Disrupting Employee Benefits

Firms in Asia are starting to differentiate their employee benefits programs in order to brand themselves as employers of choice. They are increasingly aware that the health of their employees is key to their ongoing success and that there are significant costs associated with not having a healthy and engaged workforce.

In Singapore, where premium costs are rising 10% per annum, 73% of firms expressed concern about their worsening workforce health. And 75% want to offer flexible benefits for employee choice, but cite administrative burden and cost as obstacles to doing so.

In light of this, companies want to stand out as holistic workplaces that care about their employees’ wellbeing and engagement, but struggle to justify the ROI for corporate wellness or flexible benefit programs.

Focus shift to preventive care

Fortunately, help is on the way, thanks in large part to the unprecedented level of entrepreneurial activity sparked by US Health Reform. To date, more than 90 new healthcare ventures have emerged as Obamacare ushers up to 30 million uninsured people into the US healthcare system by 2023.

Employer-based enrolment in the Obamacare private exchanges doubled to hit six million for the 2015 plan year, demonstrating a long-predicted move
of employee benefits from defined benefit to defined contribution.

The new law aims to radically transform the underlying business model of healthcare. Until now, the model rewarded doctors for the number of treatments and hospital visits provided. Under Obamacare, the emphasis has shifted to value-based care, where hospitals get remunerated not to treat patients but to keep them healthy and avoid treatment.

South Africa’s Discovery Vitality programs

One of the earliest pioneers was South Africa’s Discovery, which was founded when the country transitioned from apartheid to democracy in the early 90s. With an under- supply of doctors and a ban against pre-existing condition discrimination, Discovery saw an innovation opportunity to directly incentivize preventive care.

Their Vitality program offers customers discounts on fitness classes, health food, and personal fitness devices. It then rewards customers with healthy lifestyle choice with premium discounts.

This progress is not only ideal on the customer satisfaction front, but also fitting for insurers’ profitability. Using data and predictive analytics to refine their pricing and underwriting models, they are able to expand their offering to the most relevant customer base while rewarding the healthiest customers in a variety of ways, from reduced premiums to gym package give-aways.

Oscar and Zenefits

Another example is the New York-based insurance startup Oscar.  A mere 16 months after launch, Oscar already has 40,000 customers and is valued at $1.5 billion. Customers are no doubt attracted by the ability to use a slick website to input symptoms for tele-video consultations with suggested doctors and to earn rewards for staying in shape using Oscar’s free fitness trackers.


Zenefits, a San Francisco-based benefits broker founded in 2013, has 10,000 SME customers serving over 100,000 employees and is viewed by Silicon Valley as the fastest growing SaaS startup ever. Valued at $4.5 billion, Zenefits succeeded by turning the traditional HR software model on its head, giving away free payroll, benefits and 401k software, in return for SMEs purchasing their employee benefits through the Zenefits platform.

Similar programs in Asia

Inspired by this transformational shift, the West is not the only place reinventing employee benefits. Asia, with its tight talent market, early onset of chronic diseases and some of the world’s most rapidly ageing demographics, is seeing rapid innovation as well.

First off the block is Great Eastern with their health loyalty program Live Great. AIA is bringing the Discovery Vitality model to Asia, disrupting traditional insurance models one country at a time. And Aviva has launched their Fit&Well program in Singapore as part of their group insurance package.

Unlocking workplace wellness

In the brokerage space, tech startup CXA has launched Asia’s first insurance and wellness marketplace, helping companies unlock workplace wellness without having to spend more.

Similar to Zenefits’ model, companies appointing CXA as broker, receive the platform at no additional cost, together with its data analytics, flexible benefits and workplace wellness administration. The defined contribution platform also allows employers to control and cap medical premium inflation.

Shifting their existing healthcare expenditure from treatment to prevention, healthy employees, or those already covered by the benefits of their working spouses, can convert the group insurance dollars they do not need into “spending dollars” to purchase discounted services from CXA’s cashless online marketplace of voluntary benefits, fitness classes, health coaches, health checkups, nutritionists, diabetes management and corporate wellness providers. Those who make measurable lifestyle improvements are rewarded with more spending dollars.

Insurers leverage CXA’s SaaS platform to distribute to SMEs across Asia via their bancassurance, agency and direct channels. By year-end, CXA's platform will have over 500 firms and 100,000 members in countries including Singapore, Hong Kong, China, Philippines, Malaysia and Thailand.

Customised health insurance policy for each 
individual


According to Julien de Salaberry, co-author of the book iDisrupted, “technology is set to disrupt the insurance business so much that it will be virtually unrecognisable within a few years.”

He claimed that it is not unrealistic to imagine a future where health insurance will be provided by new entrants able to access, manage, analyse and interpret exponentially growing healthcare data to provide each one of us with a customised health insurance policy. Furthermore, he said computers will carry out many of insurers’ core activities completely within a few years.

Innovation in the employee benefits landscape is increasingly allowing companies to focus their HR resources on improving health, productivity and engagement for employees and their families alike