Future outlook – expert insights

What in your opinion is the biggest challenge for the employee benefits industry in 2013? 

AON

As an industry, our biggest challenge is the rapid ramp-up of global scale to meet the demand for integrated solutions in plan design, financing, and administration of benefit programmes at a consistent level of quality and at an affordable cost for clients with staff fragmented across the globe.

HENNER

For intermediaries, the main challenge lies in making the equation work between higher pressure on margins (as clients are increasingly cost-driven) and rising servicing expectations. Sales and operational efficiencies, as well as transparency, are key to sustainability. For risk carriers, the challenge is building a balanced book and sustainable growth in an increasingly competitive environment with greater emphasis on compliance and the added costs this brings.

JLT

For many multinational companies this will be to ensure continued compliance with corporate employee benefit strategies, which includes consolidation of brokers, consultants, and insurers, and a more clearly defined approach to multinational pooling. Another clear challenge, however, is the legislative change impacting local benefit plans and ultimately corporate budgets.

KESSLER

The financial situation due to the crises, low yield, and longevity. Compliance issues and regulatory constraints (e.g. from a specific Swiss optic: the possible acceptance of an initiative against abusive remuneration). 

MERCER

To meet the requirements of large corporations for solutions that satisfy their demands for cost control of programmes; effective delivery backed by relevant analytics and data; and further tailoring of benefits provision to the needs of their employees. Also, access to quality, affordable healthcare for an increased number of individuals in both mature and developing countries.

TOWERS WATSON

The implications of low interest and growth rates. These impact defined benefit liabilities and assets, as well as defined contribution plans through the cost of purchasing annuities and the potential return that employees can earn. This re-highlights the need for multinational companies to understand and manage their financial risk exposures globally, and to improve outcomes for employees in defined contribution plans internationally.  

What are the most challenging aspects for multinational companies when dealing with employee benefits in 2013: internal human resources, complexity of employee benefits, financial aspects, or others?  

AON

With limited financial and internal resources, multinationals must simultaneously deal with cost drivers such as pent-up demand for benefits in emerging markets, population ageing, increasing benefit plan regulation, and spiralling medical costs around the globe, plus intensifying cost control pressures from globalization, especially in a service economy where employment costs are the main expense item in income statements.

HENNER

Some of the challenges we see for companies arise from them harmonising their employee benefits programmes across countries and populations (locals and expats). This is done both for social as well as compliance reasons. Another key element is financial sustainability, as medical inflation is driving up premiums and affordability is an increasing issue.

JLT

Some key issues will include ensuring that the various parts of the company communicate effectively to ensure that common goals are met. Procurement teams are taking a much more leading role in employee benefits, and it is crucial that they understand the importance of benefit provision in order to reach the best possible decisions on benefit provision and external partner selection.

KESSLER

For sure these three named aspects, and also in our view, internal communication regarding employee benefits as a whole, including the influence of the headquarters on their local subsidiaries. Varying fiscal regulations in different countries. 

MERCER

To make use of benefits as a tool to maintain and attract “Gen-Y” talents, and to globally manage employee benefit programmes. Increased governance of employee benefits is high on the agenda of multinational companies, and the challenge will be to meet their needs for increased cost control, risk management and central governance of global benefit programmes.

TOWERS WATSON

Different companies are in different places. However, many face cost pressures and have limited pay-increase budgets, so they must ensure that they maximize return on investment. The key is to show what role benefits play in the “employee value proposition”. Often, there is similar pressure on the benefits function itself to “do more with less”, i.e. with less in-house expertise internationally. 

In the current economic situation, which of the following topics are high on your or your clients’ agendas: life, health, wellbeing, expatriates, or something else? 

AON

Managing the increasing cost of health care together with making sure you have a healthy and productive workforce are the two highest-ranking items on our clients’ “benefit” agendas. Employers who still have DB plans continue to look for ways to minimize risk and to cede the management of these plans to a third party.

HENNER

We see health programmes and their costs as one of the main topics under scrutiny. This implies a need for better reporting, better analysis of benefits and plan adjustments, better cost containment, etc...

