Benefit strategies in the face of rising inflation

Employers in Asia Pacific currently face acute cost pressures

Externally, with inflation soaring

2015: 2.2%, 2016: 2.3%, 2017: 2.1%, 2018: 2.3%, 2019: 2.5%, 2020: 2.6%, 2021: 2.1%, 2022E: 4.6%

Source: Economist Intelligence Unit (EIU)
Consumer Price Index (CPI) Asia and Australasia (% change)

And medical costs to climb

64% – Insurers expect higher or significantly higher medical trends in the next three years
64% – Report that overuse of care by providers is driving medical costs

Also internally, with employers feeling the crunch

60% – Consider cost optimisation and risk management a top objective over the next two years
43% – Effectively managed costs and risks of benefit programs

In the short- to medium-term, there are many actions employers can take

First, plug the leaks

Renegotiate and redesign
38% of employers derive value from the benefits they pay for.
Action: Ensure robust brokerage strategy leveraging complimentary services and bargaining power.

Do you benchmark?
55% will prioritise benchmarking over next two years.
Action: Ensure your benefits are competitive, but not unnecessarily expensive.

Analytics
59% consider analytics, insights and reporting a key focus for the next two years.
Action: Understand claims ratio trend against market premium and review utilisation to optimise value of investment.

Improve efficiency
47% see greater efficiency in the use of internal resources as a key objective.
Action: Use technology to improve administration and communication.

Next, think outside the box

Finance your benefits
44% state that costs are one of the top external influences on benefits strategy.
Action: Multinationals can manage costs through use of a captive or a pooling network.

Develop specific care pathway
55% are looking at care navigation to positively influence employee behaviours.
Action: Analyse claims to explore the most appropriate and cost-efficient intervention for high-frequency or high-cost conditions.

Listen to your people
44% of employees consider listening strategy a priority to improve their benefits.
Action: Include regular employee listening in benefits management and to shape the launch of benefits and future changes.

Enhance EX, communication and technology
51% of employers say improved employee experience (EX) is a key measure of success for their benefits strategy.
Action: Create a smooth EX and boost employees’ value of their benefits through effective communications and technology.

In the long run, a sustainable wellbeing program will be crucial

9 more days missed per year due to presenteeism
2x more likely to have financial pressures impacting their life
2x more likely to feel burned out from their work
6x more likely to have suffered stress, anxiety or depression in the past two years

Note: Compared to high achievers and doing well employees

Immediate actions for employers to address wellbeing concerns

Partner with existing vendors to address any physical health risks and measure claim trends to achieve real savings over time
Identify opportunities to support and enhance employee wellbeing to create a more resilient and secure workforce
Apply a diversity, equity and inclusion (DEI) lens to ensure minority groups have access to adequate wellbeing support

Sources:
2021 Benefit Trends Survey – Asia Pacific
2022 Global Medical Trends Survey – Asia Pacific
2022 Global Benefit Attitudes Survey – Asia Pacific

Meet our experts

Eva Liu

Head of Strategic Development, Health & Benefits, Asia Pacific

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James Coker

Head of Business Development, Health & Benefits, Asia & Australasia