Paul Martin and Colin Rooke join Ryan Warner, Benefits Specialist, to discuss the trends in insurance and the impact on employers and employees on a local, provincial and national level as the world reopens post Covid.
Listen to the full episode here, or read the full transcript below.
Welcome to Risky Business, Commercial Insurance with Butler Byers. This is Paul Martin, the host of the show and the business commentator here on CKLM. And joining us today, we have Colin Rooke, the Commercial Risk Reduction Specialist with Butler Byers, and Ryan Warner, who is the Benefits Specialist. And we’re going to really bring Ryan in to talk about where we are as he sees things. And he has a good national pulse, not just a local one. But he tracks things across the country.
And as we start to open up in various parts of the country, what are we seeing as trends? And what are you hearing from employers and employees? And really just what’s new in the post COVID world? And let me just start it, Ryan, with first, by saying welcome. But secondly … I kind of alluded to it. You got 10 provinces and three territories, each with their own reopening plan. So you’ve got this patchwork we call Canada with no national standard. Every jurisdiction is different. If you’re an employer and you’re in five different jurisdictions, you’ve got five sets of things to work with.
I mean, I sit in your chair and I wonder, how do I manage all of this stuff? What are you seeing? What are you hearing?
Well, first off, thanks for having me again, guys. Always appreciate the time on this show. I am seeing all kinds of different things, depending on the industry. It’s, frankly, a little bit all over the place right now, which has made my world very entertaining. Employers are trying to juggle, I think, still wrapping their head around what the opening up strategy is, depending on the province. There’s so many variances there that it’s just too different to give you a blanketed answer.
But I think the big thing in my mind is employees are the ones that are sitting here, mostly wondering what’s coming. And I think it might be a little bit too soon to give you specifics, but we can talk in a general sense, for sure.
Well, and I guess you maybe gave us the secret here, is that it’s probably incumbent on employers to be as transparent and forthcoming as they can, understanding that the rules change almost, it seems hourly. But just to keep the employees in the loop so that there’s less uncertainty, and provide as much of an idea of what’s going on as possible, because that just turns down the temperature.
Yeah. I think the fact people … they don’t like surprises anymore. I think we’re all sick of the magic whatever’s coming up the next day. But in the benefits space in particular, and the group retirement space, employers should definitely be talking with their employees as much as possible to give them a sense of what they’re facing. Because I think employees don’t grasp fully what the costs are, certainly, with benefit plans.
And that is evolving quickly, as insurers are stumbling along and having to deal with the COVID crisis on their end. So employers are seeing increased renewals, and that doesn’t always translate down to the employees. So they don’t necessarily understand what the employer is facing.
Yeah. Maybe just talk about that a little bit. We had the world moving along at a pace and everything was sort of normal. And then boom, along comes COVID, upsets the apple cart. People are just basically trying to hold on by their fingertips. Now we’ve got a little stability. Now we’re changing again. We’re going back into the post COVID world.
What did the insurance companies learn through this? How are they responding? Was there more burden on them, less burden on them? Are rates going up? What’s the upshot of COVID on the benefits industry? And then, ultimately, that translates down to premiums for employers and ultimately, employees too, I guess.
Well, I’m sure all your listeners are thinking poor insurance companies, they’re … been through the ringer here. But I mean, I feel like they did a really good job in the first six months of this pandemic to try to react as quickly as possible in trying to give the quote/unquote, COVID credits, back to business owners. So that the various services that weren’t being used, like dental and your massage therapy and physio and so on, the services that were shut down for a variety of reasons, insurers stepped in to try to give them some money back. So they weren’t paying for premiums that weren’t being used.
From there, things did evolve quickly and kind of bounced around depending on the province. Because I mean, there was various shutdowns across the country, and you had this bit of a hiccuping going on where insurers weren’t doing a whole lot at that time, because it was so hard to determine what claiming was going to happen or not. So now that things are, more or less, opened back up or services have figured out ways to continue to stay afloat, employees are definitely claiming.
So I’ll give you an example, like drugs. Drugs are going to keep going. If we need medications, we need them. So those plans are going to continue to see those expenses flow through. The paramedical providers, your massage, physio, chiro, et cetera, those have really ramped right back up. Dental’s ramped right back up, and so on. I think the scary part is the pooled side, so our life insurance and disability insurance, is those are the ones that we’ve seen major switches in activity.
And I think stress is at an all time high. COVID death claims have been flowing through. And for a variety of unfortunate reasons, other types of deaths have been coming through these plans. So the insurers are being burdened with increased claiming activity, which ultimately requires premiums to go up.
