Perks over pay: get and retain the best talent.

Perks over pay: get and retain the best talent.

Fancy a free massage at work? That’s what Google offers staff who nail a successful project. In California, Patagonia posts daily surf reports (and the odd company wide broadcast when it’s particularly gnarly) to encourage staff to run out and catch a wave in the middle of the working day. A London based ad agency offers “Botox Leave” (self explanatory).

Perks make a huge difference to a business’ ability to recruit and retain good talent. HR consultants Robert Half found six in 10 Australians prioritise perks over pay – so much so that that eight in 10 would happily accept benefits instead of money if employers can’t meet their salary expectations.

But staff don’t necessarily want the weird and wonderful benefits. They often want more sensible, potentially life changing perks, such as health and life insurance. UK research shows 37% of employees see life insurance as one of the top three employee benefits they value.[1]

It’s easy to see why given the high cost, high reward nature of life insurance. Many of us are eager to financially protect ourselves and our family should the worst happen. The “worst” includes death, a total permanent disability or a loss of precious income in a country where the cost of living is a constant pressure.

An employer who can cover life insurance premiums, therefore, offers a perk of tremendous, potentially life changing value to current or potential staff.

Yet only 4% of SME employers offer life insurance as a benefit. Legacy infrastructure, systems and technology have made it difficult for bigger, older insurance providers to develop simple products for new markets like SMEs.

Not being able to offer perks to recruit top talent, then, can be another reason small business owners can’t compete against big companies for quality employees. 80 per cent of SME bosses aren’t satisfied with their recruitment pool or process, according to the SME Hiring Challenges Survey commissioned by Cameron Research Group for Michael Page.

We’re changing that. Integrity has developed a unique product in the Australian market called Five+, which offers a combined income and life insurance product for small to medium businesses – available to owners with as few as five employees.

It’s the first group product that combines both income and life insurance, and that can be purchased online. Five+ is also the only product that offers an income benefit to the employer as well as the employee.

Luring away or protecting top talent from big business will always be a challenge, and not every small business can offer free breakfast and a company car. Now you can offer at least one powerful, useful perk – the same protection for your employees (and their families) as the big end of town. And you look great without Botox anyway.

 

[1] Employee Benefits Magazine,  2017 UK

Suzie Brown

Suzie Brown

General Manager Distribution

Six ways to beat seasonal stress this holiday.

Six ways to beat seasonal stress this holiday.

As fun as the silly season is, it can also be stressful for many people. To help you along, we have gathered some great tips from some of the leading experts in Mental Health to help you out.

1. Think before you commit yourself.
We can often perform tasks merely to feel accepted by other people; there is no better example of this than the holiday period, when we try to squeeze everything into our diaries. Practice saying ‘no’ to requests that are unreasonable or more than you can handle at the time, rather than suffer subsequent regrets and stress.

2. Practice meditation.
Here’s an easy one! Imagine air as a cloud. Open your imagination and focus on your breathing. As your breathing becomes calm and regular, imagine that the air comes to you as a cloud: it fills you and goes out. You may imagine the cloud to be a particular colour.

3. Set aside time each day for recreation and exercise.
Gentle repetitive exercise such as walking, swimming and cycling are good for relieving stress. Meditation, yoga, pilates and dance are also excellent. The trick is to find what suits you best. Hobbies that focus attention are also good stress relievers and can give you a sense of achievement and satisfaction.

4. Watch your alcohol intake.
It’s easy to get caught up in festive activities, and sometimes a drink or two can feel like a solution to a problem, but it will only help temporarily. Drinking can create more problems in terms of physical and mental health. Consider the effects you are looking for (sedation and stimulation) and whether or not you can achieve them differently.

5. Perform small acts of kindness.
Performing five kind acts a week creates a measurable boost to levels of psychological wellbeing. Giving not only makes you feel good about yourself, it enhances your connection with others and can bring you positive feedback from others.

6. Don’t do it alone.
For some of us Christmas can be an overwhelming time and sometimes isolating, but we don’t have to do it alone. If times get tough, pick up the phone and talk to someone you trust.

Integrity Life

Integrity Life

From the newsroom

Exclusions while travelling at home and abroad.

Exclusions while travelling at home and abroad.

As Australians get ready for the holiday season and families come together from across the globe, domestic and international travel increases. While it may not have occurred to you, this leads insurers to think about the risks associated with travel. To understand the reason for restrictions on locations and the inclusion of war and terrorism exclusions in insurance policies, we need to look to the past.  So, let’s go back in time to start at the beginning.

Originally, war exclusions were placed on life insurance policies as a solvency protection measure i.e. to ensure a large event didn’t send an insurer broke! Australia’s population is quite small by world standards, so if a large number of your insured lives went off to armed conflict, and many were killed, then that has a huge impact on the pool of lives – it could lead to life insurers not being able to pay claims. Now, this was relevant when wars were fought by large armies (often volunteers from the civilian population rather than professional soldiers – think of WW1) and pre-dates solvency measures we have today (regulated by APRA).

