Demand for data about an employer’s workforce has perhaps never been greater.
This is particularly true of SMEs who make up the vast majority of UK businesses and are consequently increasingly being asked to shoulder the burden of improving labour productivity across the country.
But as they invest in health and wellbeing initiatives, they increasingly want to know how these interventions are boosting their bottom line.
Leveraging access to health data can also enable advisers to drive down premiums, but while insurers can see the value in greater transparency around this health data, they also want advisers to understand the reasons behind rising premiums.
Though what it is clear is demand for this data will only increase as a healthy workforce will always be a more productive one.
Driving down workplace inactivity
Driving down workplace inactivity has become a key objective of the Labour government.
In March, Work and Pensions Secretary Liz Kendall announced a £1bn package aimed at tackling workplace inactivity.
Key role of health data
But it is clear that UK plc, particularly SMEs, cannot tackle the problem unless they understand it properly.
Pippa Andrews, director of corporate business at Vitality Health, tells Health & Protection health data provides organisations with “unique” insight into what is happening within their workforce.
“When it comes to health, data can directly help businesses understand what is impacting their workforce, whether its mental health, chronic health conditions, trouble sleeping etc,” Andrews says.
“This in turn gives them the insight to implement strategies and targeted interventions that will be meaningful to their employees, giving them a healthier workforce, driving productivity, and minimising the operational costs of ill health.
“For SMEs, health data is especially critical given that even a few absences can significantly impact business outputs and productivity.
“We are also increasingly finding that people are actively seeking this support, with 77% of SME employees believing their employer should offer health and wellbeing support.”
Addressing specific health needs
Ally Antell, health distribution director at Aviva UK, explains data-driven insights can help SMEs allocate resource more effectively by tailoring health and wellbeing support that addresses the specific health needs and preferences of their employees.
“In doing so, they can be confident that they are investing in areas that will deliver the highest return in terms of employee health,” Antell says.
“By analysing health and absence data, SMEs can support what’s important to their employees and identify common risk factors among their workforces.
2This allows them to implement targeted interventions that can help improve employee health outcomes and in turn help maintain morale, motivation and productivity.”
Importance of tackling problem properly
The reward for tackling these issues is clear.
Lucie McGrath, health, equity and wellbeing lead, in WTW’s health and benefits business, explains that its 2024 Wellbeing Diagnostic data indicates that organisations that are addressing wellbeing effectively see human capital and financial outcomes that are double those of organisations that are less effective in their approach.
“And we know from our 2024 GBAS research that higher levels of wellbeing reduces absence, increases productivity and engagement and supports individuals to thrive in the workplace,” McGrath says.
“We additionally see that organisations who are effective at communicating with their employees, have a strong culture of inclusion/respect and have engaged and responsive line managers see better health and wellbeing engagement among employees – which in turn leads to higher productivity and better health and financial outcomes.”
Return on investment
Better engagement and productivity are key components in assessing return on investment.
According to Gavin Shay, distribution director at Equipsme, there are two times that businesses look for health insurance data.
“At the point of purchase they want to know the return they’re going to get on their investment in a group health plan, and then at the point of renewal they want to know people have actually been using it,” Shay says.
“What both come down to is: ‘is this going to make a difference to the business’?
“To help address the first question Equipsme recently partnered with workplace health insights company Fruitful Insights. Together, we can work with businesses to model the specific return on investment they can expect, based on the demographic of their workforce.
“Our joint research shows a potential return of around £3 for every £1 invested in Equipsme health plans.
“It’s having real traction with businesses as they face squeezed budgets and rising costs.
“Ultimately it supports FDs to make a confident decision that investing in health can mean a faster return to work from sickness absence and higher productivity across the organisation.
“Right now, that is resonating more than a somewhat fluffier conversation about employee engagement.
Securing data from multiple sources
But assessing this return on investment is no easy task – particularly for SMEs.
Mike Tyler, co-founder and chairman at Fruitful Insights, maintains data is important to organisations of all sizes but smaller firms have fewer claims and hence it is more difficult to identify meaningful patterns from this data alone.
“Hence, it is vitally important that they assemble data from multiple sources and in particular lead indicator data from the employees themselves,” Tyler continues.
