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Are we ready for a 'New Normal'?

Corona virus is leaving its mark in the business world, presented us with unprecedented challenges and opportunities. It might change the way we work for ever, which means new protocols, new way of working, new set of compliance, new set of social security, taxation, health & safety requirements, overall well-being of the employee and of course new set of benefits for the employees.

The businesses around the world are trying to adapt to the ‘new normal’. It is now more important than ever to rethink, re-imagine, reinvent the way we organise the needs of employees’ well-being while focusing on goals and success of the business.

Employees are the most important assets, not just stocks & shares and buildings. During these turbulent times, it is now time more than ever to keep our employees well-being is at the top of the agenda.

There are lots of uncertainties. Many are predicting economic crisis like we never witnessed before. The reality is, we don’t know the actual impact this pandemic will cause. However, we know that:

  • Trillions of $ wiped out of the stock market

  • Millions got infected with Covid-19

  • Hundreds of thousands died

  • 100s of millions lost their livelihood

  • Millions of businesses are likely to closed, particularly the smaller enterprises

What is happening during the lockdown?

General trend in the insurance world during the lockdown:

  • Increase in demand for insurance

  • Increase in premium

  • Increase in claims during the pandemic, in the healthcare and car insurance sectors

  • Majority of the claims during pandemic were rejected

  • Many are asking what the point of insurance is if they don’t cover unforeseen circumstances.

  • Questions are being asked, why pay the same premium when the risk exposure in a lockdown is low. Car and medical insurance some of the examples.

Apparently well over 2/3rd of the claims were rejected during the pandemic. Denial of coverage is frustrating businesses. The trend is that the pandemic will lead to huge demand for insurance. Insurers are looking to capitalize on these opportunities. The question is, will they offer cover for ‘pandemic related claims’? Will Insurers be more transparent in their coverage and pricing? Will the insurers reinvent themselves to serve the post-corona market expectations?

What can we expect post-lockdown?

The world of insurance will never be the same again. Just as 9/11 terrorist attack changed how the world look at terrorism insurance, the pandemic will change the way we think about insurance in general.

Corona virus has done more to raise public awareness of the role of insurance than ever. More and more seem to become aware of the risk and necessity of insurance. Legislation in countries are likely to change to protect employees post covid-19, preparing way to the ‘new normal’. More employers would be looking to review coverage have and ways to cover pandemic related claims.

Post pandemic – new level of insurance cover while maintain cost?

Post lockdown, our expectations are going to be high - costs for reaching those expectations will also be high. Question is – would it be possible to bring cost efficiency, while searching the post covid-19 insurance benefits.

It’s most likely that your pre-pandemic perks, and benefits won’t hold up after pandemic scenario. The benefits promoted a year ago may seem antiquated, stale, outdated. Many companies are undergoing transitions, restructurings, and downsizing as a result of the pandemic.

A key response for employers should be to examine and rebuild benefits packages. Employer needs new, creative benefits to retain and attract talent. Remote working initiative is no longer going to be a privileged benefits offered to a few. Gym membership and other perks are no longer will be seen as a wow factor. We need to rethink how benefits will be offered.


There are thousands of Indian multinational corporations operating outside India. If we look at their global spending on insurance outside India, it is in 100’s of billions of USD.

If we look at a typical Indian multinational corporation, 2/3rd of the workforce are based in India, while 1/3rd of the workforce outside India. However, if we look at the expenses, 1/3rd of the expenses are for the workforce in India, while 2/3rd of the expenses related to workforce outside India. Benefits offered in India are very low comparable to international counterparts. We have a long way to catch up.

Most multinational companies today are decentralized, local operations are run autonomously, leading to multiple benefit plans across the world.

Clients today would like insight into:

  • Financial aspect of the insurance benefits – costs of the benefits, factors of the costs, streamlining benefits

  • Global control and oversight – are we effective? How can we leverage global scale?

  • Resource management -what steps can we take to keep employees healthy, technology to gain efficiencies

  • Employee appreciation – action to increase employee engagement. Steps can we take to achieve better productivity.

Consolidation and harmonisation of global benefits is the best way to achieve cost efficiency and transparency.

GBM (Global Benefit Management) is one of the consolidation & harmonisation solutions and enables multinationals to manage employee risk benefits on a global basis, centrally and provides the following:

Visibility and control over benefits

  • What the benefits offered in various countries?

  • How much governance is needed to be effective?

  • Are the benefits benchmarked country by country?

It helps clients to understand full transparency of services and fees

  • Why does it cost so much country by country?

  • What are the fees/charges, commissions country by country?

  • Are we communicating value and cost of benefits to employees?

Centralized monitoring of benefits delivery and up-to-date information

  • Can we use technology to achieve efficiency?

  • How can we increase employee engagement?

  • What measures can we take to achieve better productivity?

  • Who are the vendors

Cost savings by global leverage with insurers

  • How much can we save using global buying power?

  • Can we centralise procurement process?

  • What are the cost of the benefits?

  • What are the factors drive costs?

Global Profit Sharing agreements

  • Are there other mechanisms to agree share of the profit globally

  • What measures can we take to control claims?

Global Program Example

In the above illustration of GBM example, assuming claims remains the same, before consolidation the administration costs and commission goes down, in fact, commission can be eliminated, most importantly - the profit margin for the insurer and no margin for the clients. After consolidation - the profit for the client is high, and not much for the insurer. This can be the effect of global consolidation. In short - if claims are low, the client can benefit financially if the global programs are consolidated via GBM. Without consolidation, the insurer retains unused claims fund in case of low or no claims.

Hot tips for post lockdown in the world of Insurance

As tempting as it may be to continue to evaluate group benefits as it done in the past, it’s best to sit down and methodically review the whole benefit strategy. Adjustments benefit designs to your new business model. This could be an opportunity to make sure you are insuring your business to the best of your ability and reduce cost.

Employees will remember the actions employer took during pandemic to keep them safe, that legacy will be remembered. If your legacy is not a good one, you’ll likely lose people once the job market improves.

For cost efficiency, ensure employees are healthy. Happy, healthy, safe employees give increased productivity and fewer claims which results in lower cost.

Download GBM explained in infographic:

GBM version 1 (7)
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