More recently, a derivative of the war exclusion was developed; the War, Terrorism and Armed Conflict exclusion. The life insurance industry adopted the idea that terrorism risk should be excluded – because many life underwriters got caught up in exaggerated risk perpetuated by politicians and the media. Statistically, you’re more likely to be struck by lightning or drowning in a bathtub than be the victim of a terrorist attack. This is despite Aussie’s being very enthusiastic travellers overseas.

The terrorism exclusion has also now become somewhat outdated, and not just because the incidence of terrorism is so small.

The expectations of the community and Integrity’s view of what is fair and right is that, in the event of a customer being killed by terrorists, we would want to assist the member and pay the claim. Therefore, Integrity Life does not use a terrorism exclusion.

It’s worth acknowledging that general travel risks are managed using the Australian Department of Foreign affairs and Trade travel warnings. Cover will not be offered if the prevailing travel warning is ‘reconsider your need to travel’ or ‘Do not travel’. But as you can imagine, most of the countries falling into these categories are not popular holiday destinations.

If you’re already insured with Integrity – great! Your policy provides 24/7 coverage worldwide. Plus, if you have our Care Support Package, we can help get you home should you have experience serious injury or illness.

Scott Hodgson

Scott Hodgson

Chief Underwriter

Understanding mental health and life insurance.

Understanding mental health and life insurance.

If you read the headlines, you can be forgiven for thinking that insurers don’t understand mental health. Certainly not the nuances between a ‘tough patch’ as a response to a normal life and a debilitating condition. With 1 in 5 Australians experiencing mental ill health, it’s a topic that’s not going away, so we spoke to our Chief Underwriter and industry veteran, Scott Hodgson, for his perspective on why insurers struggle to support and understand mental health. 

Let’s jump right in, Scott. Why do you think underwriters (and insurers) have such a tough time grappling with how to handle mental health?

Scott Hodgson: At a company level, mental health conditions are a major cause of claims, and so life insurers want to understand the risk to manage it over time (so they can get the pricing right). It’s a very sensitive topic at a personal level and so advisers and underwriters find it hard to discuss with some applicants. Plus, it is difficult to properly classify the risk when assessing it, as individuals all have different responses to life events – and different diagnoses can often be made for what might be similar triggers for a mental health issue.

Additionally, there are no universal clinical indicators, for example blood tests, for mental health conditions, so diagnosis and treatment requires skilled practitioners, and even the medical profession finds treating mental health patients complex.

What is your view on exclusions related to mental health?

Scott Hodgson: I’ve seen a worrying trend of automatic exclusions without really understanding the situation. If for example, you have a major life event (loss of a loved one for example) and you see a psychologist, perhaps you’re even on medication temporarily, but you didn’t take a heap of time off work and this was years ago, I don’t see why this would mean an exclusion. But because the risk cannot always be quantified it is necessary to exclude in some cases. This is preferable to not offering cover at all, and of course over time the exclusion can be reviewed. Once sufficient time has passed and the condition is managed well (or has receded) then the exclusion may be removed.

Is there any good news on this front in terms of changing attitudes, policy and research?

Scott Hodgson: Fortunately we now have good public policy around mental health, much more openness and de-stigmatising in general as well as better training of general practitioners in respect to mental health, plus access to Medicare supported sessions with psychologists. So while it might seem like mental health conditions are at epidemic levels, it is simply that these conditions are now being discussed and disclosed. Hopefully this leads to much better management than in the past. In time gone by you may remember a neighbor or relative who had a “nervous breakdown” that was discussed in hushed tones? These days anxiety and depression related to life events should be considered manageable conditions, that need empathy from the community.

 

Scott Hodgson

Scott Hodgson

Chief Underwriter

Designing flexible products that work for ‘real life’.

Designing flexible products that work for ‘real life’.

It’s been said that life insurance is ‘sold, not bought’. Partly this is due to the complexity of products but also because human nature is to believe ‘it won’t happen to me’. The key to advisers being able to have meaningful conversations with clients is the mutual understanding that comes from a simple product that is grounded in the real world. The conversation should be about the lived experience not detangling complexity. To better understand how we have approached this challenge, we spoke to Head of Retail Product, William Rogers.

So, Will, could you talk us through how you approached the product design? Where did you start?

Will: When we started to design products, we took the time to undertake detailed customer research to understand what advisers and their clients wanted and where the opportunities were to improve life insurance in Australia.

To bring the product to life, we approached the design with ‘simplicity’ as the key focus. Simplicity leads to greater understanding of the value of a policy and allows advisers to have better, more meaningful conversations with their clients about the life they want to live and not get bogged down in the complexity that is endemic in the life insurance industry.

The modular design of our product is simple to look at (pictured below), so while most people would be familiar with the cover types, could you talk us though what you mean by ‘shared product features’?

Will: Good question! The simplicity in product design allowed us to focus on 3 key elements within the product being, Shared product features, 4 core covers and our unique Care Support Package. This focus on the 3 elements delivers a fully featured but simplified retail product.

