Employee benefits networks in 2024 and beyond
How have EB networks evolved and what trends do we expect to continue?
If you’re reading this, chances are you already know what an employee benefits (EB) network is. But just in case you don’t, an EB network brings together local insurance providers from countries around the world, enabling multinational companies to provide employee benefits for their people in whatever local markets they operate in. MAXIS GBN is one of eight employee benefits networks in the market,1 connecting multinational clients with local insurers around the world and creating global insurance programmes (often via reinsurance) to help them care for their people and meet their strategic goals.
For a long time, the role of EB networks was purely reinsurance. Multinationals wanted solutions that helped them to manage risk and control their costs. But as the world of work has changed and the role of an employer has shifted accordingly, have EB networks evolved to become more of a partner to multinationals?
This month, we sat down with experts from the global consultants, local insurers from our network and our own people to discuss the evolution of EB networks over the past five years, and to make some predictions for the next five.
Eight benefits networks?
As we mentioned, we work in a small market. There are just eight EB networks, and Federico Morosi, Chief Technical and Financial Officer at MAXIS, doesn’t see this number increasing in the future. He said “It’s a very small, concentrated market. There are high barriers to entry for insurance as a whole, but the barriers to entry for a new player among the existing EB networks are even higher, so there might be some consolidation between the key players over the next five years.”
This theory is supported by Monique Heemskerk from our local insurer in the Netherlands, Achmea, who said, “Over the next five years, we think that number of networks in the EB space will narrow down to just four or five. We expect to see some more competition and hope that being the only insurer in the Netherlands looking to actively reinsure will pay off and help us to maintain a competitive advantage.”
What makes a successful network?
In a small marketplace, how can networks succeed in differentiating themselves? Sven Roelandt, Global Leader EB Financing Strategies at Aon (upper right), offers a consultant’s perspective. He said, “The most successful global EB programmes will be found in long-term partnerships based on mutual trust, well defined procedures and communication, underpinned by transparency.”
Similarly, Sebastian Willmanowski, Multinational Financing Leader at Mercer Marsh Benefits (lower right), said, “Insurance is, and will remain, a people business, so building a long-lasting relationship based on clearly articulated expectations from all relevant parties will remain the cornerstone of success.”
"Insurance is, and will remain, a people business"
So, no matter how the market looks in the future, and how many key players remain, it’s clear that trust and open communication will be key to success.
The growth of captives
We can’t talk about the future of EB networks without talking about captives. Traditionally, captives have been a solution used for property and casualty business. However, over the last decade, the benefits of writing EB risks into a captive are being recognised, with more centralised multinationals being able to retain underwriting profits and gain greater control over both pricing and their EB offering in doing so.
Paul Lewis, Chief Business Development Officer at MAXIS GBN, said “I think the biggest trend that we’ve seen over the past five years is the continued and increasing evolution from traditional multinational pooling to the newer financing strategies, such as captives, with captives utilising the networks as their fronting partner for employee benefits.
“Traditionally the main reason to put EB in a captive was to manage risks, or as a cost control vehicle, but in the last few years, and especially since COVID, the additional benefit of having more plan design flexibility is front and centre. We’re seeing more multinationals entering the EB captive space to advance their DE&I (diversity, equity and inclusion) strategies and provide cover for the things that matter most to their people.”
This is echoed by Nicola Fordham, Chief Underwriting Officer at MAXIS GBN, who said “There has been a big change in the motivations behind writing EB in a captive over the last five years. The key driver was initially underwriting profit, but now multinationals are worrying less about making money from a captive and more about doing the right thing for their people.
“Of course, some companies are primarily focused on profit, but there has been a real shift towards providing the cover that employees truly want and need. "Employers are looking to achieve a global minimum standard of benefits for their people, and this is something that a captive enables.”
