WILLIS GROUP
employee populations around the globe. “I
Bill and I shared views on this topic at the 2012 World Captive Forum with Eric Butler, the global director of health insurance of Generali. Deutsche Post DHL and Generali are two pioneering companies working on effi cient techniques to control the costs of global medical benefi ts. And it is no surprise that, much as in other corporate risk management challenges, there is a role for captive insurance companies to play.
Forces driving increased medical cost Employers such as Deutsche Post DHL face rising costs of healthcare in every country of operation, even when the head count remains stable, for a variety of reasons.
1. An ageing global workforce Demographic studies indicate shifts in age distribution towards an ageing population due to reductions in fertility and mortality, a situation now being realised by employers, particularly in Europe, Japan, Australia and the US.
The Center for Disease Control reported last year: “The US population is growing older. The nation’s workforce is refl ecting these demographic changes. As a result, some employers are projecting labor shortages—thus necessitating the retention of current workers, resulting in an increasing number of older adults in the workforce, or they risk losing many experienced and knowledgeable workers to retirement or other pursuits. Some older workers have chronic diseases and resulting impairments that employers need to consider in developing their workplace health programmes. Persons aged 65 and older represent one of the highest US labor force participation rates in the developed world. By 2018, nearly 24 percent of the total US workforce will be age 55 or older, compared to 18 percent in 2008.”
2. Cost shifting from the public to the private sector Governments are under severe fi scal pressure and many are reducing the amounts they spend on healthcare, requiring employers to increase the amount of supplemental benefi ts to employees to maintain level benefi ts.
3. Advances in technology Although welcome as a boon for improving the quality of life, new procedures and medicines quickly become new costs for those paying for healthcare, as patients expect and demand the best that science can offer.
4. Increases in, and earlier onset of, chronic diseases Paradoxically, upward mobility means worsening diet. We are
CICA | Forty years of captive leadership 59
“It’s a big ole train coming down the tracks,” said Bill Fitzpatrick, vice president of corporate risk benefi ts at Deutsche Post DHL, referring to the ever-growing costs of providing medical benefi ts to mounting
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