With the economy showing little sign of an upturn and spare money thin on the ground, cost-effective cash plans are the most sought-after employee benefit. Nicola Culley examines this rapidly growing market and ponders its longevity
The other thing Health Shield said it was monitoring across the board was fraud. Rendell said it did happen with cash plans, but could potentially be easier to commit in the product area. She added it needed to be acknowledged and moves made towards ensuring all claims were genuine.
She said of any further innovation: “Advisers are always on the lookout for innovation. But there is definitely the balance between keeping the cash plans simple and making sure the intermediary’s job is not complicated unnecessarily.
“We have just launched the SME product and so we will not be making any further changes in the near future.”
Simplyhealth also launched a revised cash plan at the turn of the year. The product offers a primary care module, free child cover, discounted gym membership, online health risk assessments and a dental accident benefit.
Howard Hughes, head of employer marketing at Simplyhealth, said the one thing that could not be overstated at the minute was how relevant cash plans were in a bad market.
He said: “Corporate cash plans are going up year-on-year. We certainly have seen significant growth and all providers will be the same since 2009 when the market fell and companies started struggling.
“As for directly bought cash plans the internet is a route to market that is growing, but with cash plans you still have an issue with explaining what they are. I think when it comes to direct routes there is more work to be done there to be successful in getting the message across about cash plans.”
Workplace distribution
Hughes added that distribution through the workplace was by far the best and most effective way for cash plans. And when the market finally lifts, Hughes did not see a drop in sales as the current obsession with price became diluted.
“When the market lifts there will be room to grow the value of cash plans in organisations,” Hughes said.
“PMI is still largely for senior management and not for the shop floor and filling that gap is the future for cash plans. And I think the company cash plan market is here to stay regardless of what happens to the economy.
“The products do have different benefits and when innovating it is important not to lose that simplicity and transparency that makes them attractive. They are not complicated or hard to join and understand and that is the whole appeal.”
The other talking point for cash plans for some time now, has been how they can support PMI excess policies.
Hughes said it was important providers looked at the risk for cash plans and PMI products if sold from the same source.
