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12 July 2022Issue 069,
June 2022

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15 May 2022Issue 068,
May 2022

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15 April 2022Issue 067,
April 2022

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15 October 2021Issue 062,
October 2021

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15 July 2021Issue 060,
July 2021

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16 May 2021Cancer: How One Type of RNA Could Be the Future of Treatment

Cells are the basic building blocks of all living things. So, in order to treat or cure almost any disease or condition – including cancer – you first need to have a fundamental understanding of cell biology. While researchers have a pretty good understanding of what each component of a cell does, there are still things we don’t know about them – including the role that some RNAs molecules play in a cell. Finding the answer to this may be key in developing further cancer treatments, which is what our research has sought to uncover. Three types of molecules carry information in a cell, and each of these molecules performs its own important function. The first is DNA, which contains hard-wired genetic information (like a book of instructions). The second, RNA, is a temporary copy of one particular instruction that is derived from DNA. Last are the proteins produced thanks to the information provided by the RNA. These proteins are the “workhorses” of the cells, which perform specific functions, such as helping cells move, reproduce, and generate energy. In line with this model, RNA has long been seen as nothing more than an intermediary between DNA and proteins. But researchers are starting to discover that RNA is much more than an intermediary. In fact, this overlooked molecule may hold the secret to cancer progression. Our research group recently discovered a new type of RNA that drives cancer progression without producing any protein. We think that this type of discovery may pave the way for an entirely new way of targeting cancer cells. But to understand how this is possible, it’s first important to know the different types of RNA we have in our body. The mystery of RNA Only about 1% of DNA is copied into RNAs that make proteins. Other RNAs help the production of proteins. The rest (known as non-coding RNAs) were long assumed to serve no function in the human body. But recent studies are challenging these assumptions, showing these “useless” RNAs actually perform a very specific purpose. In fact, these “non-coding” RNAs regulate the functions of many genes, thereby controlling key aspects of the cells’ lives (such as their ability to move around). The most abundant type of non-coding RNAs are long non-coding RNAs (lncRNAs). These are long molecules which interact with many different molecules in the cell. And, as researchers have now discovered, these complex structures allow many different functions to take place between cells. For example, some lncRNAs “grab” different proteins and gather them to work in a specific cellular space – such as the same gene segment. This function is essential for controlling the inactivation of some genes during development. But unlike other proteins in the body, we can’t identify the function of a lncRNA molecule simply by looking at its DNA sequence. Not knowing its normal function also means that we cannot study the role of this molecule in causing diseases, including cancer. LncRNAs and cancer Our research group – and others – are beginning to understand the many important functions of lncRNAs in cancer progression. For example, we know that some lncRNAs make it easier for cancer cells to multiply, interact with nearby cells, and escape the body’s immune system. Unlike proteins, which are present in different cell types, each lncRNA is present in one specific cell type and can be detected in body fluids, such as blood. These characteristics make them very attractive diagnostic and therapeutic tools. In our latest work, we have identified a lncRNA that is present in the most aggressive form of prostate cancer. To discover this specific lncRNA, we analysed RNA profiles from hundreds of prostate cancer patients. We found that this lncRNA was frequently associated only with the most aggressive forms. We also found that this lncRNA has two separate functions: one in the nucleus (the “core” of the cells, containing the DNA) and one in the cytoplasm (the external part of a cell, containing different organelles (such as mitochondria). In the nucleus of the cell, the lncRNA binds to a protein and directs it to a specific stretch of DNA, where it can activate a gene. This mechanism enhances the abilty of prostate cancer cells to spread to other tissues. In the cytoplasm, the lncRNA binds to another RNA and helps cancer cells multiply. Since this lncRNA was linked to cancer progression, we decided to design a new type of drugs that could target it. We did this by using molecules called “antisense oligonucleotides”, which are currently being tested in clinical trials. These are small stretches of synthetic DNA that bind the target RNA and trigger its breakdown. By using these molecules, we found that by targeting the lncRNA, we were able to stop both the growth and spread of the cancer. We hope to use these molecules in the future to treat other cancers that express a specific lncRNA. LncRNAs, which were virtually unknown some decades ago, assuming more prominence as a vital tool to understand cancer biology. Intriguingly, some lncRNAs are expressed only in some tissues (such as the brain) and might be responsible for traits that are specific to humans, for example, the increased development of certain brain areas. For this reason, lncRNAs are also an active area of investigation in neurodegenerative disorders, such as dementia. We hope that research on this previously obscure biological phenomenon will soon translate into better treatments for incurable …

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16 May 2021Do You Really Need to Drink 8 Glasses of Water a Day? An Exercise Scientist Explains Why Your Kidneys Say ‘no’

The warmer weather and longer days have inspired reminders to “stay hydrated” and drink eight glasses of water – or about two liters – a day. Not to burst anyone’s water bottle, but healthy people can actually die from drinking too much water. I am an exercise physiologist, and my research focuses on overhydration and how drinking too much water affects the body. Since water – and sodium – balance is essential to life, it is extremely rare for people to die from drinking too much – or too little – fluid. In most cases, your body’s finely tuned molecular processes are unconsciously taking care of you. Water out, water in As spring unfolds, hydration challenges take root across schools, sports and workplaces. These heavily marketed hydration challenges serve to cultivate both camaraderie and friendly competition to ensure that we drink compulsory amounts of water throughout the day. Hydration and “Gallon Challenges” support the widely held belief that water consumption beyond physiological need – or thirst – is healthy. But this is not so. Individual body water needs – intake – are primarily based upon how much water people lose. How much water each person needs to drink mainly depends on three factors: Body weight. Bigger people need more water. Environmental temperature. When it’s hotter, people sweat and lose water. Physical activity levels. Increased exercise intensity increases sweat water losses. Therefore, a “one size fits all” fluid replacement strategy, such as drinking eight glasses of eight ounces of water per day, is inappropriate for everyone. It remains unclear where the “8 x 8” water intake recommendation comes from. Perhaps, this two-liter intake threshold is derived from a misinterpretation of original recommendations offered by the U.S. Food and Nutrition Board in 1945 as well as the 2017 European Food Safety Authority, which states the daily recommended amount of water includes all beverages plus the moisture contained in foods. This means that the moisture contained in foods, especially fresh fruits, sodas, juices, soups, milk, coffee and, yes, even beer, contributes to this daily recommended water requirement. These guidelines go on to suggest that most of the recommended water content can be accomplished without drinking additional cups of plain water. And, it is important to note that while alcohol has diuretic properties – ethanol acts directly on the kidneys to make us pee more – caffeinated beverages, like tea and coffee, do not increase urinary water losses above the amount of water contained in these beverages. King kidney Now, you may be wondering why this is so. After all, you’ve heard from a lot of people that you need to drink more, more, more. Because total body water balance, or what we exercise scientists call homeostasis, is complicated, mammals survive by making real-time adjustments at the kidney. That’s why when it comes to hydration, our kidneys are king. Within each kidney – we need only one (i.e., we are born with a spare, just in case) – is an undercover network of aquaporin-2 (AQP-2) water channels that respond to a hormone called arginine vasopressin. This is the body’s main anti-diuretic (water retention) hormone. It is secreted by the posterior pituitary gland in response to nerve signals sent from specialized brain sensors which detect subtle changes in water balance. These specialized sensors are called circumventricular organs. The kidneys will make molecular adjustments to both underhydration and overhydration within 40 seconds in response to any upset in the water balance. These adjustments result from the mobilization armies of AQP-2 water channels, numbering about 12 million per collecting duct cell. This is why when we drink more water than our body needs – above thirst – we immediately have to pee out any excess water. Or when we forget our water bottle during practice, we stop peeing to conserve body water. This quick coordinated action between the brain, cranial nerves and kidneys is far more efficient and precise than any phone app, gadget or personalized recommendation available. Is there anything good to come out of this? Data suggests that drinking about two liters of water per day reduces kidney stone formation in people with a history of kidney stones and decreases the number of bladder infections in people with a history of bladder infections. Improvement in skin complexion, kidney function and constipation, with increased water consumption, are not clearly supported by science. Drinking extra water alone does not help kids lose weight unless water intake replaces the ingestion of higher-caloric beverages, such as soda, or makes people feel “full” before meals. Drinking water can affect some people’s mental state. Some studies report better cognitive performance after increasing water intake; while females with anxiety report compulsive water intake makes them feel better, likely from activation of reward circuits that increase dopamine. Many schizophrenic patients are compulsive water drinkers, stating that “voices” tell them to drink and that drinking water suppresses these voices. Of note, brain imaging studies confirm that superfluous drinking is unpleasant and requires greater muscular effort than drinking when thirsty. Our brain tries to discourage chronic overdrinking, or polydipsia, because “social polydipsia” causes chronic peeing (polyuria), which can lead to internal plumbing modifications such as bladder distention, ureter dilation, hydronephrosis and renal failure. So, do you need to drink eight glasses of water per day? Unless you are thirsty, drinking extra water will probably not offer superior health benefits but probably is not harmful either. However, if kidneys could talk, they would say that hydration challenges represent nothing more than highly marketed peeing …

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16 May 2021Mental Wellbeing Can Lead To Lower Healthcare Costs

There are many reasons why mental wellbeing is important. Not only is it protective against physical illnesses and linked to greater productivity, but the mental wellbeing of a population is essential for a country’s sustainability, long-term growth and development. But despite the clear benefits, governments tend to focus public spending on treating and preventing disease, and providing care for those who are ill. While this is important and should continue to be prioritised, such strategies alone won’t increase levels of mental wellbeing overall. Not only would enhancing mental wellbeing across all segments of the population lead to better health on average, it would also be beneficial from an economic perspective. In our latest study, we explored the link between mental wellbeing and government expenditure. We found that each increase in mental wellbeing in a population was associated with lower health and social care costs the following year. In other words, the greatest savings could be made by maximising everyone’s mental wellbeing. Mental health Mental health may be considered an umbrella term for a continuum – with mental illness or disorder at one end and mental wellbeing at the other. Mental illness may describe various conditions – such as depression or anxiety – which affect emotion, thinking, and behaviour. Symptoms may include sadness, fatigue, feeling alone, or not being able to focus on important things. A common feature is that mental illness involves feeling bad and functioning poorly. Mental wellbeing, on the other hand, is defined as feeling good and functioning well. Characteristics may include optimism, feeling energetic, relating well to others, or being able to think clearly. Importantly, mental wellbeing is more than the absence of mental illness. Not feeling depressed or fatigued does not mean that you will automatically feel optimistic or energetic. Economic assessments have tended to focus on the costs of mental illness – not the significant savings that mental wellbeing may generate. Yet, mental wellbeing is predictive of physical health and longevity – for example better immune function, being more physically active, and faster recovery from physical illness – including cardiovascular disease, heart attack, and stroke. Mental wellbeing also implies resilience – the ability to cope with the normal stresses of life. This is an important protective component against various mental and physical health problems. Taking all these benefits into consideration, it’s not surprising that mental wellbeing will have implications for health and social care costs. Mental wellbeing and expenditure In our study, we assessed the mental wellbeing of 3,508 Danish participants in 2016 by using the Warwick-Edinburgh Mental Well-Being Scale (WEMWBS). This scale consists of 14 positively worded questions (asking about a person’s degree of optimism, feelings of confidence, whether they feel relaxed or interested in new things). This results in a score between 14 and 70 for each participant. The higher the score, the better the mental wellbeing. We then looked at two types of Danish government expenditure: healthcare expenditure per person (including money spent on general practitioners or specialists, hospitalisations, outpatient services, prescription medicines), and sickness benefit transfers per person (this is government-compensated sick leave from the workplace). We adjusted for expenditure from the previous year, alongside other relevant factors – including whether participants had a diagnosed mental disorder. We did this to make sure our results would not be inflated due to ongoing illness, or simply reflect the higher costs that are generally associated with mental illness. We found that mental wellbeing in 2016 predicted both expenditure outcomes in 2017. Each point increase in mental wellbeing for each person was associated with US$43 (£31) less in healthcare costs, and US$23 (£17) less in sickness benefit transfers. This may not sound like much. But let’s say the inhabitants of a town with a population of 50,000 were to each experience a single point increase in mental wellbeing. According to our estimates, the collective improvement in mental wellbeing would be associated with about $2m (£1.4m) less in healthcare costs, and about $1m (£700k) less in sickness benefit transfers over the following year for this town. This example – albeit hypothetical – is consistent with other research showing that municipalities or zip-codes with higher levels of average wellbeing have significantly lower healthcare expenditure. Our results indicate that increasing levels of mental wellbeing would, even over a short period of time (i.e., one year), curb care costs for physical as well as mental illness. Enhancing mental wellbeing But in order to improve mental wellbeing for everyone, governments will need to intervene and work with community organisations and municipalities to create environments or foster behaviour that protects mental health and enhance wellbeing. On an individual level, things such as self-care, mindfulness, as well as concentration and flow (the state of being completely absorbed, focused and involved in something), are all effective ways of enhancing mental wellbeing. Staying physically, mentally and socially active, maintaining close social ties, and getting involved in meaningful challenges or causes (such as charity or volunteer work) are all essential principles for improving mental wellbeing. Promoting mental wellbeing universally may not only help people on an individual level, but can lead to mental wellbeing spreading from person to person. This is very important, because ultimately the more people there are in a community with high levels of mental wellbeing, the more likely it is that those with mental health problems or other difficulties can be supported by those around them. By curbing expenditure through the promotion of mental wellbeing, savings could in due time be allocated to other areas within and beyond the healthcare sector where there is a need. As we see it, investing in mental wellbeing should not be a question of “can we afford to?”, but infinitely more a question of “can we afford not …

