggest entry points. The second one is the Charlie Mayfield, Sir Charlie Mayfield review of Keep Britain Working, where he's looking at the things that employers can do to try and help the two 3.8 million people who are of working age but not active in the workforce. So he's got a lot of ideas and we'll get his report in October on the things that he thinks he can do. But when he was with the ABI, he was really clear that the employer will be playing an important role in trying to help the health of the UK working age population.

14:26That report will be quite beneficial for you in in your mission to get more people involved in employee benefits? I think anything that is raising the profile of the types of products and services that are out there that can make a difference, that builds an economic case as well as an emotional case and can advocate for these being part of the mix of the things that you do as a good quality employer. You ensure the public who come onto your premises, you ensure the assets that you own, and you take steps to ensure, protect and preserve your workforce. And I think those things coming together will be important.

15:06So yes, that should provide a lift to our sector as a whole. And the level of take up at the moment, is that encouraging? I think I quoted 32 % of firms are planning to invest a lot more. I think there's a majority of them are planning to invest somewhat in the next year or so. Is that an encouraging statistic? I think anything that says workforce employers are looking to create a richer proposition for their employees is a good thing for anybody who's out there trying to help the workforce is being more effective, more successful. So, yes, it should be good for our sector, for our company. And we think we've got some terrific things to talk about.

15:45But the sector as a whole has got some really interesting answers to try and help employers. I do want to stick on those people who are looking to invest, help guide them into what they should be doing to support their workforce. So in your opinion, what does a thriving company culture look like? Oh, that's a very broad question. So if I bring it back to Unum and think about what we have been doing, because our employee engagement has risen significantly over the last few years. you know we were just voted a great places to work the sunday the sunday times best place to work program has also just accredited us and and in the great places to work program 96 percent of people who work for unum described it as a great place to work and the things that we've tried really hard to do there is to make sure everybody understands what the purpose of our company is to help people when difficult things are happening in their life and connect everybody in the business to that purpose.

16:50The next thing we've been trying to do is to invest in the training, the development and the careers of the people who work in our organisation so they can see a long term future in the business and want to commit their time and effort to helping us be successful. And then thirdly, providing a rich employee benefits package for them, you know, whether that's through salary and pension, but also income protection, death in service cover, dental cover, and a range of things, maternity leave, senior care services and the like. So I think it's that combination of people identifying with the purpose of the company and their role in it, people wanting to commit their careers to an organisation with a great culture, and people who are then looked after in the workplace financially and through their benefits.

17:38I think those things create a great culture that people want to be part of. And I think those are sort of qualities that everyone can wrap their heads around, but the difficult part is doing them well and doing them efficiently. I think to do them well, for me, it's about committing and committing over time, not seeing things as a fad. You know, this time we're going to do this. And then six months later, it feels like it's something else it's about repetition it's about doing these things consistently well over time so that the people who work with you can see it's important can see that you're committed and can align their values with your values because your values are very clear I think when you're constantly moving around it becomes hard for people to understand just what's going on here what is important what is this important to this company that I'm currently working for but i think when you're consistent over time people can go do you know what this is this is me this is where i feel comfortable and we look like we're we're in this for the long run and i think that's where people commit their careers not just their job so the sort of foundation of values rather than being wishy-washy about exactly what you believe in yeah it's interesting in you we we don't put our values on the wall so if you come into our building you will not see our values written across the wall and that's deliberate because we want our values to come through in the way we act not in the things we write on the walls so we we for example if somebody joins our business in the first three months they will they will go on a company company initiated volunteering experience because we want them to know volunteering is an important part of our culture so writing it on the wall and then letting them go and work it out for themselves is one thing being taken to a program to contribute to a local charity to make a difference and then come back and say you can do that anytime you want it's important to us and then showcasing people doing that that's how cultures live and it's about the stories that are told around the organization not the stories that are told by the top of the organization and so for companies that are looking to invest in their employee benefits and their employees in general, how would you suggest that if they didn't have a concrete plan exactly, they just know they want to invest, not exactly sure how, what would you suggest they look into and how should they do it?

19:58Well, I think the first thing they should do is talk to their broker because the broker is the best place to get impartial advice on what it is that will be best for that workforce. And what the broker will do is try to look at all the things that are being done for the workforce, try and help the employer understand the things that good competitors are doing in that sector, because most of us are competing for talent against our competition. And then they can help put together a program for them. From our perspective, in the group risk market, the single biggest product is the death in service cover, group life as the industry refers to it.

20:38In Unum, it's group income protection, you know, the product that helps people when they're having to take an extended period of time off work. But both of those products can benefit from help at hand, that sort of day-to-day interaction that means nobody wants to claim on our products, right? No one wants to claim. But everybody needs to see the GP once or twice a year. Sometimes you have a backache. Sometimes you just want some advice on your finances. Help at hand is the thing that you will interact with lots. And hopefully the sooner you interact with it, the better the experience for you.

21:13Because frankly, everybody wants to keep away from making a claim. No one wants to be off sick for six months or more. That's a horrible thing. I also want to speak on the people who haven't looked into the investment yet. What would you say to them to sort of get them on the same page, to get them into realising that employee benefits are the way forward as you think they are? So what I would say to what I would say to a workforce is look at the amount of sickness and absence your workforce has had over the last two or three years. Almost certainly you've got people going off for medical appointments.

21:47You've got somebody who's gone on to a long time sickness and look at the loss of productivity to your business from that happening. The fact that you'll have either produced less orders or you've had to have hired in a contractor to cover that workload. Those things are quite expensive. And you take an income protection product. On average, it costs about£300 an employee. So these things are very inexpensive and provide an enormous amount of protection that will help ultimately the productivity of the workforce. So any of the group risk providers, any of the brokers, will give you a very clear economic return calculation from investing in any of the products that the group risk sector provide.

22:30I always enjoy a good call to action especially to end the episode I'm afraid that's all we have time for on this episode of the FT Advisor Podcast but please make sure to join us next time

23:00We'll see you next time.

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