Estonian Entrepreneurs Are Interested in Insuring Employees, SEB
OREANDA-NEWS. March 27, 2013. As the years progress, companies are becoming increasingly aware of the necessity for insuring the lives of their employees. In many cases, the lives of employees remain uncovered mainly due to unfavourable taxing conditions.
“Companies are now indeed more interested in insuring their employees than they were two or three years ago. Our insurance portfolio includes companies whose principle of insuring their employees is a part of their corporate policy. For companies that operate in high-risk areas of activity, concluding life insurance contracts for their employees means mitigating the risks for the company. There are also companies that see the concluding of life insurance contracts for their employees as responsible corporate behaviour, or that include life insurance in their corporate motivation packages,” said Indrek Holst, Chairman of the Management Board at SEB Elu- ja Pensionikindlustus.
Holst believes that the government and the private sector could go a long way by working together to mitigate the social risks for citizens. “People’s financial obligations are far surpassing their savings, which means that in the case of accidents families quite often end up in a very difficult economic situation. To help people get by in difficult times, recover from their ordeals and return to their regular working lives as quickly as possible, the state should provide incentives for covering risks. For instance, tax incentives for contracts concluded by individuals as well as employers. Since the risk premiums for coverage are small, such incentives would not constitute a huge load for the receipt of national tax revenue. People, in turn, would get better social insurance in terms of their financial obligations. The incentives provided for employers would be of much greater significance, since they send a clear signal to society that the state promotes the contributions of employers towards the security of their employees. At the moment, even when a company wishes to insure its employees, it has to pay a fringe benefit tax on it,” Holst added.
In SEB’s experience there are companies that insure all of their employees, at the same time there are also examples of companies that want insurance coverage for key employees only, like executive managers or specialists in areas that are in high demand. Employers have, for the most part, chosen a life insurance package from among the insurance products, which offers insurance coverage in the case of an employee’s death or that mitigates risks related to accidents. There is also some interest in critical illness insurance coverage.