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16 May 2021Interview with Frank Ahedo, Further Group CEO

Serious illness treatment cover offered by the Further Group means all treatment costs, arrangements (appointments, hospital visits, etc.) and logistics (travel and accommodation) for serious conditions such as cancer and cardiovascular conditions, or when a patient requires treatment such as neurosurgery or organ transplant. This is not to be confused with traditional serious illness coverage which is limited to lump sum payout following a diagnosis. Nowadays, any discussion around healthcare for your employees will inevitably center around Covid. At a time when the pandemic and its challenges are still making headlines as outbreaks, infection rates and vaccines flood every news bulletin, it’s easy to overlook the impact on other areas of healthcare. Many of these involve complex or life-threatening illnesses, such as cancer. Global Benefits Vision recently spoke to Further Group CEO Frank Ahedo about the impact that Covid is having on the treatment of serious medical conditions, and how this changing landscape will affect the way employees have access to treatment. Global Benefits Vision: Good morning Frank. We are glad to have your perspective as the CEO of an organization that specializes in serious illness treatment. Over a year into the pandemic, what would you say are the likely lasting effects of Covid-19 on healthcare around the world? Frank Ahedo: Disrupted access to treatment and the backlogs this has produced as a result is something we are seeing in every country and region where we operate. The challenges are significant across all areas of healthcare as hospitals and specialists try to resume normal services. The Covid response has consumed so much capacity and so many resources, from intensive care and anesthesiology services, to hospital space and clinical facilities. This has drained capacity from other services, which has compromised their ability to operate at pre-Covid levels. This has inevitably created significant backlogs and waiting lists for crucial services. I have just finished reading the latest WHO report, which indicates that 90% of countries are reporting multiple disruptions to health services. In 2020 on average over 50% of services were disrupted and, while not as bad in 2021, the disruptions continue with an average of over one third of services not functioning properly. This has had a knock-on effect in terms of diagnosing and treating serious illnesses. GBV: You recently co-hosted a webinar with another organization that we know well here at GBV, International Group Program (IGP). The focus on cancer was quite specific, what was the reason for that? FA: We see clearly from the mainstream media where the focus is: firmly on fighting Covid. Other really major issues looming on the horizon are being ignored. For example, the impact Covid will have economically does not get as much attention as it should do, in my opinion. Another area is cancer. We are seeing the stats, I read the medical journals and the studies and figures are very worrying. The increase in five- year mortality is estimated by the WHO to be as high as 15% for some cancers. We believe this is a topic that employee benefits specialists should be aware of, in terms of how this may impact their employees in the future. IGP is a strategic partner of the Further Group and asked us if we would participate and involve medical experts to help raise awareness among IGP clients. We had the opportunity to speak with Professor Philippe Schucht, a Swiss neuro-oncologist and Professor Karol Sikora, a British oncologist, both world-leading authorities on cancer treatment. Both professors emphasized the direct impact on mortality rates and life expectancy. Professor Sikora, who previously served as head of the WHO cancer program, outlined key reasons why cancer care has been so badly affected. The reasons included the fact that resources have been diverted to fight Covid and this applies to both physical and human resources. A significant portion of available hospital space needed to be used, surgeries were cancelled, and trained doctors and nurses were mobilized to fight Covid. This has occurred across the globe, but one statistic that I found particularly alarming was that by June 2020 Cancer Research UK reported that there was already a backlog of 2.4 million cases in the UK alone. The number of cancelled or postponed cancer treatments has been documented as ranging from 60% in Germany to as much as 80% in France. In Latin America, figures for certain countries can be as high as 70% for delayed surgery, in a region where resources were already strapped pre-pandemic and where outcomes are poorer still. India is unfortunately back in the news with the devastation of another wave, and we know that in the first wave less than 20% of cancer surgeries were being completed. Backlogs created by cancellations and delays will directly impact waiting lists and access to treatment for patients across the globe. Specialized and expensive treatments such as Proton Beam therapy and CAR T treatment¹ will be even more difficult to come by locally. In many countries as it stands there is very limited availability and in some no opportunity at all to access these treatments. GBV: Apart from surgery what other areas of cancer treatment have been affected? FA: There is a prevailing opinion that the pandemic has reversed the progress made on cancer, potentially by years. This affects the entire cancer treatment journey, from screening, to pathology and diagnosis, to oncologist referral and all the way to treatment itself. If we begin with screening, Covid has pulled so many resources away that there has been a huge drop in detection rates. One study I read found that mammograms were down by 87%, and colonoscopies by 90% in the US alone. As a result, we are seeing fewer reported cases of cancer. Professor Sikora pointed out that the opposite will actually be true over the long term. Once detection and reporting begin to pick up again, many of these cases will be at a more advanced stage than we would usually expect. Unfortunately, advanced stages have a lower likelihood of recovery and are more complex to treat. This has been directly called out by the WHO, which referred to the pandemic’s impact in Europe as “nothing short of catastrophic” in a recent statement. They specifically cited the combination of travel restrictions and system strain due to the Covid Response as responsible for the disruption, delayed diagnosis and delayed treatment that are weakening the likelihood of recovery or survival for hundreds of thousands of people.² If you do manage to get screened, you are then up against another hurdle when it comes to diagnosis and especially so-called invasive diagnostic procedures like endoscopy. Not only have anesthetic services been severely curtailed, but the precautions to be taken around what the medical community refer to as aerosol-generating procedures mean that fewer patients can be attended on any given day. For certain types of cancer such as colorectal, gastric or esophageal, endoscopy is the only route to diagnosis and therefore an entire area of diagnostics has been cut off. Taking screening, diagnostics and surgery together, we are seeing three potential barriers to access that create delays for a cancer patient. Data is still coming in, and Professor Sikora believes it will be another two or three years before final confirmations can be made. However, figures forecast for the UK estimate that the number of deaths on a five-year diagnosis basis will increase by approximately 5% and 6% for lung and esophageal cancer respectively, at least 7% for breast cancer and as much as 16% for colorectal cancer.³ GBV: Looking at types of healthcare systems themselves, what are you seeing in terms of responsiveness or ability to cope? FA: There really is very little difference in terms of geography. Whether we are talking about resource-rich countries or developing countries, Covid does not differentiate between any one type of healthcare system. With few exceptions, every system has been affected. One key problem area is primary care. In many systems, primary care serves as a form of gatekeeper that is proving problematic in the Covid and post-Covid era. When a person has symptoms of cancer, time is life. When patients are waiting for a month for a referral to a specialist and scheduling of a diagnostic CT scan, there comes a point where other options have to be considered. This is a specific area that we as a business have focused on as it is clear that greater efficiencies can be achieved and these time frames can be cut by more than 60%. I would also refer back to the WHO statement I mentioned, because they not only highlighted that cancer treatment costs are daunting for all countries, but that the economic crisis coming out of Covid is exacerbating pre-existing inequalities, which creates another barrier to access for many.4 In other words, on top of backlogs, the inevitable strain on government budgets will directly affect healthcare spending. That being said, there are definitely countries where there is capacity to offer specialized treatment quickly and effectively. This is really where we have seen an acceleration in demand. The ability for a person living or working in one country to travel and be treated out-of-country and get back home, avoiding the barriers to care that may exist locally, is no longer the preserve of the wealthy. Employers and employees recognize that choice and access should not be limited by geography. We are globally connected in all other walks of life and we believe that healthcare should be no different. GBV: We just discussed the direct health impact of the pandemic. But what are you seeing so far in terms of changes in how people interact with healthcare options? FA: You know, if there were any good to come out of Covid, this would likely be how people will engage with the medical community going forward. Change in behavior normally requires prolonged change, and here Covid has clearly acted as an aggressive catalyst. Naturally, people have been tense and frightened about physically showing up at a hospital or sitting in a crowded waiting room. This is especially true of those who know their immune systems are already compromised. Combined with the mounting service backlog and their inability to access what they need, this has made people much more willing to try a virtual option. Once they do try it, we see that the simplicity and efficiency brings them back online, again and again, and with increasing confidence. Such is the growing acceptance of virtual, and it is something that I believe is here to stay to more efficiently manage cancer patients. For those who would say that we are losing the human togetherness component, by going virtual, for cancer patients it actually can be a much more connected experience. It’s true that, instinctively, people want to be together, to be accompanied, to be with their families when news is given or decisions are made. But these same people are also realizing that they can stay at home, in familiar surroundings, even accompanied by their loved ones, and in many cases are physically much more comfortable than travelling or sitting in a waiting room chair. Family members from virtually any corner of the world can also join online, which is obviously a huge benefit that specialized medical platforms have brought. We see this a lot now with employees who have or are about to travel abroad for cancer treatment. There are more and more virtual consultations that are happening across borders using advanced platforms to facilitate the sharing of crucial diagnostic imagery and virtual consultations with international specialists. Administration too, can be streamlined and centralized with digital archiving, form completion and automated scheduling. These virtual platforms that make it possible to access specialist doctors can bring a range of benefits to employers by putting key employee healthcare services in one place that can be accessed anywhere. From the perspective of the specialist, having fewer face-to-face touchpoints means more time to spend in other areas of practice such as surgery, where a surgeon’s key competencies actually reside. In this sense, virtual options serve to free up potentially life-saving resources. Amidst all of the devastation that Covid has brought, the advances made in the area of virtual healthcare and the adoption by both patients and the medical community has changed the way healthcare will be delivered forever. GBV: Apart from the convenience to patient and doctor what impact is the shift to digital having on medical outcomes? FA: Speed and accuracy of diagnosis are key here. Virtual consultations offer an ideal triaging system: less urgent, complex or serious conditions can be easily handled online, creating space for those that do require timely, in-person attention. Doctors also suffer less strain with a more streamlined case load, leaving less margin for error or rushed decisions. Speaking of margin for error, this is also an area where the acceleration of Digital due to the Covid response has had another positive impact. Mistakes happen, often in the form of misdiagnoses and typically in complex cases or in hospitals and countries that may be lacking the resources, or experience dealing with particular conditions. The digital age has marked out a new horizon here, with a massive shift for greater knowledge and accuracy when it comes to diagnosis and decision-making. Patients can be easily referred for a second opinion with the right specialist, anywhere in the world. Diagnostic tools, documents and patient histories can be centralized and accessed with less risk of missing or obsolete data. We are also seeing the emergence of AI-based diagnostics tools that for certain conditions can be more precise than the human eye. Apart from what this clearly means for saving lives, extending life expectancy and improving quality of life, there are also huge cost savings. Mistakes are a major driver of cost, as they can result in unnecessary or ineffective treatment cycles. Getting it right first time means these costs are avoided. GBV: What was the effect of the pandemic on your own employees and how Further operates? FA: Further has offices in several countries hard-hit by the pandemic, including China, the UK and Spain. It was clearly a time when uncertainty and stress could have got the better of us. Our headquarters is in Madrid which was directly affected by one of the most severe lockdowns at the beginning of the pandemic. However, because the very nature of our day-to-day business involves connecting with people remotely, we found ourselves easily applying this same approach to each other as a team. Operationally, I am proud to say that we did not miss a beat. Patient-wise, we saw considerable interruption at the onset of the pandemic, where many countries were locking down and no one country was truly prepared for what was happening. However, two things began to happen that we have found incredibly interesting: Firstly, we saw a shift in demand from a destination focus to a hospital focus, which is in keeping with the strategy of expansion seen in prestigious medical centers of excellence like MD Anderson and Johns Hopkins. This included paying for accommodation during country-specific quarantine periods and offers to include Covid vaccination for patients prior to their return home. For us, it has been incredibly enlightening to witness the speed at which the industry, hospital and governments have moved. As a result, our business has since grown dramatically, with patient volumes now higher than pre-Covid. We also saw a 400% jump in virtual interaction, due to the massive demand for remote consultations which we were well placed to respond to as a result of the recent incorporation of Trustedoctor into the Further group. GBV: There is a big focus on the provision of mental health benefits by employers now. Is this to the detriment of traditional health benefits? How do you see it? FA: As an employer we understand the importance of employee mental health is more important than ever. The focus on mental health by employers is warranted and is refreshing to see. Employee wellbeing is fundamental for any company to work efficiently, and companies need mentally healthy employees for business stability. We see the focus in our daily discussions with employers and we see in the research that there is a considerably growing focus on mental health. An employee benefit trends survey published by AON showed 59% of employers had a specific mental health strategy in place. Clearly, mental health issues have really been brought to the fore because of Covid and while this is a positive it is important that employers do not forget about the future potential impacts in areas such as cancer. GBV: What does all this mean for employers? What advice can you give employee benefits professionals who are navigating post-Covid options for employees? FA: There is a lot of fragmentation, with multiple providers across multiple geographies. For both the employer and the employee trying to work out their options, this creates something of an admin nightmare in terms of management, information, budgeting, reporting and consistency of experience. Moreover, providers may offer similar services yet each comes with different SLAs, conditions of use and entry points. The pandemic has stretched Human Resources departments into areas totally unforeseen two years ago. We still cannot say for certain when, how or where things will return to the levels of access or care we had readily available in the past. For this reason, and in our experience, employee benefits professionals need to seek out solutions that take away the heavy lifting. Many employers have employees spread across different countries, and so anything you can do to reduce the number of service access points, contacts, procedures and reporting flows will make it easier for you in your day-to-day, and for your employees. This is particularly true when it comes to serious illnesses such as cancer if an employee should ever need fast access to the right treatment. References CAR T-cell therapy (Chimeric Antigen Receptor CAR T-cell therapy): a type of treatment in which a patient's T cells (a type of immune system cell) are changed in the laboratory so they will attack cancer cells. After T cells are first extracted from the blood, the gene for a special receptor that binds to a certain protein on cancer cells (known as a chimeric antigen receptor, or CAR) is added to these cells. After a few weeks, the CAR T cells are put back in the bloodstream via IV drip World Health Organization. Statement – Catastrophic impact of COVID-19 on cancer care. Copenhagen; February, 2021. Maringe C, Spicer J, Morris M, Purushotham A, Nolte E, Sullivan R, Rachet B, Aggarwal A. The impact of the COVID-19 pandemic on cancer deaths due to delays in diagnosis in England, UK: a national, population-based, modelling study. Lancet Oncol. 2020 Aug;21(8):1023-1034. doi: 10.1016/S1470- 2045(20)30388-0. Epub 2020 Jul 20. Erratum in: Lancet Oncol. 2021 Jan;22(1):e5. PMID: 32702310; PMCID: PMC7417808. See note …