JLT

There are several important topics for our clients, with key areas including better communication on benefit provision to create stronger employee appreciation for benefits provided by their employer. Health and wellbeing are very topical, particularly when promoting ‘Healthy Living’, which ultimately supports improved health in general, greater productivity, and more manageable healthcare costs.

KESSLER

Large companies: pension and health
Mid-size companies: expatriates

MERCER

All of these are important, but as pension and health represents the highest cost, we believe these will take priority along with an increased interest in preventive measures on the well-being side. Effective communication of programmes is also important, and on the talent side we see a closer link between mobility planning and career development.

TOWERS WATSON

Health and wellbeing, and pensions/retirement benefits..  

Looking forward into 2013, what are the strategic aspirations for you and your firm?

AON

To assist our clients outsource the management of their benefits programmes. Whether this is from a governance, design, financing, administrative, or communication perspective, we are in the business of global benefits, not our clients. We want to be seen as the pre-eminent supplier of one-stop global benefits solutions.

HENNER

With regards to our international activities, we are putting our firm into gear to go from being a specialist in international health insurance to an international specialist in employee benefits.

JLT

Our focus is very much on putting our clients first and delivering top-quality broking and consulting services internationally whilst offering transparency in our approach. We seek to provide innovative solutions locally, regionally and globally, and to create efficiencies through the use of technology.

KESSLER

To verify possibilities for pooling new multinational accounts and expanding and/or managing existing accounts.

MERCER

Our aspiration is to further strengthen our position as the main global provider for employers for the advice, management, risk- and cost control of their global benefit programmes. We believe that 2013 will be the year when the full effect of the combined employee benefits resources of Mercer Marsh Benefits will provide added value to our customers.

TOWERS WATSON

We will continue to focus on client demand. The challenging business environment has created different pressures on clients, so the needs of our clients have diversified. It remains a constant and interesting challenge to serve their varying needs and deliver long-term value for our diverse multinational clients. 

Broker and consultant profiles

AON

Francois Choquette

Executive Vice President Aon Hewitt, global leader of Global Benefits business. With 25 years of international consulting experience in Montreal, Toronto, New York City and San Francisco, he has been involved in project work in over 60 countries, with personal delivery in over 20 countries.

HENNER

Alexis Obligi
Deputy Managing Director, Global Sales 

Responsible for international sales and development over the last three and a half years, he also oversees the Medical department, which is an essential element of the company’s service delivery for its international operations. Since February 2013, he has been responsible for global sales for the group, as well as for the Marketing department. He has lived and worked in Europe, Asia Pacific and Latin America.. 

JLT

Alan Hewitt
International Benefits Director, JLT Benefit Solutions Ltd.

He has worked in international benefits for 23 years, having started his career with a pooling network in Brussels. Following this he was with Sedgwick Noble Lowndes (which was integrated into Mercer) in London, Beijing and Brussels, and Aon in London, Brussels and Paris. For the last three years he has been International Benefits Director at JLT in London.

KESSLER

Werner Niederberger

Employee Benefits Specialist, ARM, CIB, Practice Leader Pooling, trainee instructor. He has been with Kessler since 2002. As the Swiss partner of the Marsh Network, Kessler consults multinational Swiss clients around the world, as well as subsidiaries of foreign multinationals in Switzerland.

MERCER

Jimmy Johansen

Partner and Head of Market Development with  International Consulting in the Nordics, located in Oslo. He has worked with Mercer or Mercer-related companies since 2000, including two years in Singapore where he was responsible for some of Mercer's largest international clients in Asia. His brief has covered retirement, benefits, and M&A-related work, which he continues to be involved in. He has 15 years of experience with expatriate policies, retirement and benefit plans for multinationals. Prior to Mercer, he was the International Employee Benefit and Pension Manager for a European Global Fortune 500 company, and before that he worked in the life insurance industry.

TOWERS WATSON

Christopher Mayo
Director International Consulting Group EMEA.

Head of a team of 90 associates focused on serving the needs of multinational client headquarters. He has advised multinational companies for more than 20 years and been involved in a wide variety of multi-country projects, with a particular focus on cross-border M&A.