And the growth of captives isn’t slowing down. Tom Levi, International Employee Benefits Consultant at WTW, shared his thoughts. “Over the next five years I’d expect to see more multinationals using their captives to achieve globally uniform EB plans, helping to meet both their DE&I commitments, and the individual needs of their people. I think that employers will be looking to provide the most consistent coverage possible to all employees, regardless of where they live and despite barriers created by local insurance policies.”
Paul Lewis reiterated this point, focusing on a centralised approach, “While the last five years has seen the development of local wellness plans, I would expect that over the next five years, more multinationals will be trying to drive global wellness solutions from the centre. While lots of local insurers provide locally relevant wellness services, not all markets are as mature. Choosing a global approach does have advantages, too. They allow multinationals to take a more uniform approach to addressing key topics such as mental health support, women’s health, family health, and so on, and by doing that from the centre they’re able to collect more meaningful data from it at a global level, which they can use to inform future decisions.
“DE&I is a key topic and it isn’t going anywhere. I think that’s where EB networks can step in and provide value. There will be an increasing focus on how multinationals can continue to design inclusive benefits packages and utilise EB financing as the vehicle to advance these more quickly than they would be able to with the local insurance market.”
"DE&I is a key topic and it isn’t going anywhere. I think that’s where EB networks can step in and provide value."
Increasing appetite for health and wellness solutions
Plenty of common themes emerged when discussing the future role of EB networks and a few of them are intrinsically linked. You’ll have noticed that almost every discussion about captives links back to employee health, minimum standards of benefits and DE&I.
Following the pandemic, there has been a huge shift in focus towards health and wellbeing, and this is something that multinational employers have to respond to if they want to attract, and retain, top talent. There’s an increased appetite for health and wellness solutions and support, with employers looking to truly care for their people, and offer them solutions beyond traditional insurance products. This is another key theme when thinking about the future of networks.
Speaking on this, Dr Leena Johns, Chief Health & Wellness Officer at MAXIS GBN, said “Over the past five years, we’ve seen a remarkable and uplifting transformation in the industry. More and more, employers are looking to go beyond the provision of basic medical coverage and are recognising the connection between the workplace and wellbeing, and wellbeing and productivity.
“We’re seeing multinationals encouraging healthier lifestyles, but also helping employees to bring their whole selves to work by truly caring for them and addressing their specific needs and challenges. At MAXIS, we’re increasingly approached by our multinational clients to discuss the health and wellness solutions available in our wellness technology marketplace, helping them care for their people and address challenges which traditional medical cover does not. This is a great way for us as a network to add value for our clients.”
But what is the role of the network in this increased demand for health and wellness support?
Paul Lewis says “I would say that we’ve seen an increase in the appetite for health and wellness support, both locally and centrally. The role of the network here is to work at the local level much as possible to integrate local health and wellness solutions which react to local market conditions. There has also been an increased demand for centralised support, which is something MAXIS can help our clients with by providing value added services such as health and wellness tools and resources, as well as data analytics, to help our clients really understand and care for their people.”
The role of data and technology
Again, we see another link emerging – the importance of both access to, and analysis of, data. Federico Morosi agreed. “Over the next five years I’d expect our clients to be increasing their EB offering, but also to be getting greater insights from their data and what it’s telling them about their people. More and more, our clients are concerned about their employees’ health and wellbeing.
“By using their claims data, employers can see what the most effective wellness interventions will be. Data shines a light on the workplace and helps guide multinationals to the right programmes that will help the unique needs of their people.”
But what about technology?
“Over the years we’ve only seen the use of technology and data grow.” Helga Viegas, Director of Digital & Innovation at MAXIS GBN, said.
She continued, “Our role as a network is to provide clients with interactive views of their portfolio and advanced claims analysis, which helps them with mitigating risk and looking after their people, and this role of providing insight and analysis has taken priority over getting a dividend from the programme.”
Helga finished, saying “We’re starting to see clients becoming more data and analytics savvy, and they’ll be looking for us to help them with building their own analysis.”