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15 May 2021Issue 058,
May 2021

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16 April 2021Three Ways Behavioural Psychology Might Help You Lose Weight

There’s no shortage of weight loss programmes out there to choose from, each of which claim to have the key to shedding pounds. One of the latest popular weight loss programmes out there is Noom, which claims that behavioural psychology is the key to helping people lose weight for good – including those who haven’t had success in the past. Behavioural psychology aims to understand why we behave the way we do and analyse patterns in our actions and behaviours. Using it to aid weight loss means understanding the many factors that influence weight gain, such as easy access to unhealthy foods. This can help us make changes to prevent this from happening. Although one study has looked at Noom’s effectiveness when it comes to weight loss, it’s still difficult to say whether it’s more successful than other similar programmes in aiding weight loss. But we do know from a wide body of research that many behavioural psychology techniques can be used to help people successfully lose weight. 1. Goal setting Many weight loss programmes start by asking people to set a goal. And research indeed shows that creating this “intention” actually motivates you to change your behaviour. And this is true no matter if your goal is to lose a certain amount of weight, eat healthier or to exercise more. But since physical activity on its own is unlikely to cause a significant amount of weight loss, a combination of goals may be most effective in keeping people motivated and helping them reach their goals. But how many goals should a person set? One study found that frequent goal setting means that you’re more likely to implement changes, which ultimately means you’re more likely to lose weight. However, there’s no concrete evidence of the exact number of goals to be set. Previously it was thought that goals had to be specific – for example, aiming to lose one pound a week until you’ve lost twenty pounds altogether. But more recent research suggests this may not true – with data showing goal setting is effective even if the goals are vaguely defined (such as aiming to be more active, rather than aiming to run for ten minutes everyday). The jury is also still out on whether goals should be large or small. But one review that looked at goal setting for behaviour change concluded that goal setting was effective when goals were challenging, set publicly, and was a group goal. While only 6% of the studies in this review were about weight loss specifically, other research has found that people who have large goals (such as losing 20kg in three months) lose more weight than those with smaller goals (such as losing 5kg in the same time frame). The same has been found for goals relating to physical activity – showing how important setting goals is. 2. Self-monitoring Measuring your weight and what you eat – known as “self-monitoring” – is one of the most effective strategies from the field of behavioural psychology for weight loss. It’s also included in most weight management programmes. Self-monitoring works by making you more aware of what you’re eating and drinking, and what is happening to your weight. In turn, this can help you avoid overeating indulgent, unhealthy foods. People that are successful at losing weight – and keeping it off – weigh themselves regularly. Research shows weighing yourself at least once per week leads to the greatest success – with one study even suggesting weighing daily. Recording what you eat takes more time then weighing yourself, but it’s as important and is proven to work. The trick here is finding an easy way to do this so that you can sustain it. While filling out food diaries works, people can often feel like they don’t have time or are too tired at the end of the day to do so. A compromise could be to record what you eat when you first begin trying to lose weight, then weigh yourself to keep on target. If your weight goes back up, go back to recording what you eat. There are concerns that tracking weight and diet – particularly with weight – can create obsessiveness and lead to eating disorders. However, other research has shown self-monitoring has no bad effects. Overall, self-monitoring may not work for some people, but is proven to be helpful for many. 3. Social support The third strategy is to get feedback and support from friends, family, or supervised programmes. The reason social support helps is because it creates a sense of accountability. Research has shown that people who attend weight loss programmes with a friend or family member are more likely to stick with it and lose more weight. There appears to be no particular person that’s better for motivation – the important thing is that supporters are engaged. Since most weight loss programmes that use these strategies from behavioural psychology work, the key is to find a programme that you like and stick to it. If a programme or app isn’t your thing, then set a goal, measure your progress, and ask someone in your social circle to …

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16 April 2021Phone Call Anxiety: Why so Many of Us Have It, And How to Get over It

Staying in touch with loved ones without seeing them in person has become even more important during the pandemic. But for some people, making or receiving calls is a stressful experience. Phone anxiety – or telephobia – is the fear and avoidance of phone conversations and it’s common among those with social anxiety disorder. Having a hatred of your phone doesn’t necessarily mean you have phone anxiety, although the two can be related. There are, of course, many people who dislike making or receiving calls. But if this dislike causes you to experience certain symptoms, you may have phone anxiety. Some emotional symptoms of phone anxiety include delaying or avoiding making calls because of heightened anxiety, feeling extremely nervous or anxious before, during and after the call and obsessing or worrying about what you’ll say. Physical symptoms include nausea, increase in heart rate, shortness of breath, dizziness and muscular tension. If you feel like this, you’re not alone. A 2019 survey of UK office workers found 76% of millennials and 40% of baby boomers have anxious thoughts when their phone rings. Because of this, 61% of millennials would completely avoid calls, compared with 42% of baby boomers. If you suffer from these symptoms, there are some things you can do to make it easier. Avoiding phone calls Talking on the phone can be daunting because we’re limited to just the sounds of our voices. In the absence of all other social cues – including gestures, body language and eye contact – we can often feel self-conscious of the sound of our own voices and our choice of words. Thanks to technology, we can often go days, weeks or even months without directly speaking to others on the phone. One study found anxious people prefer texting over phone calls, rating it a superior medium for expressive and intimate contact. Some people opt for texting because it gives them time to think about the wording of their messages, providing the opportunity to be informal. In some cases, they develop a different personality separate and in contrast to their real-life, more reticent, self. Research also suggests phone anxiety is related to a preoccupation with what the other person thinks of them. By eliminating the immediate reaction of others in spoken conversations, text messaging may offer those with phone anxiety a way of making social contact without the fear of rejection or disapproval. Another reason phone calls can sometimes feel overwhelming is the pressure that comes with being someone else’s focus. In face-to-face conversations, we have several distractions in our environment; like gazing out of the window or, ironically, checking the missed call notifications on our phones. This can make the interaction feel more casual and the conversation flow naturally. On a call, there are no external distractions, so it can feel like the spotlight is on us to answer questions straight away. Pauses can feel extremely uncomfortable too. In person, you can see when someone is distracted or thinking but on the phone brief silences can feel awkward. We’re also becoming accustomed to being able to review emails, texts and social media posts before hitting the send button, so a phone conversation can feel impulsive and risky. It’s easy to put off or completely avoid calls when you’re feeling anxious, but the more you procrastinate, the worse the anxiety is likely to get. The good news is you don’t need to suffer in silence, or over text messages. There are several useful techniques that may help you break the pattern. Pick up the phone One of the most effective ways to overcome phone anxiety is to expose yourself to more phone calls. The more you do it, the less overwhelming it becomes. It’s also likely that your phone anxiety is linked to a lack of experience. The more practice you have, the less anxious and more confident you’ll feel. You can start this process by making a list of the people you need to speak to on the phone, such as friends or colleagues, and go through each one by reflecting on what it is about the call that makes you anxious. For example, it might be making a mistake or feeling judged. When the call is over, acknowledging your success will help you stay motivated for the next call. If you’ve tried to combat your phone anxiety or you think you might benefit from seeking professional help, counselling is a great option and there are a number of talking therapies available. Cognitive behavioural therapy is a very effective treatment for social anxiety, and there’s an online option that might be a suitable alternative if you feel a bit nervous about speaking to someone in …

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16 April 2021A Year into the Pandemic, The Coronavirus Is Messing With Our Minds as Well as Our Bodies

COVID-19 has hijacked people’s lives, families and work. And, it has hijacked their bodies and minds in ways that they may not even be aware of. As we see it, SARS-CoV-2, the virus that causes COVID-19, is a sort of zombie virus, turning people not into the undead but rather into the unsick. By interfering with our bodies’ normal immune response and blocking pain, the virus keeps the infected on their feet, spreading the virus. People typically think of zombies as the stuff of science fiction. But in the biological world, zombies are all over the place, from the Ophiocordyceps fungus that perpetuates itself by zombifying ants; to Toxoplasma gondii, a single-celled parasite that completes its life cycle by leading rodents into the jaws of predators. Zombie viruses are also a real thing, influencing their host’s behavior in ways that enhance the viruses’ evolutionary fitness. One of us is a professor of psychology. The other is an emergency physician. Both of us are evolutionary medicine researchers. And we suggest to you that SARS-CoV-2, the virus that causes COVID-19, is yet another zombie virus, a master manipulator operating under the radar. This pandemic may have unleashed a horde of the unsick: infected and unwitting victims of a manipulative virus. How the virus turns us into the unsick It is the unsick who spread the virus most readily. About 40% of those with SARS-CoV-2 are asymptomatic spreaders, never showing symptoms at all. And those who do show symptoms are most contagious in the two days before symptoms appear. Why people don’t feel sick earlier – or sick at all – might be part of the evolutionary strategy of SARS-CoV-2. A look under the hood of the virus reveals more about that manipulative machinery. SARS-CoV-2 interferes with a person’s immune response; this is why people don’t necessarily feel sick and withdrawn as they would in a typical viral infection. Instead, SARS-CoV-2 silences the body’s alarm signals that otherwise would orchestrate anti-viral defenses. It blocks interferons, a set of molecules that help fight viruses. Interferon activity makes people feel more depressed and socially withdrawn – so when the novel coronanvirus impedes interferon activity, mood is lifted, sociality is increased and you feel less sick. The virus also decreases pain perception. Normally, pain motivates us to hunker down when we need to heal. But SARS-CoV-2 blocks this response by preventing the transmission of pain signals. This is why people feel fine even when they are teeming with virus before the onset of symptoms. At the same time, SARS-CoV-2 dampens the body’s response to infection. It hinders pro-inflammatory cytokines, molecules that help spur the immune response. This too makes hosts feel better than they should. Typically, feeling sick helps our bodies prioritize healing by making us reduce our energy expenditure. With SARS-CoV-2, unsick hosts have the energy to do as much as they used to, maybe more. An evolutionary leg up How SARS-CoV-2 evolved to manipulate humans is still speculation. The virus could have first evolved in other mammals, like pangolins. There, it may have acquired its immune-evading, manipulative machinery before jumping to humans. No intent or thought is involved; SARS-CoV-2 is not scheming to take over your body. This is simply evolution at work, nothing personal. The virus evolves because of variation and selection. And in a pandemic involving hundreds of millions of infections and trillions of viral replications, plenty of genetic variants could give it an evolutionary leg up. More research is needed to determine whether new variants make people feel unsick for longer. That, of course, would make it even easier for the virus spread during the asymptomatic phase. For example, a paper in the Journal of Transnational Medicine reported that the GZ69 variant is associated with high shedding rates in asymptomatic patients, meaning that people are highly contagious even when they are feeling fine. It’s possible that SARS-CoV-2 might make people feel even better than they would without infection from the virus. One study found people did not reduce their time out in public even when they had COVID-19 symptoms. If anything, they went out more. Any variant that does this clearly has an evolutionary advantage when it comes to transmission. Using surveys and social media data, our research team is now testing whether people are more social during their most infectious days. Things to consider We must take seriously the possibility that the virus is zombifying us – altering our behavior in ways that help perpetuate it. By keeping people feeling good when they are capable of spreading the virus, SARS-CoV-2 spreads under the radar, more like a sexually transmitted disease than a respiratory virus. Many of us have unwittingly acted as vehicles for its propagation, with stunning implications. Our behavior might not be in our own evolutionary interests. Instead, the unsick may be serving the virus. Researchers often ignore the impact that viruses might have on our moods and behaviors. But like ants and rodents, humans are not exempt from the neural and behavioral hijacking that’s widespread in the natural world. We believe that it is critical to consider the possible “anti-symptoms” of this virus: temporary reduction in pain, feeling more energetic than normal and perhaps even wanting to be around people more than usual. With all this in mind, here’s some advice, likely the most ironic you’ve heard in the last year: If you’ve been feeling surprisingly good the last few days, you might want to get a COVID-19 …

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16 April 2021Covid-19 Stress Toll Is a Family Affair: 4 Ways to Support Mothers’ Mental Health