Colin, jump in if you see an opportunity here. But I’m just wondering about whether you provide support to employers to do that communicating to the employees. I mean, do you have information that they can glean themselves, that you’ve prepared and then they can pass it along?
I don’t know which of you want to take a run at that. But Colin, do you have that, or is that something more for Ryan?
Yeah, sorry. I was in the same thought process. Is Ryan going to answer, is Colin? And I did want to say, yeah, I am on this recording also. Just a little more quiet than the normal. But, yeah. So on the risk reduction side, we have all sorts of stats and literature and aides and documentation that we can help with that sort of internal communication. I think where Ryan would come in is, he helps us determine what needs to go out. Or the education side, what conversations to have, and when.
So it’s kind of a twofold approach. Ryan gives the background, sort of the meat on the bone. We help with the why and the delivery and how to approach it. And honestly too, how often and how to approach it.
Good, good. So an employer can reach out to you and they can count on you to provide them with at least some information that they can then get a conversation started with their employees. So that it’s not as Ryan alluded to earlier, just a bag of surprises coming day, after day, after day. Which as you rightly point out, isn’t necessarily fun for everybody. You provide some help.
We are armed … and just like Ryan. Frankly, Ryan would provide a lot of that. But the trends too, so we can, of course, proactively educate and say, plan usage is up in this area. Here’s why. Here’s what you can do about it. Here’s a conversation maybe to have. And I think you can’t say this enough, but there certainly is a lack of understanding of how employee benefits works. The costs, the true cost, how … the pricing model.
I mean, I say this all the time, and Ryan’s probably tired of it, but you hear people say, my massages are expiring. I need to use those up. And there’s still is that idea that it’s prepaid, like they’re yours, you’re entitled. And if you don’t use it, it’s gone. Whereas, there’s a true cost. So we do a lot of explanation and education around just the plan itself, but certainly, again, new and emerging trends as well.
Ryan, you would share that view?
Definitely. I think there’s lots of material we can bring to the table to help employers better understand what they’re facing and help them understand what they can do about it. And also then be there for them to educate and assist with that line of thought with their employees too, and make sure they understand what they have.
All right. Listen, we’ve got to take a little break. And then when we come back, I want to start to pursue a couple of other angles on this. One about, Colin alluded to, some areas, less claim, some areas, higher. I wonder if we could talk a little about that. But also, there are some really interesting trends that seem to be popping up here, and I want to ask you about those. So stick with us if you’re listening to this, we’ve got to take a little break. We’ll be back after these few messages. But you’re listening to Risky Business, Commercial Insurance with Butler Byers. Back after this.
Welcome back to Risky Business, Commercial Insurance with Butler Byers. Paul Martin, here, your host. And joining me is Colin Rooke, the Commercial Risk Reduction Specialist with Butler Byers. And Ryan Warner, who is an expert in the area of benefits plans.
And Ryan, just before the break, I sort of alluded to a question about, did we see through COVID some areas of the benefits plans getting more attention, like people were making more claims than others? And I think Colin said, you really probably saw dental claims go down because it was hard to get in to see a dentist. So that probably is quite logical. But were there others on the other side where there was more demand as a consequence of COVID?
Yeah, there definitely was. I mean, the dental aspect of things has been interesting, because although there was this three to four month lull in activity with dental offices being closed, everyone still had their need to get to the dentist. So what we found was that it was almost compounding and you were getting a balloon of activity in the fall and then into the new year. So it wasn’t as though folks skipped their dental appointment for the year altogether. They really did just wait. So that claiming just came in in flux all at once. In other areas of the plan, I mean, health stayed relatively consistent. Because as I said earlier, I mean, drug costs are drug costs and people need their medication. So that kind of kept going.
The disability side of things has been a concerning area, from my perspective, over the last number of years. Pre-pandemic, even. We saw, or consistently seen trends of mental health related claims flow in. And this is right across the country, right across the board with all insurers. The pandemic heightened that concern. But the pandemic is causing, I mean, copious amounts of stress and personal wellness issues, mental health issues. And as a result, it is triggering these disability claims and leaves of absence for a variety of reasons.
So I’d like to say it’s a little too early to tell if things will start curving in the right direction again, now as we get back into a quote/unquote, normal. But the mental health impact on disability pools has been at an all time high.
Colin, I know you’ve got a question about retirement, so maybe just jump in here and you can put this to Ryan.
