Aon Global Benefits Study - Risk - Retirement - Health | … Global Benefits Study 2015 Key Conclusions 20 1. The market trend of increasing centralization is ahead of the operational

Risk. Reinsurance. Human Resources.

Aon Global Benefits Study

Insights Presentation

April 2015

Aon Global Benefits Survey | April 2015

Proprietary & Confidential

1. Introduction to the survey

2. Where we are now

3. Priorities / challenges for 2015/16

4. Decision making metrics

5. Benefits management efficiency metrics

6. Conclusions

1

Aon Global Benefits Survey 2015

Agenda




2. Where we are now




6. Conclusions

2


Agenda



1. Introduction to the Survey

Participant Profile: Industry and Location

71 participants based in the UK – 10 of whom are attending today

Participants by industry (n=184)

Finance

21%

Retail

12%

Other

12%

Pharma

11%

Participants by country (n=184)

UK

42%

NL

13%

CH

8%

3



Similar ratios for the UK participants

1. Introduction to the Survey

Participant Profile: Role and Remit

0%

10%

20%

30%

40%

50%

60%

Global Regional Cluster

Participants by role (n=184)

0% 10% 20% 30% 40%

2-5

6-10

11-20

21-30

31+

Number of countries in role remit (n=184)

4




2. Where we are now




6. Conclusions

5


Agenda



2. Where We Are Now

Benefits Strategy

63% 60%

41%

0%

20%

40%

60%

80%

100%

Regularbenefits

benchmarking

Documentedglobal benefits

strategy

Documentedhealth andwellbeingstrategy

How many participants utilize…?

37%

20%27%

0%

20%

40%

60%

80%

100%

Have a globalbenefits

inventory

Ask benefitsquestions in

employeesurveys

Carry outregular

benchmarking

How many participants with a global benefits

strategy don’t…..

6

Questions over the effectiveness of the global

benefits strategy if further activities not pursued



A clear market trend towards

organizations investigating

captive and other financing options

2. Where We Are Now

Benefits Financing

49%

16%

0%

20%

40%

60%

80%

100%

Multinational pooling Captive funding forinsured benefits

How many companies have a

multinational pooling or captive

financing arrangement?

34%

8%

0% 10% 20% 30% 40%

Already have a pool

Don't have a pool

Is reviewing or implementing a pooling

strategy a priority for you?

7

Very few companies looking to implement new

pools – standard pooling has had its day?



2. Where We Are Now

Benefits Governance

5%

56%

0%

20%

40%

60%

80%

100%

Don't have a globalconsultant but it is a

priority

Don't have a globalbenefits database but

reviewing benefitsis a priority

How many participants…?How many participants utilize…?

48% 47%

0%

20%

40%

60%

80%

100%

A global benefitsconsulting

relationship

A global inventory ofbenefits data

Surprising low number

of participants looking to

establish global benefits

partnerships

8

Very high number of clients

looking to review benefits

without a robust database

as a starting point



2. Where We Are Now

Employee Perception of Benefits

How many participants …

76%

43%

0%

20%

40%

60%

80%

100%

Ask employeebenefits questions inengagement studies

Have an onlinebenefits or TotalReward portal

How many participants see the

following as priorities

21%

27%

29%

0% 10% 20% 30% 40%

Launching Total Rewardsor benefits portals

Implementing flex plansaround the world

Review benefitscommunication material

Benefits often asked about in surveys but employees dissatisfied with follow-up.