            As we pass the one-year anniversary of COVID-19 being declared a global pandemic, its impact on the mental health and well-being of children is undeniable. Indeed, news headlines on whether “the kids are alright” have frequently surfaced, bringing to light the immense challenges for kids, and their families, as they cope with ongoing changes during COVID-19, including online schooling and social distancing from friends.. While the lives and routines of children and youth have certainly been turned upside down over the last year, it is increasingly clear that the mental health impact of the pandemic is a family affair. Parents have lost child care, taken on home-school responsibilities, shifted to working from home and suffered from several additional stressors, such as job loss and changes in employment. These COVID-19-related challenges have been especially hard on mothers, who are most likely to shoulder the burden of increased home-schooling and household demands. Our research team sought to find out if these stressors are linked to elevated rates of maternal mental health difficulties during the pandemic. Parent mental health during COVID-19 Early reports during the pandemic pointed towards elevated rates of depression and anxiety, especially for mothers. What wasn’t known was whether these rates truly demonstrated a shift in mothers’ anxiety and depression symptoms, compared to how they were doing before the pandemic. To find answers to this question, we used data from mothers who have been taking part in long-term research, and compared their pandemic mental health to previous periods. Over the past 12 years, the All Our Families Study has been following nearly 3,000 Canadian mothers and their children to better understand their health and well-being. Mothers were recruited into the study when they were pregnant, and their children are now nine to 11 years old. In a recent study, we showed that between May and July of 2020, mothers in our study reported higher rates of depression and anxiety than they reported previously. Specifically, rates of depressive symptoms increased to 35 per cent during COVID-19 from 19 per cent before the pandemic, and rates of anxiety symptoms also jumped to 31 per cent from 18 per cent. Maternal mental health difficulties are increasing Increases in maternal mental health difficulties are not experienced uniformly by all mothers. In our study we saw especially high increases in mental health difficulties for mothers who reported losing their job or family income. We also saw higher increases in anxiety and depression in mothers who had difficulty accessing child care, and who reported that they were struggling with balancing home-schooling with work responsibilities, regardless of income. The COVID-19 pandemic has highlighted inequalities that were deeply entrenched before the pandemic even happened. Specifically, women are more likely to be precariously employed, earn less income and take on the majority of household tasks and child care responsibilities. These gaps are even larger for low-income women and women of colour. A sustainable recovery plan following the pandemic needs to consider how families, but especially mothers, can be better supported in order to ensure optimal mental health for children and youth. Strategies that promote family well-being It is clear that the strain of the pandemic is taking a toll on mothers’ mental health. This is concerning because we know that when mothers aren’t doing well, their children are often struggling too. To ensure mothers are alright — knowing this will help their children be alright too — they need access to resources and support to help get through this difficult time. Decades of research have shown that the well-being of mothers is critical for children and youth to flourish, which suggests maternal mental health and well-being should be a priority for COVID-19 pandemic recovery efforts. We’ve identified four important ingredients for a successful pandemic recovery for mothers and families. 1. Mental health supports for mothers Maternal mental health was a national concern before the pandemic and our data demonstrate that there has been nearly a two-fold increase in depressive and anxiety symptoms in women with children under the age of 12. Increased availability of mental health services that are easily and widely accessible are needed. An increase in uptake of tele-mental health services (mental health support that is provided online or by phone) has the potential to provide mothers with the opportunity to obtain mental health support while reducing barriers that often limit accessibility, such as location or time. 2. Ongoing support for family incomes A major stressor that was associated with increases in mental health symptoms in our study was the loss or disruption of family income as a result of the pandemic. Research has shown that maternal employment was hit harder during the pandemic than paternal employment. Recovery plans that include the support and provision of resources during a time of crisis will be critical in curtailing mental health difficulties that could ensue within families. 3. Shared responsibilities for home-schooling, child care and household tasks Our findings showed that mothers who were having difficulties balancing multiple roles had higher rates of depression and anxiety. Although fathers have increased their participation in unpaid labour over the course of the pandemic, including child care and domestic tasks, there remains a deficit in these contributions between mothers and fathers. As COVID-19 rages on, it is critical for policy-makers to invest in universal supports for child care and out-of-school care, and focus on providing flexible leave policies that allow both mothers and fathers to adequately care for and home-school their children. 4. Stable, safe, and affordable child care and schooling for children Mothers in our study reported on their mental health at the outset of the pandemic, when schools and daycares were closed. The pandemic has highlighted that both our economy and the mental health and well-being of those who participate in it are dependent on high quality care and education for children. Our study underscores that there is a devastating impact on families when child care and schooling are unavailable. To the extent possible, these services need to remain open for parents and children alike. The pandemic’s ongoing toll on families One year on, the COVID-19 pandemic continues to affect the well-being of families. The toll this has taken on mothers in terms of loss of jobs and increased child care and schooling responsibilities has had a marked effect on mental health. Many traditional support networks have changed from in-person to virtual, due to physical distancing requirements. This can result in a loss of access to practical help. Support from friends, family and community are essential, but so is institutional support. In times of crisis, families need access to stable supports including financial assistance and predictable child care and schooling. When caregivers are well supported, the whole family …

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16 April 2021Global Scale, Local Service – The Vital Importance of Strong Network Partners

Generali Employee Benefits recently onboarded network partner for the Belgian market, Vivium. Global Benefits Vision interviews Hans Callebaut, Commercial Director at Vivium and Thierry Mestach, Chief Network Officer at GEB, to learn more about the added value this pairing will bring to the Employee Benefits market and more specifically to the multinational corporate customer segment. Hans Callebaut Hans Callebaut is Commercial Director Employee Benefits at Vivium, a Belgium based Life and Non-Life insurance provider, that works almost exclusively with brokers. A top 3 player in the Belgian group insurance market, Vivium is part of the cooperative insurance group P&V Assurances; a market leading player that aims to offer its customers the best products and services at a fair price and actively contributes to responsible citizenship. Throughout its 110+ year history, the P&V Group has built a reputation for being strongly – and consistently – led by values focused on long-term sustainability. The Life department of the Vivium brand offers global Employee Benefit packages, including Pensions (Branch 21 and 231 solutions), Life and Disability. For the past two years, Hans has led the account management and business development teams. Prior to that, he enjoyed many years in senior roles in the international Employee Benefits and Pooling sectors. Thierry Mestach Thierry Mestach is Chief Network Officer of Generali Employee Benefits Network (GEB). GEB is one of the leading International Employee Benefits Networks and services an important number of the world’s major multinational employers. What are the employee benefit trends in the Belgium market? Hans Callebaut : Just like all big international corporations, Belgian companies are also focused on risk and cost optimisation; even the smaller ones. They’re looking into international solutions, but the traditional Pooling market is, in our opinion, decreasing in popularity. There is increasing interest to corporations looking at alternatives such as a global offer or captive programmes. And for this we need strong partners who can offer these solutions. How does working with GEB Network support Vivium’s strategic development plan? HC: One of the pillars of our strategic ambition for more organic profitable growth is based upon finding solutions for international corporates. We already have one partner for global employee benefit solutions, namely Zurich. But in order to accelerate and further develop this segment, it’s great to link in with a partner like GEB: knowing the power it has in the international market, and knowing that GEB is offering the kind of solutions our mutual clients are looking for. So, there was a clear strategic fit, but what else is key when assessing the viability of a potential network partnership? Thierry Mestach: We quickly realised that Vivium was a company with a culture of Employee Benefits, a culture of dealing with international corporate businesses and that has the right people in place; dedicated and familiar with the environments we’re operating in, familiar with the concepts of multinational pooling and working with captives. So, it was an obvious fit. Also, Vivium’s reputation in the market is strong. It’s clearly a company that is invested in – and will continue to be invested in – Employee Benefits. HC: There was a strategic reason to make this partnership of course, but it was also built on a value driven view of the market. We felt that with GEB we had a very solid and sustainable partner and this fits with our own values. Everything that Vivium puts into the market is built on solid, sustainable values. These might be considered cheap words if they’re not felt by clients. But when you look at how clients are scoring us – for example, with regard to operational excellence – it’s clear that we’re far outperforming the market. Our Net Promotor Score (NPS), that measures the client satisfaction for the management of their Employee Benefits contacts, beats by far the Belgian Employee Benefits benchmark. It’s because we saw the same values in GEB that we were able to very quickly move forward with the decision to partner up. What is Vivium’s experience of servicing large global corporations? HC: Our communication and management platform represented one of the first of its kind on the Belgian market and it’s still considered state of the art. We aim to have 100% Straight Through Processing (STP) with regard to the management of employer contracts. Thanks to this technology, which allows for full automatization of large contracts, implementation with large corporates can be completed within a timing that is quite spectacular when you benchmark this with the Belgian market. For the employer, the platform provides everything they need to know about the management of their contracts in real time, allowing them to manage their own contracts and interfaces. This saves time and creates efficiencies. We also now have an internal communication platform for employees in place too. Finally, for GEB, what advantages does this partnership bring to you and your clients? TM: As a network, it’s obviously important that we have really strong local partners. The upfront differentiator for networks used to be based largely on the number of partners – and the number that sat within our control: i.e., that were affiliated. Now, the strength of Networks is measured by the quality of local Network Partners. After all, they’re the ones that are visible to the client and the insured parties, not GEB. What’s really important to us is that we have leading players in their respective markets. It’s all about the service and capabilities that they put at our clients’ disposal. That’s, if you like, the first line of offence. In other words, even when we talk about international employee benefits, we’re in essence talking about local employee benefits first. And it’s related by definition as quality of service to international clients is based on local knowledge and expertise; local regulations; local taxes; local customs even. It’s also about having the capabilities to ensure that digital tools and interfaces work on a local level, ultimately ensuring that globally implemented benefits are accessible to local employees. From the moment we met with Vivium, there was a genuine eagerness to work together; a meeting of the minds if you like. We quickly saw that we were mutually strong, with regards to both strategic direction and values. It took only 6 months from initial discussion to onboarding, a process that would normally take around 12 months. Their parent company P&V Assurances is not your average group, in terms of their cooperative values and ethos. They’re aiming for long-term sustainable solutions, as opposed to quick wins. And this is woven into how they work with all stakeholders. These are values that are very much aligned with …

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15 April 2021Issue 057,
April 2021

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16 March 2021Vaccines Alone Are Not Enough To Eradicate A Virus – Lessons from History

Smallpox killed countless millions – 300 million people in the 20th century alone – before it was finally declared eradicated on May 8 1980. It was a momentous day, marking what the current director general of the World Health Organization, Dr Tedros Adhanom Ghebreyesus, called the greatest “public health triumph in world history”. Smallpox, as one researcher has emphasised, “was eradicated solely through vaccination”. Today, this achievement feels particularly encouraging and seems ready for a reboot as governments worldwide tell the public that the COVID vaccine will soon end the pandemic and return life to normal. Worldwide, advance reviews are flooding in. Vaccines are a “light at the end of the tunnel”, our ticket to “normality”. They have brought a “real end” into sight. From New York governor Andrew Cuomo came the inevitable military analogy: the vaccine was no less than “the weapon that is going to win the war”. The current vaccination campaigns are not attempting to eradicate SARS-CoV-2, the virus that causes COVID. But, based on the history of smallpox vaccination, even the much lower bar of herd immunity will be difficult to clear if we pin so much of our hope on vaccination. Although the eradication of smallpox is often held up as proof of the definitive success of vaccines, it should not be forgotten that smallpox raged for centuries before it was finally brought to an end. One of the first steps towards eradication took place in 1796 when, as the somewhat apocryphal story goes, Edward Jenner injected pus extracted from a dairymaid’s cowpox lesion into the arm of his gardener’s eight-year-old son. The following 150 years were marked by concern about the vaccine’s efficacy, safety and side-effects. As late as 1963, British doctors were still alarmed by the slow uptake of routine smallpox vaccination, warning that this “indifference” would require a “vast programme of re-education”. Hesitancy was not the only problem. Well into the 20th century, vaccines were unequally distributed around the globe, and periodic outbreaks ensured that smallpox remained endemic in much of the world, particularly in developing countries. By 1967, when the WHO launched the ten-year intensified smallpox eradication programme, four other eradication efforts (hookworm, yellow fever, yaws and malaria) had already failed, and many involved in such programmes had become sceptical about eradication as a goal at all. Indeed, the 1966 director general of the WHO, Marcelino Candau, believed that disease eradication was simply not possible. What they had come to realise was that vaccines alone are not enough to contain or eradicate a disease. Instead, it would be essential to combine technological developments – such as the introduction of heat-stable freeze-dried vaccines and the bifurcated (two-pronged) needle – with efforts such as surveillance, case finding, contact tracing, ring vaccination (controlling an outbreak by vaccinating a ring of people around each infected individual), and communication campaigns to find, track and inform affected people. This sort of programme would encounter various challenges from funding to political strife to cultural practices and norms. It would also cost a whopping 20% of the WHO’s budget and take a decade of intensive labour – and come at the expense of other, more basic healthcare interventions. But eventually it succeeded. Smallpox, outside of the lab at least, was gone. All this time and coordinated effort, even though smallpox was in some ways an ideal candidate for eradication. For one thing, its symptoms were so obvious that it was easy to identify and track, and so also easier to contain. And smallpox was a disease unique to humans, affecting no other animals. Its eradication from human populations was its eradication from the planet. Low-tech public health strategies The history of smallpox eradication makes it apparent that high-tech vaccinations only work when they are effectively combined with low-tech public health strategies. These low-tech strategies include isolation and quarantine, and especially tracking and tracing, as well as the increasingly elusive elements of public trust and effective communication. Perhaps most clearly, the smallpox story shows that the control of COVID requires a global effort that attends to local needs. This is partly an ethical imperative, partly a practical one. We live in a world with remarkably porous borders, even in times of lockdown. If the smallpox eradication programme has taught us anything, it’s that lasting reprieve from pandemic disease is difficult, if not impossible, to achieve if nations insist on acting in seclusion. The glorification of the COVID vaccines follows a well-worn track in its presumption that the arrival of a vaccine heralds the pandemic’s end. Yet in the case of smallpox, our most successful vaccine story to date, this has required the glossing over of centuries of suffering and death and the intense public health struggle to contain the disease. Vaccination did not end smallpox. That was done by a small army of people and organisations working intensively and cooperatively across the globe, inventing and improvising a series of public health measures. We have inherited a recent medical and political past that values quick fixes and cures, blindly embracing these to the exclusion of the messy details of how healthcare actually works. It is not just the final eradication of smallpox, then, but also the personal and public health havoc it wreaked across the centuries that should guide our efforts. For these supply the context we need to create reasonable expectations about what the end of our current pandemic might look like and what it will take to get …

