Client Background

A fast-growing financial services company based in Shanghai, China partnered with Lockton to strengthen its employee benefits strategy while improving cost efficiency. As the firm continued to expand its workforce, employee benefits played a critical role in supporting business growth and maintaining competitiveness in a tight talent market.

Rising Premiums Undermine Coverage Sustainability

The client offered high-end commercial health insurance to all employees and their dependents, but rising premiums placed a significant financial strain on the benefits budget. Backed by our benefits benchmark insights and extensive market access, we negotiated with prospective insurers and secured a highly competitive renewal package for the client.

In the Chinese Mainland, providing qualified commercial medical insurance to employees brings additional incentives beyond healthcare protection. Although the premiums employers pay are considered taxable income for employees, employers generally choose to cover the resulting tax to attract and retain talent.

As the workforce expanded steadily to support business growth, the continuation of commercial insurance premium coverage became a key strategic question for the client—one with implications for both financial sustainability and workforce engagement.

Leveraging Benefits Benchmarking and Claims Analysis in Renewal Negotiation

To help the client make informed decisions, Lockton conducted comprehensive benefits benchmarking across the financial services sector. Our findings revealed that more than half of corporations comparable in size and profile to our client chose to cover commercial insurance, reinforcing its importance for talent attraction and retention.

While our recommendation was to maintain the current coverage structure, we presented an alternative approach if the client wished to further manage the premium expenditure: keeping employee enrollment mandatory, while allowing their dependents to enroll voluntarily. However, this would require a thorough overhaul of the plan.

Hefty increases in renewal quotes remained the primary challenge. We took the initiative to analyze the client’s claims data from the past three years. Leveraging our claims analysis and market insights, we successfully secured lower renewal premiums and tiered pricing with mild benefit upgrades.

Enhanced Coverage with 4% Savings on Benefits Costs

Not only did our team prevent premium spikes, but we also landed an enhanced package with a 4% savings on benefits costs. The client was satisfied with our solutions, which alleviated financial pressure, enhanced the value of employee benefits, and helped retain its edge in the job market.

Our comprehensive benefits and claims audit services delivered the best outcome for the client and employees. The firm entered into a three-year engagement agreement with our team in China. This long-term partnership underscores Lockton’s role as a trusted advisor, supporting healthier growth in both workforce strategy and benefits program sustainability.