Tom Levi agreed – he expects smart data to be key for the future, “Over the next five years it will be key for networks to give clients ownership of their data, letting them define specifically what they want to receive so that they can manipulate the data in their own systems, rather than receiving a reporting output decided by the network.”
And the importance of a data-led future is also acknowledged by local insurers...
Both Richard Saunders, Key Client Director at AXA Health, and Adrian Matthews, Head of Employee Benefits (UK & Europe) at MetLife UK, spoke about data.
Richard (left) predicted that “the key for the next five years will be the ability to share health and wellbeing data through automated electronic channels”, and Adrian (right) noted that “networks will play an increasing role in providing data-led insights and solutions that help clients develop global employee benefits and health strategies.”
Looking to the future
It’s undeniable that technology and data are key for the future of EB networks. Technological advances will improve the way we share data, and there might also be some changes in the data that clients want to receive from EB networks as they become more sophisticated.
But what’s also clear, behind this data-led future, is the human focus that sits at the centre of EB. DE&I has risen to the top of corporate agendas over the past few years, and the post-pandemic focus on health and wellbeing isn’t going anywhere either. Multinationals looking to attract and retain the top talent will continue to turn to EB networks to help them truly care for their people and ensure they’re providing the benefits employees want and need, rather than simply looking at the underwriting margins.
And in turn, EB networks will need to prove that they are a true partner to multinationals, and really adding value, if they want to succeed among the key players in the industry.
Mattieu Rouot, CEO at MAXIS GBN, summarised things nicely, “we have an important role to play in helping our clients in their local markets, via our network members, and in supporting them at a global level. We can help influence local insurers to evolve and meet the demands of multinationals and we can evolve centrally with global solutions and support, too. The future of EB looks to be focused on the personalisation and customisation of benefits, and networks need to be prepared to partner closely with multinationals to help them achieve this in the future.”
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[1] AIA, Allianz Global Benefits, Generali GEB, IGP, Insurope, MAXIS GBN, Swiss Life Global Solutions, Zurich Global Employee Benefits Solutions. Source: WTW, 2023 Global benefits financing matrix and poolable coverages https://www.wtwco.com/en-ie/insights/2023/03/2023-global-benefits-financing-matrix-and-poolable-coverages (Sourced November 2023)
This document has been prepared by MAXIS GBN and is for informational purposes only – it does not constitute advice. MAXIS GBN has made every effort to ensure that the information contained in this document has been obtained from reliable sources but cannot guarantee accuracy or completeness. The information contained in this document may be subject to change at any time without notice. Any reliance you place on this information is therefore strictly at your own risk.
The MAXIS Global Benefits Network (“Network”) is a network of locally licensed MAXIS member insurance companies (“Members”) founded by AXA France Vie, Paris, France (“AXA”) and Metropolitan Life Insurance Company, New York, NY (“MLIC”). MAXIS GBN, a Private Limited Company with a share capital of €4,650,000, registered with ORIAS under number 16000513, and with its registered office at 313, Terrasses de l’Arche – 92727 Nanterre Cedex, France, is an insurance and reinsurance intermediary that promotes the Network. MAXIS GBN is jointly owned by affiliates of AXA and MLIC and does not issue policies or provide insurance; such activities are carried out by the Members. MAXIS GBN operates in the UK through its UK establishment with its registered address at 1st Floor, The Monument Building, 11 Monument Street, London EC3R 8AF, Establishment Number BR018216 and in other European countries on a services basis. MAXIS GBN operates in the U.S. through MAXIS Insurance Brokerage Services, Inc., with its registered office located at c/o Katten Muchin Rosenman LLP, 50 Rockefeller Plaza, New York, NY, 10020-1605, a NY licensed insurance broker. MLIC is the only Member licensed to transact insurance business in NY. The other Members are not licensed or authorised to do business in NY and the policies and contracts they issue have not been approved by the NY Superintendent of Financial Services, are not protected by the NY state guaranty fund, and are not subject to all of the laws of NY. MAR01317/1223
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