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16 March 2021Global Mobility Teams Prepare for Remobilization

It is often said that the only certainty in life is uncertainty. And never more so than over the last year. Not to mention for the foreseeable. What we do know for sure is that global mobility is not about to disappear in a (post) pandemic world, as has been suggested by some commentators. Opportunities abound and the richness of the global assignment will not be usurped by the remoteness of the virtual assignment any time soon. Global mobility will look different though. And right now, while projects remain on hold, open positions are waiting to be filled and borders have yet to fully reopen, it represents the perfect time to reset and reengage; to take stock of what the ‘new normal’ for global mobility looks like – for now at least. This is about ensuring you have the right back-up and support mechanisms to help you solve global problems, allowing you to move on a case-by-case basis with speed, efficiency, and flexibility. It’s probably safe to say that the pandemic has accelerated existing trends and generated new ones. And new technology underpins everything. Technology has rapidly adapted over the last year – as has the workforce – to facilitate remote working and on the ground support. Now, nearly two thirds (63%) of global mobility teams are planning to invest in new technology in the next 24 months.¹ The top benefit for global mobility professionals (41%) is operational agility to modify policies, process and supply chain to align with variable business environments. Other key benefits cited were: improvements in managing compliance and risk through connected systems and processes; enhanced data analytics for workforce planning; and enhanced employee experience through enriched quality of information provided about host country conditions.¹ For business leaders, the top benefit (60%) was better forecast versus actual cost tracking.¹ From analog to digital By its very nature, the global mobility sector – supporting people anytime and anywhere - seems perfectly suited to innovation and digitisation. But, like the rest of the business to business (B2B) world, the services and support available have struggled to mimic the easy and informative standard of business to consumer (B2C). Why? Because B2B was always considered too complex and, therefore, human interaction essential. This has been gradually changing over recent years as the younger generation – those for whom direct purchases and servicing are simply the norm – have entered the workforce. In fact, experts predict that by 2025, 80% of B2B sales interactions between supplier and buyers will occur in digital channels.² This is being borne out already in the field of globally mobile benefits. It is articulated by partners that can offer you innovative and sustainable solutions that add value beyond the policy. This is about allowing for the kind of speed, efficiency and flexibility of service and support that global mobility departments need – from administration, reporting and analytics to duty of care. From business to people On that note, it is worth zooming in on the fact that duty of care is now considered more important than compliance. While in a pre-pandemic world, the wellbeing drivers for global mobility teams were set squarely on duty of care and legal requirements, it seems that productivity and staff engagement are now considered more important drivers.¹ Wellbeing - physical, psychological, financial and social - is now being placed firmly at the heart of global mobility strategy. In fact, the wellbeing aspect could be the thing that encourages employees to accept international opportunities in future. According to 14% of attendees at a Crown World Mobility webinar, health and wellbeing support – not to mention safety – will be top of mind for employees as part of the decision-making process.4 Prior to this year, it’s probably safe to say that assignees did not pay much attention to the finer details of their benefit policies. Now, every aspect counts, from exclusions to on-the-ground availability and access to health and wellbeing support services. Digital capability will be essential to delivering consistent wellbeing support on a global basis, in a way that also meets individual needs. Wellbeing apps (73%), employee assistance programmes (89%) and telemedicine (75%) are all considered relevant by international HR professionals.3 There’s a growing realisation that financial wellbeing also demands attention. The pandemic is taking its toll - either directly or indirectly - on financial health as well as physical and psychological health. Consequently, advice and education with regard to pensions, moving money and exchange rate issues are all highly relevant.4 From generic to bespoke Finally, wellbeing extends to the very structure of the assignment, which are expected to become more bespoke than ever before and assessed on a case-by-case basis. 74% of HR and global mobility professionals say their top priority when borders reopen is ‘improving decision making to determine critical move requirements’.4 The new complexities and variables involved, necessitate the need to be more strategic with regards to who gets which type of assignment and what the support package looks like. All of this will necessitate the need for global mobility teams to work with different departments and to only partner with those providers that have the agility, flexibility and adaptability to think beyond industry established practice, helping you plan your future with confidence. Sources Santa Fe Relocation, Repurpose – Challenging Change, 2020/21 Gartner for Sales, The Future of Sales – Transformational Strategies for B2B Sales Organisations, 2020 Worldwide Broker Network, Wellbeing in 2021 – Global mobility’s next big challenge, Dec 2020 Crown World Mobility, Covid-19 Live Benchmarking session – preparing for post crisis employee mobility, Aug 2020 …

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16 March 2021Zoom Work Relationships Are Hard to Build – Unless You Can Pick Up on Colleagues’ Nonverbal Cues

The big idea Workers who communicate with their colleagues mainly through videoconferencing are far less effective at building relationships than when the communication is done face to face, according to a study we recently completed and just submitted for peer review. We also found two important ways employees can overcome the downside of video meetings. Workers in our study reported a sharp deterioration in their work relationships after more of their communications were done via videoconferencing during the pandemic, which our analysis suggested made the employees three times less effective at building relationships. Participants reported that it was harder to understand their coworkers’ nonverbal cues and to listen intently to what others were saying during virtual meetings compared with their in-person communications. Without these two crucial elements, the positive effects of relationship-building – such as coordination and efficiency – were tough to establish. Looking at the data more closely, we found that those who reported that they focused on nonverbal communication cues from their colleagues or said they tried harder to listen attentively were less likely to see any change in the quality of their work relationships. In fact, we found that when these two communication behaviors were present, video calls were comparable to meeting face to face in promoting team efficiency and even more effective in coordinating team activities. Why it matters Relationship-building is known to be key to improving team outcomes – and even more important when employees are communicating over video. But it’s also more difficult. But since the COVID-19 pandemic began in the spring, when about 79% of those polled by Gallop said they were at least sometimes working from home, many companies and workers have complained about the drawbacks of remote work, such as declines in innovation and a lack of social connection. While more people have returned to the office since the spring, almost 60% of U.S. workers said they were still telecommuting part time or full time in September. Given that about two-thirds of workers say they’d like to continue working remotely at least some of the time after the pandemic ends, there’s a clear need to find ways to make it better. Our findings suggest companies and workers could offset some of the downsides, which could pay dividends in the post-pandemic world. What still isn’t known Our findings are based on a survey of employees in the U.S., where workplace communication norms are often direct, meaning that people tend to use explicit verbal messages. U.S.-based results don’t easily apply to other cultures, such as those with communication styles that are indirect and relational. How we did our work Through Amazon’s Mechanical Turk platform, which researchers like us use to recruit participants from around the world, we surveyed 324 American working adults who, before the pandemic, conducted the vast majority of their meetings in person and now use videoconferencing for a substantial share of them. We asked them about their work relationships, their communication behaviors when working in person and over the web and their work unit’s performance now compared with before the pandemic, and used a form of statistical analysis to reveal patterns. We conducted the research with the help of Ye Zhang, who just received her doctorate from Peking University, as well as Jeff Russell, managing director of InterCulturalEdge, which the four of us co-founded in …

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16 March 2021Predicting Severe COVID Big data can help doctors predict which COVID patients will become seriously ill

The pandemic continues to pose huge challenges to health services worldwide. Hospitals are in crisis as the pace of new COVID-19 cases outstrips their capacity. What makes things particularly difficult is that the coronavirus doesn’t affect everyone in the same way. Being able to better predict which patients will get seriously ill would allow hospitals to use their stretched resources more effectively. Armed with such information, hospitals could stop admitting patients who are at low risk of deteriorating and avoid administering unnecessary treatments. And for patients at high risk, this information could guide doctors on how and when to treat them. Researchers have been racing to develop “prediction models” for this very purpose since the start of the pandemic. Prediction models are created by learning from previous patients, and they need to be fed a lot of data. Early models were found to be inadequate for clinical use, mainly because they didn’t include enough data to capture the variety of scenarios that occur among different patients and across different settings. But there is a study – called ISARIC4C – that is collecting data on patients with COVID-19 from over 250 hospitals across the UK. We believed that this could be a powerful platform for addressing this problem. So, working with colleagues from across the UK, we set about creating a prediction model using ISARIC4C’s data that would be good enough to be used clinically. Using big data to improve care We used ISARIC4C data from approximately 75,000 patients across England, Scotland, and Wales to develop our prediction tool, which we called the 4C deterioration model. It’s designed to predict the risk of an adult hospitalised with COVID-19 requiring breathing support, needing intensive care or dying during their hospital stay. The model requires only routinely collected information. It needs to know the person’s age and sex, whether they developed their infection inside or outside hospital, their bedside assessments – such as oxygen level, rate of breathing and consciousness level – and a selection of common blood tests and chest X-ray findings. These eleven data inputs (or “predictors”) were included based on previous reports of them being associated with severe COVID-19 together with evidence from the ISARIC4C study associating them with deterioration. A patient’s predictors are combined together in the 4C deterioration model using an equation, which then provides the percentage likelihood of that patient’s condition worsening. The predictors aren’t equal but are weighted according to their association with deterioration. For example, the strongest predictor in the model is blood oxygen level (measured using a finger probe). This is because a reduction in oxygen levels is the main mechanism through which COVID-19 causes critical illness. We tested the accuracy of the predictions in hospitalised COVID-19 patients across nine NHS regions in England, Scotland, and Wales. Our analyses showed that the model’s predictions closely matched the observed outcomes of patients. For example, using a measure called a “calibration slope” to see how well predictions matched up with real outcomes, the model scored 0.96 compared with a perfect score of 1. These results offered encouraging evidence that the model could usefully guide medical decision making in all regions. How doctors can use the tool We made the 4C deterioration model available to doctors as an online risk calculator in January 2020. It’s available alongside our 4C mortality score, a model we made previously that predicts risk of death in COVID-19 patients, and which has been recommended by NHS England to help guide antiviral treatment. Since age is a very strong predictor of whether a COVID-19 patient will die, we recommend using both models in parallel to ensure that risk isn’t underestimated among younger patients. Young people with COVID-19 can be at low risk of death but high risk of deterioration – a fact not picked up by the 4C mortality score on its own. These prediction tools are intended to allow inherently subjective medical decision making – which may vary considerably between clinicians – to be more objective and evidence-based, particularly during challenging circumstances when resources are stretched. Predictions may be used to support discussions of prognosis with patients and families, estimate demand for resources, and inform decisions regarding keeping patients in hospital or admitting them to critical care. Future clinical trials could also evaluate whether the tools might be useful for directing treatments with specific drugs (such as antivirals and immune modulators) towards patients who are most likely to benefit. The tools could even be used to analyse data from clinical trials that have already been run, to see if they can distinguish between patients who did and did not respond to treatment. Importantly, the ISARIC4C study is ongoing. This means that we can continue to evaluate how the prediction tools are performing in recent groups of patients – and this will allow us to optimise them if required in the future. In addition, making the models freely available will allow researchers and policymakers worldwide to test how well our models work in their own …

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15 March 2021Issue 056,
March 2021

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16 January 2021Interview Mattieu Rouot – MAXIS GBN, Chief Executive Officer

