What is the state of the Life & Health markets today?
Life Insurance has seen steadily increasing rates for the past year. Underwriting is tightening so it is harder to get moved to a better table rating, and some conditions that were previously easier to get underwritten are now difficult to impossible. With inflation and the current Fed Reserve stance expecting to see increases in rates that are already trickling into the 10-year treasury rates. We should see some easing of rate increases in life insurance as those rates filter into the insurers investment portfolios.
Health insurance continues its upward trend. 2020s low renewals from deferred procedures caught up to most groups in 2021. Federal mandates such as paid for take home tests will have a cumulative and unknown impact to rates as renewals roll through 2022. Medical inflation, the cost of procedures, are continuing to rise, and wage inflation pressures will continue that upward trend for the foreseeable future. Medical providers must pass the rising cost of technology, information security and wages along – and that will continue to impact even the best performing groups. Wellness programs are proving to be only modestly effective and have longer return on investment. Best strategies will be those employers that focus on educating their employee base on being smart consumers – price checking procedures and medications – to become advocates for lower plan paid costs. Those groups that create a culture of thriftiness will be the ones that will get the best short-term results and renewal pricing.
What pains are you hearing from prospective clients?
The biggest pain is keeping qualified people, retaining, and attracting good employees. Employers are now facing wage inflation and trying to use benefits as the something extra to get employees to accept positions. Some employers that are not offering at least market benefits – or have employees pay a larger portion of benefits costs than those, they are competing for employees with are having issues hiring anyone.
At the same time, the quality of the pool of labor is declining. Employers are having issues finding those that can pass drug screening, and ultimately with those that are committed to showing up and performing for their paychecks. Especially in the lower end of the unskilled labor pool. Wage inflation to remain competitive is putting pressure on costs, which in turn is impacting profitability. Therefore will have to be passed along to their customers in the form of price increases.
How has SeibertKeck Insurance Partners been able to help?
SeibertKeck Insurance Partners has been quick to get to markets, develop marketing plans to get pricing as low as the market will bear for groups. Groups getting 20% plus increases are frequently crying to help. We have been successful in helping some of these groups gets their numbers to something more manageable. Consulting with clients on how their benefits align compared to those they are competing with in their labor pool has helped as we look at benefit changes to help attract employees and minimize the impact of cost increases. Our use of technology can improve employee communication and education programs to promote benefits consumerism such as using cost comparative apps.
Adding benefit, such as disability, critical illness, employer paid group life insurance – can help make an employer more competitive with a relatively low cost versus benefit in the recruiting phase.
Written by: Karl Henley