Group insurance: rising premiums

After food, housing, energy and building materials, now group insurance premiums are starting to climb in turn.

The insurance industry is also suffering from labor shortages and increased costs, but inflation in the sector is believed to be largely attributable to the pandemic.

For policyholders, there is not much to do to mitigate this umpteenth price increase, except (again) to cut elsewhere.

Not all employees will feel it at the same time or with the same intensity. The impact of Covid-19 varies according to the field of activity of their employer and the bonuses are revised at the renewal of the contract with the organization.

Rise in claims

Multiple factors related to the pandemic explain the premium increases, observes group insurance broker François Desrochers, of Avanco Consulting Services. “Two years of confinement have had an impact on mental health and stress levels in general, and this has had an impact on claims. »

Insurers have paid more compensation in long-term disability insurance. Also called “salary insurance”, it replaces loss of income after 16 weeks of absence.

Longer on the floor

Load shedding in the health network did not help either. It caused processing delays that impacted the duration of disabilities and insurance claims.

“We also notice problems with the availability of health professionals. During the pandemic, there have been reports of a lack of psychologists, for example, which is delaying the return to work of furloughed employees. In addition, the consultations are more expensive,” notes Frédéric Venne, group insurance broker and partner at Normand Beaudry.

Telecommuting has also boosted demand for health services such as physiotherapy, occupational therapy and osteopathy. The cause ? Inadequate work equipment.

Impact on premiums

Insurance premiums are based on experience. The more claims there are, the higher the costs will be for the group when the contract is renewed. The premium rate would have increased from 20% to 40% for the “disability insurance” component of the new agreements, according to François Desrochers. The consequences on the rest of the hedge would be less significant, but inflation is showing up on almost all counts.

The mere fact of going through a period of uncertainty encourages insurers to revise their risk factors and increase premiums.

All in all, this can be a few tens of dollars less on an employee’s pay. There are no miracle solutions to mitigate the impact, employers would have to increase the share of premiums they pay or reduce coverage.

The more intensive use of new technologies, such as telemedicine services, is another avenue, but this approach has its limits.

Already in recent years, several changes have been made to group insurance plans to contain the growth in premiums, which has since been fueled by the explosion in the cost of drugs.

Today is another pill to swallow.

DECREASE IN CANCER TREATMENTS

One of the subjects of conversation in the field of group insurance concerns the reduction in absences linked to cancer treatments, points out Frédéric Venne.

Good news ? On the contrary, the broker is worried about it. He hypothesizes that the pandemic has curbed routine medical visits, so fewer cases have been detected recently.

“We could pay the price later for that,” thinks Frédéric Venne. The disease will be diagnosed at a more advanced stage, with the implications of heavier treatments.

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