By Ranamita Chakraborty
As the COVID-19 pandemic reshapes the work world, insurers seem to be taking a measured approach towards changing employee compensation and benefits according to interviews and a survey conducted by Willis Towers Watson (WTW) recently.
To find out how insurers have been managing issues such as hiring and employee pay in this current crisis, WTW interviewed several of its US-based insurance clients and received 69 survey responses from major insurers.
The firm found that insurers are largely taking a ‘wait and see’ approach to how they manage compensation and benefits as the pandemic and related market stress situation unfolds.
However, those in the insurance industry expecting a moderate to large negative impact over the next six to 12 months rose to 55% and 44% respectively in late March from 47% and 32% in mid-March.
While insurers have not yet laid off employees, a number of them are planning layoffs (4%) or are considering action (15%). This is significantly less than the general industry where 7% have already taken action and another 37% are planning or considering layoffs.
When it comes to pay, insurers are not yet reporting significant pay actions relative to other industries. Only 10% of insurers have, plan or are considering implementing a salary freeze – compared to 30% for the general industry.
At the same time, most insurance companies surveyed are not planning or considering alternative work arrangements at a reduced pay such as a shortened work week or extra paid time off for 2021.
These insurers are also not planning or considering voluntary or involuntary leaves of absence unlike the general industry. However, if revenue or cash flow becomes more of an issue later on, it is likely that insurers might make similar decisions.
Insurance companies are already beginning to take or consider actions in critical pay and rewards programmes as they assess the impact on their employees who have experienced significant professional and social disruption and stress.
WTW therefore expects to see more action in the insurance industry as the COVID-19 crisis evolves, particularly as the scale and scope of the impact becomes clearer.
Asia Insurance Review