An organisation’s growth and success depends largely on its people, so investing in employees and showing them they’re valued for the work they do is crucial. Group insurance is a powerful – and surprisingly affordable – way workplaces in Aotearoa can boost business while ensuring employees feel healthy, financially secure and looked after.
A group insurance scheme (also known as a workplace insurance scheme) is a package bought by a business or organisation for the benefit of its employees, and might include one or more types of insurance e.g. life, health, disability, trauma and income protection insurance.
Benefits of group insurance to organisations:
Attract and retain top talent
When the labour market is tight, finding the right people is hard work, and hanging onto them can be even harder. Companies that provide personal insurance cover as part of their employee benefits package stand out as employers of choice. According to the 2022 EMA Workplace Wellbeing survey, over half of Kiwi employees think Health Insurance is a key benefit when considering changing jobs.
Group schemes also help in retaining valuable employees. When employees feel invested in and looked after, they’re more likely to remain loyal, which reduces the cost and time of having to rehire and retrain new staff.
2022 EMA Workplace Wellbeing survey result highlights
Potential cost savings and flexibility
Group insurance schemes can be a cost-effective and flexible solution for organisations launching or expanding a workplace wellness programme. Group insurance typically accounts for about 0.5% to 1.0% of an organisation’s total payroll expenses. ‘Groups’ can be as small as five employees, ensuring accessibility across a wide range of NZ workplaces.
While some organisations offer group insurance policies as a free perk to their workforce, others might opt to partially subsidise premiums, or simply offer group policies as a cheaper alternative to insurance bought independently.
Enhanced productivity
Through group health insurance, employees are incentivised to proactively address their healthcare needs, resulting in swifter diagnoses and timely treatment. This can mitigate absenteeism and reduce productivity loss. Similarly, through group income protection insurance, employees are equipped with essential support to navigate periods of incapacity, allowing them to concentrate on their recovery without the added burden of financial stress. Ultimately, this can accelerate their return to work.
Benefits of group insurance to employees:
Financial security
Group insurance policies act as a financial safety net, providing employees and their families with financial support in the case of a claimable event. This security can significantly reduce stress and allow them to focus on recovery or manage a difficult time without financial burden.
Employees get automatic policy acceptance if they’re under the age of 65, and pre-existing medical conditions are usually covered. Group insurance claims are also easier to file than individual plans. Only a few simple documents need to be submitted for the claim to be reviewed and processed.
Cheaper insurance
When insurance is purchased independently, limitations may be encountered in securing equivalent cover at the rates offered by group insurance schemes. Group insurance tends to be more cost-effective because the risk is dispersed across a larger pool of healthy working individuals.
Enhanced health and wellbeing
Group insurance schemes go beyond financial protection; they support overall health and well-being. Group health insurance provides employees with faster access to healthcare services and specialist treatments. While group disability and trauma policies provide a lump sum payment if a policyholder is unable to work due to serious illness or disability, to help cover things like medical expenses and rehabilitation costs.
Some group schemes even offer wellness programmes and access to health-related resources, such as mental health support and fitness initiatives. These resources help contribute to happier, healthier employees. AIA Vitality, for example, is a science-backed programme that provides policyholders with guidance, tools, and rewards to enhance their health and wellbeing.
Crafting a well-designed group insurance scheme requires specialist expertise. Whether you’re considering group insurance for the first time, or looking at changing your employee benefits strategy, talk to the team at Moneybox. We’re experienced in workplace insurance management and can tailor cover to suit the needs of your organisation, employees and budget. It doesn’t matter if you have 5 employees or 5,000. Get in touch today.