Will the Cost of Living Crisis Change the Dynamic of the Employer Benefits Market?

Molly Doran, Rosie Cairns, Anna McDaid

With the recent surge in the cost of living, people are being forced to consider ways in which they can reduce their personal outgoings. Despite the COVID-19 pandemic demonstrating how critical it is to protect against financial loss, we anticipate that many are going to re-consider and deprioritise current individual spend on personal protection and private healthcare products. In this environment, and against the backdrop of the ongoing war for talent, a key differentiator for employers is going to be the benefits they choose to provide to employees.

For providers defining their suite of protection products the ways in which they can create flexible protection propositions that can be targeted through workplace employee benefits should be considered a priority. Whilst traditionally protection delivered through the workplace has primarily focused around simple, cost effective and often generic products such as life, income protection and private healthcare, there is huge scope to diversify into other areas. Currently, when individuals want more robust cover (usually after a significant life-event such as buying a house) there is a tendency to individually purchase protection products outside of the employee benefit package; either directly from a provider or through an IFA. We anticipate a shift away from this model as employers look to differentiate by offering employees propositions that are customer centric and that can flex and evolve with changes to consumer lifestyles.

Indeed, as consumer expectations within the protection space have changed, increasingly there is a need to design hyper-personalized offerings that view customer needs in a holistic way. Group protection therefore, should look to consider their employee journey and what employees might experience throughout a lifetime of work in order to drive an offering that is holistic and differentiated from other potential employers.

These changing and evolving individual needs create an opportunity for providers to capitalize on under-served areas specifically within their workplace offering.

There are three key areas where providers can look to support those employers who are prioritising comprehensive protection as part of their employee benefits

Product and Propositions

Taking into consideration that many individuals are now having dependents later, working for longer and purchasing properties later in life, the need for protection is leaning into older demographics and there is an opportunity to drive propositions that include critical illness, income and mortgage protections, funeral planning and care options (as well as traditional life protection) to employees at all stages of their career. For propositions, the starting point is a broad offering that caters to all stages in the employee lifecycle.

For providers, creating a menu-based, modularised and flexible proposition for the workplace that is dynamic and can evolve with changing needs will be critical to success. However, perhaps most importantly, and in light of the Consumer Duty regulation, the focus will shift to how providers are able to balance a broad workplace proposition with appropriate consumer guidance.  Providers need to be able to educate and guide current and potential clients towards the right products for them and their current circumstances. They can do so by identifying and utilizing insights from data and analytics and using rule-based visual tools that provide actionable insights dependent on a consumer’s demographic.

Customer Centricity

Providers should look to offer digitally enabled engagement tools that facilitate a smooth customer experience and offer a policy administration back-end that can  manage high levels of integration to enhance the experience. Flexible product suites and visual analytics tools that allow customers to maintain oversight of their benefits will support consumers to easily scale up or down their protection options. These options could include the ability to change core features around benefit options or the sum assured and  product feature options such as premium holidays or partial payments to support customer centricity.


Providers could also look to expand their eco-system of partners. They should consider the ways in which they could wrap up protection, healthcare and pension options for employers to offer compelling packages in addition to looking at partnering with specialty insurers to accommodate a wider spectrum of needs. Further, as employers are increasingly thinking of health and wellbeing in a holistic and pro-active way, partnerships that offer benefits such as virtual doctors or education on general well-being will further help to drive a powerful offering


For employers, there is no doubt that delivering flexible protection products as a core employee benefit in a time when people are struggling to maintain their current lifestyle will be a key differentiator in attracting talent. For providers, there is a huge opportunity to build trusted relationships, both with employers and like-minded partners, that are centred around providing support to customers at a time when it truly matters.

To find out more about Alpha’s protection proposition please contact Keith Aylwin, Molly Doran, Rosie Cairns or Anna McDaid here

About the Authors

Molly Doran
Senior Manager

Molly Doran is a Senior Manager in Alpha's Pensions & Retail Investments Practice with a focus on business led technology change within Financial Services and has worked across a number of Platform implementations and large scale delivery programmes within the Life & Pensions space.

Rosie Cairns

Rosie Cairns is a Manager in Alpha's Pensions & Retail Investments Practice with a focus on data and technology. Rosie has worked across strategy and large scale platform delivery, supporting clients to understand their business needs and seeing that through to implementation.

Anna McDaid

Anna McDaid is a Consultant in Alpha's Retail Distribution & Advice Practice. Anna has over five years experience in the financial services industry, having trained as a Chartered Financial Planner, giving holistic financial advice to clients including addressing clients protection needs, before moving into consulting. Anna's background gives her a unique position to help clients and, as a result, Anna has built up strong expertise across the value chain. Recently, Anna has supported clients in projects across distribution strategy, operating model design and platform implementation strategy.