“From these data sets it is then possible to improve employee wellbeing by being more precise in the interventions needed to address health and wellbeing deficits and this directly translates into a more productive workforce.”
Driving smarter business decisions
And this all leads to smarter business decisions, Michelle Bishop, global practice leader, multinational benefits and mobility at Gallagher, says.
“For SMEs in the group health insurance space, good data drives smarter decisions,” Bishop continues.
“A simple data programme can track employee health trends, cut absenteeism, and invest in preventive care. But what does this actually look like?
“Fewer sick days, lower turnover, and a more engaged workforce.
“Without data, SMEs will lag behind, and with it, they can optimise benefits, control costs, and keep employees healthier and happier.”
Non existent data
Rachel Western, health and risk principal at Aon, points out the data can be “non existent”.
“On SMEs the level of data is pretty much non-existent making this a harder task for SME’s other than through their own data sources such as absence data, if collected,” Western says.
“On SMEs the size of clients creates some challenges due to data protection requirements, but more could be provided, despite data protection issues.”
Rising premiums
Where data can be accessed, Kristian Breeze, director of healthcare at Ascend Health, says better terms can be negotiated.
“As premium increases continue to challenge SMEs, leveraging this data allows advisers to negotiate better terms by demonstrating proactive risk management,” Breeze says.
“Insurers, in turn, benefit from reduced long-term claims exposure, creating a win-win scenario.”
Claims performance
According to Mike Hesch, head of UK employee benefits at Engage Health, over the last year or so providers have been “much more willing” to supply at least an indication of claims performance.
“This may be a simple loss ratio and details of potential high claims, but even this information can help clients understand the need for an increase,” Hesch says.
“Those providers that offer health and wellbeing products and services along with the traditional medical treatment are also able to offer reporting relating to these extra services and this really helps to identify potential risks and opportunities from a wellbeing perspective.
“Not all providers are as open as others so we would like to see more of the market coming forward and supplying more claims data, especially for the smaller clients.”
Meeting evolving expectations
This openness is crucial, Bishop maintains, who says insurers and advisers must work hand in glove to meet the evolving expectations of their clients.
“As a result, insurers are expanding their arsenal to include deeper claims insights, predictive analytics, and smarter pricing models,” Bishop says.
“The average insurer’s digital platform will track cost drivers, flag risks, and generate wellness strategies.
“Other insurers are rolling out usage-based pricing to keep premiums sustainable. By arming advisers with better data, the very best insurers are helping SMEs make informed choices and manage rising costs more effectively.”
More consultative approach
The good news is that there is evidence that parties are working more consultatively.
Paul Nugent, CEO at Santé Group, says: “We’re seeing a marked shift towards a more consultative approach, where advisers and SMEs collaborate to create tailored health solutions.
“This partnership model focuses on understanding the unique needs of each business and utilising data to develop personalised wellness programmes.
“Additionally, there’s a growing emphasis on managing premium increases by using data-driven insights to guide decision-making.
“As advisers become more strategic partners, SMEs benefit from solutions that are both cost-effective and beneficial to employee wellbeing.”
Understanding pricing
Although Axa Health points out it is important that advisers understand the rationale behind pricing.
“This is so they can provide this information to SME decision makers,” a spokesperson for the company said.
“Advisers can use their expertise to help SMEs choose the right propositions and work proactively to tailor the cover to suit, ensuring an SME is getting the best value for money and the full benefit from the product.
“With the increase in costs and rising demand, data will become more important and greater in-depth analysis will likely be needed.
“Industry trends, business trends, new developments and ways to maintain levels of support will all be key areas of SME and adviser focus.
“There is also a greater understanding and focus on employee health and wellbeing, which relevant data, analysis and tools can help to support, enabling SMEs to focus their efforts on running their business.
“Ultimately, understanding this focus is crucial as a healthier workforce is a more productive one,” Breeze says.
“According to the CIPD, 1.8 million workers in the UK are off sick for over four weeks annually, significantly impacting SME output,” Breeze continues.
“By analysing claims and health data, businesses can identify common health risks and tailor benefits to address them, whether that means adding mental health support, musculoskeletal treatment pathways, or faster access to diagnostics.”