The shared product features are those elements of an insurance policy that are available on or apply to all core covers.

A few that are worth calling out are features like ‘guaranteed renewable’ and ‘guarantee of upgrade’. This guarantee of upgrade provides policy holders with the certainty that when an enhancement is made to a benefit or medical definition within their policy, we will upgrade their cover to the new standard. Should they claim, we will assess their claim based on the terms at the time of their claim as well as any period of time from when they took out the policy.

We don’t have any policy fees or minimum premium. One of our guiding principles that goes hand-in-hand with simplicity is transparency. The price is the price. We don’t believe in adding fees and service charges on top of the premium.

Cover increases in line with CPI, that is the actual CPI not 5%. This means that for our policies, the actual increase applied for CPI for 2018/19 was 1.6%. This means cover increases at a pace that aligns to what our policy holders are seeing in their life and reduces the risk of over insurance.

Premium relief options. This includes the ability to freeze the annual premium amount which caters for policy owners who see the value of their cover however may be facing financial pressures to retain their cover.

We believe in these brilliant basics that should apply to all our core cover types. By making them standard and grouping them together it keeps our PDS simple and easy to understand.

What is the ‘Care Support Package’ and why is this separate?

Will: The Care Support Package groups 9 benefits which are generally seen as ancillary benefits within IP and lump sum covers into a single package or option that can be linked to a single cover – whether that be income insurance or a lump sum cover. Once you add this to our covers, we believe it becomes superior overall cover while maintaining the simplicity.

Benefits that are included in the Care Support Package include Accommodation Care, Home Care, Grief Counselling and Professional Services benefits.

It also includes a Terminal Illness benefit – which provides a benefit to a life insured in the form of a reimbursement where they have less than 30 days to live. This benefit can be used in the way that they need. This could be to have their family support network around them, in a tent in the middle of Bondi Beach to watch the sun rise or spend these final days in their own home, with their support network of doctors, family and friends close at hand.

It should also be noted that the Care Support Package fee is waived when you take out three covers or more. 

William Rogers

William Rogers

Head of Retail Product

How can the advice industry persuade people to pay?

How can the advice industry persuade people to pay?

A seismic shift in the advice industry is already underway and we are at the dawn of a new era for advisers. This transformation is being driven by an urgent need to repair the fracture in consumer trust across the financial services industry. There is a universal agreement that, in order to achieve this, measures must first be put in place so the needs of consumers are the priority. This will ensure that businesses act fairly, honestly and transparently in the best interest of consumers.

Legislative guardrails are being put in place, with the banning of grandfathered commissions across wealth more broadly one such example of these protection measures. But whilst adviser commissions have become a controversial issue amid fears they encourage mis-selling and other anti-consumer behaviour, the evidence is indisputable that the advice industry, built primarily on a commission structure, has had a profoundly positive impact on the finances of Australians who receive advice.

Banning commissions has a far-reaching impact on the entire industry, largely because there is, as yet, no alternative remuneration structure accepted. We know that upfront fees are not popular. For consumers, going from paying nothing upfront to potentially paying thousands is an almighty jump – particularly given a general unwillingness and lack of precedence in paying for advice.

Fee for service models are standard across so many industries – consumers are happy to pay lawyers, plumbers, designers, marketeers and many other occupation groups for their time. So why not advisers? A lack of immediate reward or gratification is likely to be part of the issue, but we also have an image problem. It is difficult for our industry to tell the good stories of when insurance has helped, because death and illness are still very much taboo topics. We also face headwinds from the commoditisation of life insurance, and this undermines the value of advice in helping consumers select a policy appropriate to their needs.

We are left in a difficult situation and advisers could be forgiven for feeling like they can’t win – consumers are disapproving of hidden or opaque remuneration structures but extremely unreceptive to the idea of being presented with a bill. Clearly something has to give.

In order to ensure the advice industry is sustainable, the industry must change perceptions around the value of advice and the role it plays in helping consumers to obtain products suited to their circumstances.

It is clear that consumers need more time to get comfortable with paying an upfront fee for advice so for now, it may be that commissions are the preferred remuneration structure, but with far greater transparency, in order to build trust in the adviser consumer relationship. As well as having full visibility of adviser remuneration, consumer choice should be an important factor to winning back trust. Giving the client choice in the way they pay for insurance advice puts the power back in their hands.

At Integrity, we recognise that change has been a long time coming. We’ve built our systems with a huge amount of flexibility in mind to allow a variety of fee options with the basics like commission, fees, a mix of both, and even split commissions We are trying to make it easier for advisers to build those great relationships with their clients, ones that are based on trust and transparency. This also means simplifying the process for both parties. Advisers are able to give their clients full visibility of premiums and the factors that impact their calculation.

Resolving the complex issue of remuneration will require insurers and advisers to work together in consultation, collaboration and education with consumers. To ensure our industry moves forward with consumers it’s essential that we move to a model where advisers are remunerated fairly – and where their clients see the value of their adviser’s fee.

Suzie Brown

Suzie Brown

General Manager Distribution