As CEO of MAXIS GBN, Mattieu Rouot oversees relationships with more than 500 multinational companies in over 120 countries around the world. Global Benefits Vision: Mattieu, thank you for speaking to us - Can you share a few highlights of your career, perhaps with emphasis on global employee benefits? Mattieu Rouot: I have been working in the employee benefits industry for the last seven years and I was heavily involved in the launch of the new MAXIS Global Benefits Network joint venture between AXA and MetLife in 2016. MAXIS GBN was co-founded in 1998 by MetLife and AXA with some teams seconded from each of the shareholders to work on the shared business. We realized the value that MAXIS GBN could have in the market and could provide to both AXA and MetLife and recognized we could further extend the relationship, and merge resources in order to have a single team and a single customer proposition. In other words, “One MAXIS” was required. This is what we implemented in 2016 with the joint venture and we have continued strongly since. MAXIS GBN is proving to be extremely successful and is now a leader in the global employee benefits market. In 2016, among other responsibilities, I was overseeing the MAXIS GBN business from AXA’s side and was convinced that the strategy to create the new MAXIS GBN was the right one. Of course, there were some doubts externally about whether the partnership would work, but I’m very pleased with how the partnership has developed over the years. It was definitely the right decision to make. In the last four years – the first four years of the new MAXIS GBN – Mauro Dugulin did a fantastic job of leading MAXIS GBN to the position we are in today. Earlier in my career, I spent approximately 20 years at AXA in various roles. Among those, Head of Investors Relations for the AXA Group was a real highlight because it led me to realize how complex the insurance world is for outsiders who are not specialists. Simply speaking, my job was to convince investors, my clients at that time, to buy the AXA stock and for that, you need to explain your business. I needed to be simple and straightforward, easy to do business with. In a word, understandable. And this is relevant in any context, in any business, and obviously in the EB space as well: if you want to be trusted by your clients, you need to be simple to do business with, you can’t afford to impose your own complexity to your clients. You see, it’s quite a simple story… GBV: What’s your overall vision for MAXIS GBN? MR: Our vision at MAXIS GBN is to play a vital role in the delivery of health and financial security to employees and their families, wherever they are. We strive to be the most trusted, collaborative and innovative partner, providing data-driven, sustainable solutions. Finally, we assist multinational corporations in shaping local employee benefits offerings by enabling a global approach. GBV: And what is your strategy to get there? MR: Part of my job in the last six months since I became CEO of MAXIS GBN has consisted of talking to our team members, network members, brokers, consultants, clients and our shareholders. Because of COVID-19, this was, of course, all done virtually, without travelling. Looking back, I’ve been able to meet with far more people than if I had travelled. So, the first component of the strategy is listening, hearing what our stakeholders have to say. As it turns out, our strategy in the prior years was the right one. Therefore, we shall remain on a path of continuity, rather than disruption. We are leaders in our chosen markets which are expanding and we are therefore looking to continue growing sustainably. One of our biggest differentiators is our strong network of insurers – in that respect, AXA and MetLife complement each other very well as they have strength in different regions. Our focus on health and wellness, which is now often seen as a driver of corporate performance, is another important part of the value we offer to multinational clients. And, of course, I think we have a great team of EB professionals that are dedicated, agile, responsive and responsible. Without them we couldn’t achieve our goals. We will continue building on our strengths and leverage our position, to diversify and stay on top of innovation. GBV: How do you attract, train, retain talent for your operations? MR: MAXIS GBN is a complex ecosystem and that requires people who are experts at what they do and are great at cooperating at the same time. Our team of more than 120 employees globally is diverse and inclusive – in our London office alone we have over 30 countries represented in our team of around 70. The diverse team and the fact that we have been willing to hire from outside the industry has helped us to foster and build a culture of innovation. This HR strategy allows us to run a lean organization around our three core values: accountability, collaboration and creativity. It also is an attractive proposition for our employees, who enjoy internal mobility opportunities both inside MAXIS GBN and with AXA and MetLife, respectively. GBV: Can you comment on COVID-19, its impact on internal operations; on distribution; on clients, risks and coverages? MR: Well, first of all, I’ve not yet had a chance to meet the MAXIS team face to face yet, and that’s something I can’t wait to do. That being said, in general, we’ve been able to adapt quickly to having our entire team working from home. In terms of internal collaboration, we already had regional offices all over the world, so our people are used to not being in the same office as each other. Our IT systems are cloud-based and remote-access-enabled, so we didn’t miss a beat there. From an HR standpoint, we monitor and abide by all local rules, which is a challenge; on top of these rules, we provide support and an employee assistance program to our staff. We are now preparing for a return to the office on a rotation basis, of course if local government policies allow us to do so. Funnily enough, we have been working with our clients to help them through the same situation with their employees. Clients wanted to understand what coverages they had in every country, possible exclusions, and so on. This is where global benefits management comes into its own. And where coverage turns out to be inadequate, captives are a very useful tool. As the ultimate risk bearer, a captive can choose to remove local exclusions or amend local terms and conditions. Other products in high demand include health and wellness apps, to help employees stay healthy, as well as global employee assistance programs and telehealth. In the end, COVID-19 is driving both a change in perception by clients, and a high degree of employee engagement. I think it’s fair to say the COVID-19 pandemic demonstrated that employee benefits are vitally important. GBV: What do you regard as the main challenges in the global employee benefits industry? MR: Challenge #1 is the rising cost of healthcare across the world – well above the rate of inflation in lots of countries. As a result, providing healthcare to employees becomes expensive for multinationals. At the same time, employers have a ‘duty of care’ to their employees and need to provide medical coverage to ensure their people are healthy and productive. In the end, there is a tension between more demand on one hand and cost containment on the other hand. But it is not necessarily a contradiction, as employers can focus on prevention. We are moving away from just paying invoices to being health partners; ‘moving from cure to care’, as we like to say. Hence the incorporation of health and wellness into an integrated EB approach. We operate in two distinct steps. First, a diagnostic phase. We collect medical claims data and perform in-depth analyses to identify the biggest medical cost drivers an employer is facing. This helps them understand the areas of focus for wellness initiatives that will have the biggest impact. The second step is prescriptive; we help employers tackle these cost drivers with our MAXIS Global Wellness Solutions that include a marketplace of third-party providers who can roll out global telemedicine, EAPs, chronic disease management and other wellness solutions. We also provide health and wellness toolkits, off-the-shelf educational campaigns for diabetes and other conditions. GBV: After several false starts, EB captives appear to have taken off in the past two or three years. What has changed that explains this fact? MR: Captives today are mostly property & casualty risk management tools. Depending on what sources you use, there are around 7,000 captives in existence globally, and only just over 100 of them write employee benefits business, so there is a lot of potential for growth there. Why are there so few EB captive programmes? Traditionally, employee benefits belong to human resources whereas P&C insurance is handled by risk managers. But that is changing. Gradually, people from finance and risk departments are looking at employee benefits and find it is a very manageable risk. Nevertheless, the difficulty is in breaking silos and in the need to understand these risks at a deep level. All of that takes some time. Typically, clients would start with multinational pooling, learn, and then graduate to captives. In addition, a captive requires a degree of centralized control of employee benefits that only the multinationals with the most mature EB programs have. Furthermore, risks are not homogeneous from country to country. Nevertheless, captives are very promising and offer many advantages, transparency of employee benefits being but one of them… We always say that a captive is the ultimate way to manage EB risks. GBV: Traditional long-term employment contracts seem to give way to contractor-like short-term arrangements. What is the impact on employee benefits? MR: Going forward, we want to offer solutions for people outside of traditional full-time, permanent contracts. In 2018, MAXIS GBN set up a Data & Digital Innovation Lab to develop new solutions and one of its focuses is around the gig economy, in order to help our clients who work with contractors. GBV: How do you see the Employee Benefits industry changing in the next few years? MR: First, I don’t think we will see any new global networks arising, but perhaps regional ones in Africa and Asia. More importantly, the complex ecosystem of employee benefits provision around the world will further simplify with better technology helping much faster manipulation of data. GBV: What will you focus on at MAXIS GBN and in the industry in general, in the immediate future? MR: I have two key objectives for the next 12-months. First, nurture long-term client relationships. Insurance is a long-term business and global EB programs have a very long average lifespan. Let us keep it that way. Second, as the new CEO, I must make sure that we have the right strategy; that we select the right initiatives with full team engagement; and continue to receive the full support of AXA and MetLife. In a nutshell, my job is to facilitate the full alignment of all internal and external players. GBV: Many thanks Mattieu for your insights and all the best as 2021 in now well under …

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16 January 2021Severe COVID May Be Caused by Autoantibodies

Severe COVID May Be Caused by Autoantibodies - Here is what that means Whether or not a person with COVID-19 develops severe disease depends a lot on how their immune system reacts to the coronavirus. But scientists still don’t know why some people develop severe disease while others suffer only mild symptoms – or no symptoms at all. Now, a new study from Yale University sheds some light on the issue. The research, which has yet to be peer reviewed and published in a journal, suggests that in patients with severe COVID, the body produces “autoantibodies”. These are antibodies that – instead of attacking the invading virus – attack the patient’s own immune system and organs. The researchers found that people with severe COVID had autoantibodies that latched onto crucial proteins involved in recognising, alerting and clearing cells infected with the coronavirus. These proteins include cytokines and chemokines – important messengers in the immune system. This interfered with the normal immune system function, blocking antiviral defences, potentially making the disease more severe. Links with autoimmune disorders For many years, autoantibodies have been known to be involved in autoimmune diseases, such as rheumatoid arthritis and lupus. It is not known why some people develop these antibodies, but it is likely to be a combination of genetics and environment. Viral infections have also been linked to the onset of some autoimmune diseases. Earlier this year, scientists reported that patients with no history of autoimmune disease developed autoantibodies after getting COVID. In these studies, the autoantibodies were found to recognise similar targets to those found in other well-known autoimmune diseases, such as proteins normally found in the nucleus of cells. Later studies discovered that people with severe COVID can also develop autoantibodies to interferons, immune proteins that play a major role in fighting viral infections. The Yale scientists who carried out the latest study, used a new technique that screened for autoantibodies that work against thousands of the body’s proteins. They searched for autoantibodies in 170 hospitalised patients and compared them with autoantibodies found in people who suffered mild illness or asymptomatic infection, as well as people who had not been infected with the virus. In the blood of the hospitalised patients, they found autoantibodies that could attack interferons, as well as autoantibodies that could interfere with other critical cells of the immune system such as natural killer cells and T cells. The findings showed that auto-antibodies were a very common feature of severely ill COVID patients. The Yale researchers conducted further tests in mice, which showed that the presence of these autoantibodies could make the disease worse, suggesting that these autoantibodies could contribute to the severity of COVID in humans. Not the whole story Though COVID patients had many autoanti-bodies that targeted immune system proteins, the researchers didn’t find any COVID-specific autoantibodies that could be used to distinguish severely ill COVID patients. What determines if a person is going to suffer from severe COVID depends on many things, and autoantibodies are not the whole story. But the research suggests that people with existing autoantibodies may be at higher risk of getting severe COVID. These people may have deficiencies in their immune response during early coronavirus infection or be predisposed to making new autoantibodies that could hinder their immune response to the virus. Researchers are increasingly focusing on the link between severe COVID and misdirected immune responses that target healthy tissues and proteins in the body. The presence of autoantibodies suggests that, for some patients, COVID could be an autoimmune disease triggered by the coronavirus. Understanding what drives the production of autoantibodies will help scientists to develop new treatments for this disease. Scientists don’t know how long these autoantibodies last for after the infection has cleared. An important unanswered question is whether long-term damage caused by autoantibodies could explain some symptoms of long …

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16 January 2021Outsmarting COVID-19 Fears… and Boost Your Mood

After a year of toxic stress ignited by so much fear and uncertainty, now is a good time to reset, pay attention to your mental health and develop some healthy ways to manage the pressures going forward. Brain science has led to some drug-free techniques that you can put to use right now. I am health psychologist who developed a method that harnesses our rip-roaring emotions to rapidly switch off stress and activate positive emotions instead. This technique from emotional brain training is not perfect for everyone, but it can help many people break free of stress when they get stuck on negative thoughts. Why the stress response is so hard to turn off Three key things make it hard to turn off stress-activated negative emotions: First, our genes make us worrywarts. Our hunter-gatherer ancestors survived by assuming every rustle in the grasses was a lurking hungry lion, not harmless birds hunting for seeds. We’re essentially programmed to be hyperaware of threats, and our brains rapidly launch stress chemicals and negative emotions in response. Second, the chemical cascade of stress hormones in the brain associated with negative emotions impairs cognitive flexibility, goal-directed behavior and self-control. Third, our tendency to avoid dealing with negative emotions puts people in a perpetual cycle of ignoring unpleasant feelings, which amplifies stress and the risk of emotional health problems. Traditional approaches for coping with stress were based on cognitive-behavioral therapy, which focuses on modifying patterns of thinking and behavior. It was developed before our modern understanding of stress overload. Researchers at New York University discovered a paradox: Although cognitive methods were effective in low-stress situations, they were less effective when dealing with the high stress of modern life. Emotional brain training works with these high-stress emotions in an effort to tame them, releasing negative emotions as the first of two steps in preventing stress overload. Step 1: Release negative emotions The only negative emotion in the brain that supports taking action rather than avoidance and passivity is anger. Studies have shown that the suppression of anger is associated with depression and that suppressing anger doesn’t reduce the emotion. Healthy release of anger instead has been found to reduce other stress-related health risks. Our technique is to switch off stress overload by using a controlled burst of anger to help the brain exert better emotional control and allow emotions to flow rather than become chronic and toxic. After that first short burst, other feelings can flow, starting with sadness to grieve the loss of safety, then fear and regret, or what we would do differently next time. You can talk yourself through the stages. To experiment with the process, use these simple phrases to express the negative feelings and release your stress: “I feel angry that …”; “I feel sad that …”; “I feel afraid that …”; and “I feel guilty that …” Step 2. Express positive emotions After releasing negative emotions, positive emotions can naturally arise. Express these feelings using the same approach: “I feel grateful that …”; “I feel happy that …”; “I feel secure that …”; and “I feel proud that …” Your mindset can quickly change, a phenomenon that has many potential explanations. One explanation is that in positive states, your brain’s neural circuits that store memories from when you were in the same positive state in the past can be spontaneously activated. Another is that the switch from negative to positive emotions quiets your sympathetic nervous system – which triggers the fight-or-flight response – and activates the parasympathetic system, which acts more like a brake on strong emotions. Here’s what the whole stress relief process might look like like for me right now: I feel angry that we’re all isolated and I can’t see my new grandson Henry. I hate it that everything is so messed up! I HATE THAT!!! I feel sad that I am alone right now. I feel afraid that this will never end. I feel guilty that I am complaining! I am lucky to be alive and have shelter and love in my life. Then the positive: I feel grateful that my daughter-in-law sends me photos of Henry. I feel happy that my husband and I laughed together this morning. I feel secure that this will eventually pass. I feel proud that I am doing the best I can to cope. After a daunting year, and with more challenges ahead in 2021, upgrading your approach to emotions can be a drug-free mood booster. Our COVID-19 fears need not consume us. We can outsmart the brain’s fear response and find moments that sparkle with …

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16 January 2021Long COVID – Who Is at Risk