Yeah. Just, in the same vein of things moving in different directions, and really, overall plan usage, are you seeing much of a trend of … are groups getting younger? And I’m just thinking, maybe you’re a few years away from retirement going into the pandemic, or even a few years maybe` past the ideal retirement age. Have you noticed plans getting younger where people are just saying, I’ve been at home for the last 18 months. I was thinking about retirement anyway. I’m just going to call it a career.
I think about … I think certainly, the older demographic is going to push the average age up, of course. So are plans getting younger? Are employees seeing any kind of decrease or discount? Am I totally wrong, is there no trend there?
No, actually, I think … interesting conversation piece. It’s quite the opposite though. I mean, we’re seeing the retirement age increase and more and more folks feeling either they have to because they haven’t planned appropriately or maybe don’t have enough money. Or maybe they’re just in a position where their health is in great shape and they are quite willing to stick around. And we’re seeing plans tweaking and adjusting their termination ages to try to accommodate some of their older staff.
Naturally, that’s having a different impact because it’s pulling the demographics and the average ages up across the board as well. So you’re seeing adjustments that are required in the premium levels to accommodate some of these older folks that generally do claim more. So I’d say the trend is in that direction. I think I saw a stat the other day where, I think it’s about 60% of the workforce is made up of millennials now. So as the baby boomers are exiting and will exit, the dynamics of what employers are trying to do with their plans is changing. But in terms of the average age, it’s actually going up.
That raises some really interesting questions about … there’s some pretty interesting stories popping up now about people who said, after this 16 or 18 months of working from home or being somewhat disconnected from the office, I’m rethinking my career completely. And there are a lot of people checking out. There are people that are saying, I need something new.
I’m just wondering what you guys are seeing from … because as a benefits provider, you’re seeing what’s happening to payrolls. Whether this is just talk or if it’s real. And if you’re seeing anything about people rethinking careers, checking out. Maybe saying, you know what, this whole notion of the gig economy has some appeal. So I don’t want to go back as a full-timer. I want to go back as a contractor. I mean, are you seeing anything, Ryan?
Yeah. I’m fascinated to see, mostly a migration of employees saying, I want to get out of Dodge. I’m moving to a smaller town. I’m moving to the east coast, I’m moving to the west coast. I’m moving. And the reality is, I think a lot of people think conceptually that now that they’re working from home, this won’t be an issue. I can continue to work from home. But what they maybe don’t realize is the pay grades are different depending on where you’re headed.
And employers are wising up a little bit and realizing that, if I’m paying somebody $60,000 a year here, that might equate to $40,000 a year in equal pay somewhere else. So if you’re moving from a higher pay location to a lower paid area, it doesn’t necessarily come with a maintained salary level. So I think that’s been a bit of a concern for people. And benefits are following suit.
Yeah. Well, the flip side, of course, is we’re seeing communities like Weyburn, for example, that’s advertising itself as, move from Toronto or Vancouver to here. Pocket the difference and sell your house there, and you can buy the same house here for a third of the price. So, I mean, I get that the salary changes, but so does the cost of living, I guess, is a point there.
These are fascinating kinds of changes. I mean, how is the benefits industry going to respond to this notion of the rise of the gig economy? I mean, the number of people that pull some time with SkipTheDishes or Uber or whatever, how do you put a benefits plan together for them, for example? I mean, they’re not on somebody’s payroll. I don’t know, is this going to cause some interesting challenges for the industry going forward?
It may. I could see a scenario … and I’d be shocked if the insurers are not already looking at this and how to underwrite it. I mean, traditionally, an independent contractor or somebody that’s not considered an eligible employee on the benefit plan would have a really challenging time getting benefits on their own. Naturally, just because the ones that are generally seeking that coverage are likely the ones that have a lot of claims to pump through, which means the premiums are going to be higher.
So I don’t know that there’s any existing solution that is a one size fits all. But I definitely am seeing more trend to employers trying to offer digital type benefits, value add benefits, trying to get outside the mainstream, just your health and dental. Looking at things like employee assistance programs to try to focus on the mental health elements that are used there, and a variety of other services that that can be helpful. Like there’s digital pharmacies now where you don’t have to leave your home to be able to get your medications delivered to your front door. So a lot of different things that employers are now looking at to enhance their offering and make it more geographically flexible.
Ryan, as always, you provide some really cool insights and you’re on top of these trends. So thank you for this. And Colin, I want to thank you for bringing Ryan in today. I think it’s very timely. And for most employers that will be listening to this, they’ll be thankful to hear it, because they’re likely looking for information just like everybody else is. So again, you two, thanks very much for joining us.
You’ve been listening to Risky Business, Commercial Insurance with Butler Byers. Paul Martin here. Thanks for joining us. And we’ll talk to you next time.