How can multinationals focused on winning the war for talent benefit from joining the growing trend of writing their employee benefits (EB) business via a captive?
We teamed up with Captive Intelligence at an event in Shoreditch, London, to explore exactly that on Thursday, September 13.
The audience heard presentations from a variety of captives experts from MAXIS and beyond, as well as from multinationals who shared insights into how they successfully implemented a global EB captive programme.
Four key reasons to create an EB captive programme
Captives are important tool for multinationals motivated to manage their EB risks in the face of general and medical inflation, and growing employee expectations. As the ultimate risk bearer, a captive can help multinationals be more flexible about the coverage they offer around the world.
The audience heard how challenging it can be to align a global strategy, when every local market is affected by factors including varying pricing models, local exclusions, and laws and regulations.
Perhaps this is why, according to broker Willis Towers Watson’s spring 2023 update, there has been a resurgence of interest in captives in the last few years.1 And a Mercer Marsh Benefits’ survey found the majority (68%) of insurers expected employers to prioritise plan improvements that addressed the war for talent in 2023, rather than medical plan cost management.2
Nicola Fordham, Chief Underwriting Officer, MAXIS GBN, told the attendees that taking EB risks into a captive, and therefore being the ultimate risk taker for these benefits, can be an enabler to the company’s global EB strategy. It can help multinationals, where permissible in the local market, to:
- influence policy pricing and terms and conditions
- remove exclusions
- implement global minimum standards of benefits
- and apply a global free cover limit.
The power of data
Multinationals can also benefit from leveraging the data that comes from being part of a global network.
At MAXIS, we use digital tools to collect data from local insurers, transform it within an auditable environment, and consolidate it into captive reports and dashboards available to clients via an online portal.
Our experts, Helga Viegas, Director of Digital & Innovation, and Aaron Brown, Regional Manager UK & Ireland, spoke about the power of data in writing an EB captive. They explored the challenges facing the industry – from data quality and timeliness, insurers’ legacy systems, slow adoption, and difficulties capturing the right types of data.
But alongside these challenges come opportunities. Helga explained how multinationals can benefit from data platforms that help with analysing and forecasting EB trends.
“You have greater control when you have access to accurate and detailed data – that’s the great benefit of being in a captive. And that’s why you see a big growth in captives, as well. Because you can get the data, and without data you can’t manage the risk.”
Cost savings and other benefits
In a fireside chat with Captive Intelligence Editor Richard Cutcher, the audience heard from Matthias Helmbold, VP Global Risk Benefits, Health and Wellbeing at DHL, who shared how the company were pioneers in the captive space, being the first company to write an employee benefits captive programme, nearly three decades ago.
Since 2015, DHL’s Health & Wellbeing programme has helped the company to mitigate medical trend, he said.
“At the moment we’re looking at savings north of €10 million on €80 million premium. Those are impressive numbers.”
Marc Bentley, InterContinental Hotels Group Director of Risk Finance, told the audience the multinational’s focus had initially been on improving its EB offering via a captive programme, but it had since realised other benefits too.
“Our original goal with the captive programme was to enhance the benefits we were offering to our people – that was our original aim and we were successful! As much as it wasn’t intended to be cost saving, we’ve also achieved brilliant savings. We’ve probably saved about 30% on premium that was going out of the business, which is obviously positive, but not necessarily one of the key drivers or goals.”
Thanks to all who joined us – we hope to see you at the next MAXIS event!
You can hear more of the fireside chat by subscribing to the Global Captive Podcast and tuning into our upcoming episode.