For most people, infection with SARS-CoV-2 – the virus that causes COVID-19 – leads to mild, short-term symptoms, acute respiratory illness, or possibly no symptoms at all. But some people have long-lasting symptoms after their infection – this has been dubbed “long COVID”. Scientists are still researching long COVID. It’s not well understood, though our knowledge about it is growing. Here I take a look at what we’ve learned about it so far – who is at risk, how common it is and what its effects are. In defining who is at risk from long COVID and the mechanisms involved, we may reveal suitable treatments to be tried – or whether steps taken early in the course of the illness might ameliorate it. Broad vulnerability Long COVID is characterised by a constellation of symptoms, including – variably – shortness of breath, marked fatigue, headache, and loss of ability to taste and smell normally. A relatively large study of 384 individuals ill enough to be admitted to hospital with COVID-19 showed that 53% remained breathless at a follow-up assessment one to two months later, with 34% having a cough and 69% reporting fatigue. Indeed, early analysis of self-reported data submitted through the COVID Symptom Study app suggests that 13% of people who experience COVID-19 symptoms have them for more than 28 days, while 4% have symptoms after more than 56 days. Perhaps unsurprisingly, people with more severe disease initially – characterised by more than five symptoms – seem to be at increased risk of long COVID. Older age and being female also appear to be risk factors for having prolonged symptoms, as is having a higher body mass index. Those using the app tend to be at the fitter end of the population, with an interest in health matters. So it is surprising that such a high proportion have symptoms one to two months after the initial infection. Generally, these aren’t people who are highly vulnerable to COVID-19. Another piece of early research (awaiting peer review) suggests that SARS-CoV-2 could also have a long-term impact on people’s organs. But the profile of those affected in this study is different to those reporting symptoms via the app. This research, which looked at a sample of 200 patients who had recovered from COVID-19, found mild organ impairment in 32% of people’s hearts, 33% of people’s lungs and 12% of people’s kidneys. Multiple organ damage was found in 25% of patients. Patients in this study had a mean age of 44 years, so were very much part of the young, working-age population. Only 18% had been hospitalised with COVID-19, meaning organ damage may occur even after a non-severe infection. Having a disease known to lead to more severe COVID-19, such as type 2 diabetes and ischaemic heart disease, wasn’t a prerequisite for organ damage either. Finding out what’s going on There are many reasons why people may have symptoms months after a viral illness during a pandemic. But getting to the bottom of what’s going on inside people will be easier for some parts of the body than others. Where symptoms point to a specific organ, investigating is relatively straightforward. Clinicians can examine the electrical flow around the heart if someone is suffering palpitations. Or they can study lung function – tissue elasticity and gas exchange – where shortness of breath is the predominant symptom. To determine whether kidney function has deteriorated, components in a patient’s blood plasma are compared to those in their urine to measure how well the kidneys are filtering waste products. Rather harder to explore is the symptom of fatigue. Another recent large-scale study has shown that this symptom is common after COVID-19 – occurring in more than half of cases – and appears unrelated to the severity of the early illness. What’s more, tests showed that the people examined didn’t have elevated levels of inflammation, suggesting that their fatigue wasn’t caused by continued infection or their immune system working overtime. Risk factors for long-lasting symptoms in this study included being female – in keeping with the COVID Symptom App study – and, interestingly, having a previous diagnosis of anxiety and depression. While men are at increased risk of severe infection, that women seem to be more affected by long COVID may reflect their different or changing hormone status. The ACE2 receptor that SARS-CoV-2 uses to infect the body is present not only on the surface of respiratory cells, but also on the cells of many organs that produce hormones, including the thyroid, adrenal gland and ovaries. Some symptoms of long COVID overlap with menopausal symptoms, and hormone replacement using medication may be one route to reducing the impact of symptoms. However, clinical trials will be essential to accurately determining whether this approach is both safe and effective. Applications to launch such research have been made. With so much having happened over the last year, we will need to tease apart which impacts stem from the virus itself versus which might be the consequence of the massive social disruption wrought by this pandemic. What is clear, however, is that long-term symptoms after COVID-19 are common, and that research into the causes and treatments of long COVID will likely be needed long after the outbreak itself has …

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14 January 2021Issue 055,
January 2021

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16 December 2020Learning to cope with uncertainty during COVID-19

Over the past nine months, the word “uncertainty” has cropped up time and time again across the news and social media worldwide. The pandemic has created uncertainty in nearly every aspect of daily life. This is not only down to worries over exposure to COVID-19 and access to medical care, but also concerns about the stability of the economy, job security, the availability of food and household supplies – and even when to book a holiday. We have needed to adjust and readjust our behaviour continually in response to changing risks and government guidelines. My research focuses on “intolerance of uncertainty” – when uncertainty leads to high levels of distress. Recent research has highlighted that intolerance of uncertainty is likely to play a key role in our mental health as we cope with the pandemic. Understanding how we respond to uncertainty may help us alleviate some of the mental strain of the pandemic. Uncertainty makes it difficult for us to predict what decisions to make and how to act. For this reason, it is common to find uncertainty upsetting, confusing and frustrating. But some people tend to find uncertainty particularly distressing and challenging to cope with. They worry excessively over what will happen, as well as avoid situations with uncertainty. Ultimately, this distress makes good outcomes less pleasurable and bad outcomes more stressful. Intolerance of uncertainty can be found within many different mental health issues. These include anxiety, mood, post-traumatic stress, eating and obsessive-compulsive disorders. The pandemic has introduced an unexpected new level of uncertainty into all our lives. The obvious downside is that uncertainty on such a mass scale will likely lead to greater, more intense and generalised uncertainty distress in people with preexisting mental health conditions. It may also generate further new cases in people who are vulnerable or at risk of developing mental health conditions due to their circumstances. People are now relying on mental health services more than ever. It is likely that this increased demand on mental health services will continue over the next couple of years at the very least. Learning to cope But the pandemic has presented an opportunity to raise awareness of uncertainty distress and how to best cope with it in the general population. Experimental research suggests that individuals with higher self-reported intolerance of uncertainty may benefit from clearer safety information and more experience of uncertainty. It’s important to learn that uncertainty doesn’t always mean that something bad will happen – and it’s possible that current psychological therapies that aim to change core beliefs could be modified to target uncertainty distress. So how do we apply this research to our experiences of uncertainty during the COVID-19 pandemic and beyond? Uncertainty is a complex beast and may manifest itself in many different ways – but there are some things we can do to manage it. Mental health professionals have suggested a number of different steps that can help. First and foremost, we can recognise that uncertainty is an inevitable part of life and we should take the time to acknowledge how it makes us feel. Secondly, we can think about whether minimising uncertainty is a realistic or useful goal. For example, in relation to the pandemic, we can reduce some uncertainty related to COVID-19 transmission by following the government guidelines as best we can – while recognising that there are other aspects that are out of our control. We can also challenge our uncertainty tolerance by expanding our comfort zone at our own pace. For instance, you could try ordering food from a new restaurant or watch a film that you know nothing about. Encouragingly, the pandemic has spurred researchers and mental health professionals to band together in exploring potential solutions for uncertainty distress management. At this stage, it is hard to measure what the impact of sustained uncertainty on such a global scale will be. For instance, we may end up with a global generation of people who are accepting of uncertainty – or who find uncertainty intolerable. For now, we will just have to monitor the situation, apply what strategies we can and prepare ourselves for the endless outcomes and …

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16 December 2020Mathematical modeling of tumors – How mathematics can help us understand tumor growth?

In our daily life, we unfortunately have become used to seeing images of tumors and melanomas. You may have noticed that they’re are not entirely symmetric. This asymmetry is useful to doctors in their diagnoses, but why are they asymmetric? Instinctively, we think that symmetric objects are most often found in nature, but perhaps assymetry is even more common. To complicate things, the same object may sometimes be symmetric and sometimes not. Take soap bubbles for example. When they are small, they seem perfectly symmetric, but when we increase their radius, we see that symmetry is broken: the soap bubble is not perfectly round anymore. This phenomenon is due to the presence of physical effects such as wind and gravity. Therefore, we may affirm that the final shape of the soap bubble is caused by several factors, and the effect of each of those cannot be ignored. The same happens for cancer growth: the asymmetric shape is due to different biological phenomena. To understand what those phenomena are is still at the center of ongoing research in biology and medicine. Mathematics may give a valuable insight on different aspects of tumor growth. By constructing mathematical models and investigating their solutions, we distinguish between various possible aspects in the mechanisms of tumor growth. This may be useful in developing effective treatments and providing biologists and doctors with complementary information. Can we model how a tumor grows? The shape of a tumor is the result of several interactions between tumor cells, healthy cells, molecules and other tissues. To mathematically describe its evolution from a global point of view, one can use a “diffusion equation”. Diffusion equations are good mathematical tools in such a context because they allow to describe the global effects of a physical process which takes place on a much smaller scale. In general, the process at small scale is diffusion: a net movement of any object (for instance atoms or molecules) from a region of high concentration to a region of lower concentration. One example of such behavior can be the evolution of the temperature (or heat) in a room. We know, by experience, that if we heat one small part of our room, soon the heat will spread over to the rest of it. Nowadays we know that this thermal equilibrium is reached because the atoms and molecules composing the air are moving randomly and disorderly. This motion, called Brownian motion, is named after Robert Brown, an English botanist who first described it in 1827 while observing the movement of pollen particles in water. Interestingly, diffusion equations in mathematics were already studied independently since 1822, when Joseph Fourier introduced his landmark heat equation. However, the connection between the small scale (Brownian motion) and the global effect of thermal equilibrium was only pointed out by Albert Einstein and Marian Smoluchowski in 1905. Different types of diffusion and different models Einstein described a particular type of diffusion, nowadays called the “linear diffusion”. It is characterized by its “mean squared displacement”, an average of how much the particles move in time. The “mean squared displacement” is linear in time, meaning that, on average, if we wait 5 units in time, the particles will move of √5 units in space. The linearity here is between the quantity of time and the square of the quantity of space. This is not the only possible diffusion and other types have been used and studied, their classification often depending on this notion of “mean squared displacement”. For instance, in the “superdiffusion”, the particles are allowed to “make jumps” (nowadays called Lévy walks) and so to move more in space. This behavior is not only common for molecules but has been observed in animals. For example, it describes well the the foraging strategies of an Albatros. We may notice the differences between the trajectories of a Brownian motion and those of the albatros. In the former the particle stays close to its initial position while in the latter the albatros makes long movements (Lévy jumps). One of the main advantages in mathematics is that, often, similar techniques and concepts can be adapted to describe different situations in nature. This is the case of parabolic equations, which are a generalization of the above diffusion equations, and are used to model a big variety of phenomena such as the oscillation of prices of the stock market or the evolution of a material undergoing a phase transition, for example the melting of ice into water. The common feature in the phenomena described by parabolic equations is always the description of a global effect arising from a process on a smaller scale. The shape of a tumor Assuming that every cell is (more or less) moving randomly we may describe the evolution of the cell density in space (number of cells per volume unit) by a diffusion equation. However, we will not obtain an asymmetric evolution by considering only the cell density. Indeed, a feature of diffusion equations is exactly to make the evolution more symmetric, in an effect similar to the thermal equilibrium explained above. To obtain asymmetries, we need more elements in the model, but which effect has to be added? This is when mathematics can be useful to biology as we mathematicians can test hypotheses. Indeed, by adding different elements to the model, we can simulate different aspects of the tumor growth and better understand its mechanisms. Such elements may be, for instance, the presence of nutrient (generally oxygen or glucose brought by blood vessels), which presence is again modeled by a diffusion equation describing how the tumor consumes the nutrients, or the presence of an external pressure applied by other tissues, for example an organ by one side of a tumor. By including these features in the model, we can obtain shapes as those in the above figure, closer to what we see in the real …

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16 December 2020mRNA Vaccines Against COVID-19