Poor employee communication often reduces perceived value of benefits

9




2. Where we are now

3. Priorities/challenges

for 2015/16



6. Conclusions

10


Agenda



3. Priorities/Challenges for 2015/16

Priorities

All

respondentsGlobal Regional

Reviewing benefits in key countries 1 1 1

Setting a global benefits strategy 2 2 3

Reviewing or implementing a pooling strategy 3 8 2

Implementing a health and wellbeing strategy 4 3 5

Reviewing employee communication materials 5 4 6

Implementing flexible benefits in 1 or more

countries6 7 4

Launching a total rewards portal 7 5 8

Implementing a global benefits mandate 8 6 7

Management of pools typically

the responsibility of regional

rather than global teams

11

The key priorities for

multinationals are strategic in

nature

Recent trends towards global

flex and total reward potentially

waning



3. Priorities/Challenges for 2015/16

Challenges

All

respondentsGlobal Regional

Time consuming benefits administration 1 2 1

Lack of information on benefit programs 2 1 2

Dealing with rising healthcare costs 3 3 7

Lack of budget for priority projects 4 4 3

Benefit program compliance issues 5 5 5

Employee dissatisfaction with benefits 6 6 4

Poor third party service levels 7 7 6

European state health systems

reducing the impact of rising

health costs

12

Benefits administration an

increasing drag on global

benefits professionals

Understanding existing

programs a key step before

focusing on priority projects




2. Where we are now




6. Conclusions

13


Agenda



4. Decision Making Metrics

Where Are Decisions Being Made?

What is the balance of decision making between global and local stakeholders?

14

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Setting benchmark companies

Changing benefits

Introducing new benefits

Confirming renewal terms

Choosing benefit providers

Benefits communications

Benefits administration

Totally local Mainly local Joint decision Mainly global Totally global

Benefits administration

and communication

managed locally

Benchmark groups

set globally



4. Decision Making Metrics

Where Are Decisions Being Made?

Distribution of the overall decision making balance

15

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Totallylocal

Mainlylocal

Jointdecision

Mainlyglobal

Totallyglobal

Key statistic Numeric Interpretation

Median 2.43 Mainly local

Average 2.62 Local / joint

Upper quartile 3.29 Joint

Lower quartile 1.86 Mainly local

Despite clear centralization trends at

multinationals the majority of benefit

decisions still being driven by local

stakeholders




2. Where we are now



5. Benefits management

efficiency metrics

6. Conclusions

16


Agenda



5. Benefits Management Efficiency Metrics

How Effectively Are Benefits Being Managed?

How effective are the following key areas of benefit plan operations?

17

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Benefits meeting employee needs

Accurate employee perception

Alignment with benefit strategy

Benefits communication material

Decision making process

The financing of benefits

Remarketing process

Totally ineffective Somewhat ineffective Fit for purpose Pretty effective Very effective

Benefits not

perceived well or

meeting employee

needs

Very few extreme responses – no major issues but many improvement areas



5. Benefits Management Efficiency Metrics

How effectively are plans being managed?

Distribution of the overall effectiveness of benefit operations

18

0%

10%

20%

30%

40%

50%

60%

70%

Totallyineffective

Somewhatineffective

Fit forpurpose

Prettyeffective

Very effective

Key statistic Numeric Interpretation

Median 3.00 Fit for purpose

Average 3.07 Fit for purpose

Upper quartile 3.43 Fit for purpose

Lower quartile 2.71 Fit for purpose

The results show a clear lack of excellence

in the management of plans.

Most organizations adopting a “just enough

is good enough” attitude




2. Where we are now




6. Conclusions

19


Agenda



6. Aon Global Benefits Study 2015

Key Conclusions

20

1. The market trend of increasing centralization is

ahead of the operational reality. The decision

making at most multinationals has heavy

involvement from local stakeholders

2. There are clear opportnities in all areas of

benefit plan management to improve

efficiencies and drive savings

3. Benefit administration issues are a resource

drain and this is likely to get worse as the trend

of centralization continues

4. Most organizations still reporting a lack of

centrally held benefits information which is a

real barrier to driving strategic priorities

5. The popularity of multinational pooling looks

to have peaked with organizations looking to

Captives and other financing initiatives to

improve efficiencies

Risk. Reinsurance. Human Resources.

Aon Global Benefits Study

Insights Presentation

April 2015

Documents

Aon Global Benefits Study - Risk - Retirement - Health | … Global Benefits Study 2015 Key Conclusions 20 1. The market trend of increasing centralization is ahead of the operational