Private medical insurers should look at ‘pooling' their SME flex risk, according to Jelf Employee Benefits.
The benefit consultancy has said SMEs and their employees could enjoy a wider variety of benefits with competitive pricing, if private medical insurers pooled their benefit risks.
The company believes that a ‘Flex Small Scheme Arrangement' could be championed within the industry which would enable flex schemes to become the norm rather than the exception.
Jelf said it believes insurers take a less accommodating approach to designing PMI for smaller flex schemes because of concerns over variable membership and claims volatility, hence the call for pooling the risks.
Julia Turney, head of benefits management at Jelf Employee Benefits said: "We're finding that smaller employers are becoming more sophisticated with regards to managing their employee benefits and are looking at ways to make their budgets go further.
"This often leads to conversations about flexible benefits and how these can be better aligned to corporate objectives.
"Small businesses want to offer flex schemes and corporate advisers can see a real business case - we just need providers to devise a product structure to help us."
He added that although currently it can be difficult for advisers to provide flexible benefit strategies for smaller clients, if a handful of insurers were to provide PMI schemes for small numbers of employees designed specifically for flex, they would quickly see a first-mover advantage.
Julia Turney concluded: "SMEs make up an extraordinarily large proportion of the UK's workforce and the insurers who see small businesses as a potential rather than a threat, could open up a whole new channel of revenue."
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