How mRNA vaccines from Pfizer and Moderna work, why they’re a breakthrough and why they need to be kept so cold? As the weather cools, the number of infections of the COVID-19 pandemic are rising sharply. Hamstrung by pandemic fatigue, economic constraints and political discord, public health officials have struggled to control the surging pandemic. But now, a rush of interim analyses from pharmaceutical companies Moderna and Pfizer/BioNTech have spurred optimism that a novel type of vaccine made from messenger RNA, known as mRNA, can offer high levels of protection by preventing COVID-19 among people who are vaccinated. Although unpublished, these preliminary reports have exceeded the expectations of many vaccine experts, including mine. Until early this year, I worked on developing vaccine candidates against Zika and dengue. Now I am coordinating an international effort to collect reports on adult patients with current or previous cancers who have also been diagnosed with COVID-19. Promising preliminary results Moderna reported that during the phase 3 study of its vaccine candidate mRNA-1273, which enrolled 30,000 adult U.S. participants, just five of the 95 COVID-19 cases occurred among the vaccinated, while 90 infections were identified in the placebo group. This corresponds to an efficacy of 94.5%. None of the infected patients who received the vaccine developed severe COVID-19, while 11 (12%) of those who received the placebo did. Similarly, the Pfizer-BioNTech vaccine candidate, BNT162b2, was 90% effective in preventing infection during the phase 3 clinical trial, which enrolled 43,538 participants, with 30% in U.S. and 42% abroad; How does mRNA vaccine work? Vaccines train the immune system to recognize the disease-causing part of a virus. Vaccines traditionally contain either weakened viruses or purified signature proteins of the virus. But an mRNA vaccine is different, because rather than having the viral protein injected, a person receives genetic material – mRNA – that encodes the viral protein. When these genetic instructions are injected into the upper arm, the muscle cells translate them to make the viral protein directly in the body. This approach mimics what the SARS-CoV-2 does in nature – but the vaccine mRNA codes only for the critical fragment of the viral protein. This gives the immune system a preview of what the real virus looks like without causing disease. This preview gives the immune system time to design powerful antibodies that can neutralize the real virus if the individual is ever infected. While this synthetic mRNA is genetic material, it cannot be transmitted to the next generation. After an mRNA injection, this molecule guides the protein production inside the muscle cells, which reaches peak levels for 24 to 48 hours and can last for a few more days. Why is making an mRNA vaccine so fast? Traditional vaccine development, although well studied, is very time-consuming and cannot respond instantaneously against novel pandemics such as COVID-19. For example, for seasonal flu, it takes roughly six months from identification of the circulating influenza virus strain to produce a vaccine. The candidate flu vaccine virus is grown for about three weeks to produce a hybrid virus, which is less dangerous and better able to grow in hens’ eggs. The hybrid virus is then injected into a lot of fertilized eggs and incubated for several days to make more copies. Then the fluid containing virus is harvested from eggs, the vaccine viruses are killed, and the viral proteins are purified over several days. The mRNA vaccines can leapfrog the hurdles of developing traditional vaccines such as producing noninfectious viruses, or producing viral proteins at medically demanding levels of purity. MRNA vaccines eliminate much of the manufacturing process because rather than having viral proteins injected, the human body uses the instructions to manufacture viral proteins itself. Also, mRNA molecules are far simpler than proteins. For vaccines, mRNA is manufactured by chemical rather than biological synthesis, so it is much quicker than conventional vaccines to be redesigned, scaled up and mass-produced. In fact, within days of the genetic code of the SARS-CoV-2 virus becoming available, the mRNA code for a candidate vaccine testing was ready. What’s most attractive is that once the mRNA vaccine tools become viable, mRNA can be quickly tailored for other future pandemics. What are problems with mRNA? MRNA technology isn’t new. It was shown a while back that when synthetic mRNA is injected into an animal, the cells can produce a desired protein. But the progress remained slow. That’s because mRNA is not only notoriously unstable and easy to degrade into smaller components, it is also easily destroyed by the human body’s immune defenses, which make delivering it to the target very inefficient. But beginning in 2005, researchers figured out how to stabilize mRNA and package it into small particles to deliver it as a vaccine. The mRNA COVID-19 vaccines are expected to be the first using this technology to be approved by the FDA. After a decade of work, the mRNA vaccines are now ready for evaluation. Physicians will be watching for unintended immune reactions, which can be both helpful and detrimental. Why keep mRNA supercold? The most important challenge for development of a mRNA vaccine remains its inherent instability, because it is more likely to break apart above freezing temperatures. Modification of the mRNA building blocks and development of the particles that can cocoon it relatively safely have helped the mRNA vaccine candidates. But this new class of vaccine still requires unprecedented freezer conditions for distribution and administration. What are the refrigeration requirements? The Pfizer-BioNTech mRNA vaccine will need to be optimally stored at minus 94 degrees Fahrenheit and will degrade in around five days at normal refrigeration temperatures of slightly above freezing. In contrast, Moderna claims its vaccine can be maintained at most home or medical freezer temperatures for up to six months for shipping and longer-term storage. Moderna also claims its vaccine can remain stable at standard refrigerated conditions, of 36 to 46 degrees Fahrenheit, for up to 30 days after thawing, within the six-month shelf life. Not surprisingly, Pfizer is also developing shipping containers using dry ice to address shipping …

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16 December 2020Interview Paolo Lippi

Global Benefits Vision: Tell us about yourself – your career to date in a nutshell. Paolo Lippi: I like to think my 30+ years of experience have ensured that I now can see pensions from all angles–a 360-degree view, if you like, from investment to risk management and pension management. So now I can provide my clients fully integrated support and analysis, understanding how one aspect impacts another and how to ensure the best possible outcomes, unrestrained by traditional structures. I started out as an Asset Manager for an international insurance company (French Stock Market). I used to manage SICAV and direct insurance portfolios (equities and bonds). SICAV (Société d'Investissement à Capital Variable) funds are the most well-known and used in France, Luxembourg and Italy. They represent the most common investment vehicle for unit-linked pension plans. In the 1990s, I was among the top 10% of SICAV performers. From there, I moved into risk management, setting up the internal risk management department for Generali Belgium. I led the development of its Solvency II internal model, improving the company’s solvency margin. However, this more “responsible” approach, to which all insurers had to adhere, had inevitable downsides, as I explain in my article in Global Benefits Vision¹. More latterly, I headed up a pension unit for more than 10 years. This involved helping multinational clients set up, coordinate and implement cross-border tax efficient pension solutions, including IORP (Institutions for Occupational Pension Funds) and asset pooling. Then, earlier this year, I had the opportunity to set up my own business, bringing together all the expertise I had gained through the years to help multinationals build cross-border pension solutions, reduce their costs, and improve the transparency and performance of their funds. GBV: Why LongueVue Analytics – What’s your mission? PL: It’s telling that there are more than 103,000 pension schemes in Europe, but only 73 are cross border. This is because the IORP directive causes many compliance and regulatory issues for employers, even in its recently revised version. Designed to set common standards and ensure the soundness of occupational pensions across Europe, the directive actually makes it particularly difficult to manage cross-border pension schemes that are either Defined Benefit (DB) or Defined Contribution (DC) with a guarantee. There is a solution, however: the implementation of new pension plans without guarantees (unit-linked) as part of an IORP arrangement. This is what I am proposing to bring to multinationals of all shapes and sizes via LongueVue Analytics. The intention is not to replace existing pensions, so there’s no need to abandon any pensions with a guarantee for those who still want them. Rather, LongueVue Analytics offers a solution that is more profitable for new employees and expatriates, and less expensive for employers. Of course, there will be an educational component directed at the unions, because unions don’t like the idea of investing in pension plans without guarantees. But I believe they will be convinced when they discover that abandoning guarantees makes it possible to improve the transparency and profitability of plans. My goal is to bring multinationals the transparency, portability and cost reductions they need. This is made possible because the maximum amount of expenses is decided by the employer, together with LongueVue Analytics. And the much simpler environment that an IORP creates obviates the need for the traditionally high number of consultancy hours. In short, the owner of the IORP is the employer, not LongueVue. LongueVue is there to provide the services the IORP needs. The employer always remains in control of the decision-making and costs. An IORP can be run for a third of the cost of a traditional pension with guarantees (DC and/or DB). To prove it, my article provides empirical calculations based on market data taken from the past 40 years. GBV: What is an IORP? PL: IORPs are financial entities that manage collective retirement schemes for employers, in order to provide benefits to employees. They benefit from the principles of free movement of capital and free provision of services in the EU. This means that: Pension funds in one EU country can manage occupational pension schemes for companies established in another EU country. Pan-EU companies can have a single pension fund for all subsidiaries throughout the EU. IORPs operating in the EU are regulated by Directive 2003/41/EC, also known as the IORP Directive. GBV: Why are you embarking on this venture now? PL: The global mobile workforce is huge and ever growing. Yet with regard to pensions, cross-border activity is disproportionately limited. Why? Because despite the European directive almost 20 years ago, cross-border pensions remain incredibly complex. If a multinational wants simplicity, the only option available right now is to abandon its pension with a guarantee. What’s more, the world has changed hugely since the directive was introduced. The low interest yield environment has killed guaranteed products. In short, old and traditional pension solutions are no longer optimal. There’s also the problem of traditional institutions charging up to 3% of annual costs. Depending on the market conditions, LongueVue will offer at the retirement day a lump sum between 40% and 62% higher than that of a traditional scheme, through lower fees. GBV: Is the LongueVue IORP available now? PL: We are in the process of launching to prospective clients right now. The IORP requires a collective reserve—in terms of investment from participating multinationals—to get started. We are looking for one or more multinational organizations willing to innovate in the area of employee benefits, specifically to put a new profitable pension solution in place. When we have a guarantee that we will reach assets under management of 30 million Euro, the project will become feasible. Multinationals that would like more information on this project can contact me …

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16 December 2020The European Pension System State of Play

Paolo Lippi Executive summary The role of compensation and benefits manager in charge of a company's pension plan has always required multiple skills. Not only must you know about the pension scheme itself, you also must be an honorary actuary and an expert in finance, accountancy, and tax. If you are the manager of a multinational with several subsidiaries in Europe, your job is even more complex. Unlike in the United States, where the pension system is governed by a single legislation, in Europe 27 countries each impose their own. Often what is compulsory in one country is prohibited in another. This does not ease the already monumental task faced by multinationals looking to harmonize the services offered to the employees of their European subsidiaries. The problems are further exacerbated by ongoing issues such as the persistently low rates on the financial markets, and the tightening of administrative and risk management procedures imposed by the authorities. The impact of all this on pension plans is articulated in the shape of financial underperformance and high costs. Clearly, the life of the compensation and benefits manager is not easy, which is why it should prove useful at this particular juncture—in the midst of an economic crisis no less—to assess the state of play of European pensions at the end of 2020. The questions facing a pension manager are: What is the real performance of my pension fund? What are the published costs? Are they transparent? Do the published costs bear any resemblance to the real costs? Are there any risks? What actions should I take to maximize performance and reduce costs and risks? In this article, I will try to provide some answers by taking two concrete examples: a Defined Contribution (DC) plan at guaranteed rates, managed by an insurer, and a Defined Benefit (DB) plan managed via a pension fund. I will compare these against a pension plan without a guarantee (unit linked) as part of an IORP (Institutions for Occupational Retirement provision) arrangement. The objective here is not to deliver an exhaustive piece of work, because an encyclopedia would not be sufficient. Rather it is to give insights to those in charge of restructuring, and sometimes renegotiating with the unions, the bottom line of the company pension. The overriding question in this article is: Is it possible to obtain better returns for employees while reducing costs and risks for employers? As you will discover, I believe the answer is yes. I will analyze the potential impact of fees and costs on the performance of pension funds, with a view to quantifying the final outcomes for employees. I will also help compensation and benefits managers identify the costs that are not transparent. I will pay particular attention to the issue of risk controls, to show how the introduction of Solvency II, in the case of pension funds managed by insurance companies, completely undermined performance. I also will study the case of DB schemes to show that, contrary to popular belief, this type of plan, which is now prohibitively expensive for the employer, is not always the best solution for employees either. While taking into account the problems related to European regulations and the failures experienced so far by those who have launched cross-border solutions, I will try to propose alternatives that can be profitable for the employer and the employee, solutions that are applicable in as many European countries as possible. These solutions offer a chance to launch or relaunch, at least partially, an IORP European project. Insurances companies: How Solvency II killed guaranteed DC schemes Sometimes we introduce new rules, thinking we are doing the right thing. But experience tells us otherwise. So it was with Solvency II at the beginning of this century. Its introduction by the European authorities was well intentioned: namely, to protect the customer from excessive risk-taking by insurance companies. Ironically though, in the event of bankruptcy, the customer would become the first victim. It has become an unfortunate truism that the Solvency II philosophy, taken to excess, has led to a collapse in insurance company returns. This is now reflected in the returns offered to clients, and puts insurance companies in a difficult position in the event of rapid rate hikes. In short, avoiding the risk has only served to increase the risk. Solvency II has inadvertently ensured that guaranteed rate pensions are ever more costly and complicated for employers to provide—and especially for multinationals. Not only do guaranteed rate pensions work differently all over Europe, and therefore have to be compliant with the regulations of each local country in which an organization operates. Also, thanks to a lack of transparency around pension management fees and the impact of Solvency II, achieving the guarantees promised has become a challenging mission. What prompted the aversion to risk taking? At the end of the last millennium, the first major internet flaw (remember the furor around Y2K?), followed by the 9/11 terrorist attacks in 2001, showed that some insurance companies were taking excessive risks. At the time, I was working for an insurance company whose major goal was to implement the new Solvency II models, which were designed to provide greater risk control. I personally participated in the creation of these models. It was, in terms of learning, one of the richest periods of my entire career. However, from the first moments, it felt like the measures were taking the industry too far in only one direction. But don’t you have to “speculate to accumulate”? To keep it simple, it is important to know that the solvency margin of an insurance company is inversely proportional to its ability to make a profit. The higher the margin, the more it is seen as a responsible insurer, but the less likely it is to perform well in the future. This is not a fault, far from it, as long as you do not overdo it. Many parameters are taken into account for the calculation of the solvency margin, but among the most visible and the easiest to manipulate is the level of investments in equities. The more equities you have, the lower your solvency margin, and vice versa. As early as 2004, almost all insurers decided to raise their solvency margin. Companies that already had a sufficient margin (the average of the main European insurers was 120%) decided to increase it further, reaching 150%, sometimes 180%. Before 2004, a European insurer’s portfolio comprised on average 20% to 25% equities. By the end of 2006, this average had fallen to 18%. The 2008 financial crisis and the countless “stress tests” imposed by the European authorities accelerated this movement. At the end of 2016, the share of equities in the portfolio of countless insurers hovered around 5%. The icing on the cake? What have we replaced these equities with? By bonds, which today yield negative rates! Worrisome, because if ever rates were to rise sharply, bond portfolios would produce large capital losses. Some insurance companies, which to date have up to 90% of investments in bonds, would no longer be able to honor their commitments to their customers. And alas, it all started with the good intention of protecting the client. So, back to pension funds… Although what I have just described is true for all life insurance, the phenomenon is particularly visible for pension funds. I estimate that in the portfolios I have studied, the lack of performance opportunity between 2008 and 2020 could reach an average of 2.00% per year. Let's end on a positive note. For the past two years, the top management of some companies has started to react, meaning the share of equity investments has started to rise. The solvency margin will fall but, paradoxically, this policy change could reduce the risk associated with a rise in rates. However, dealing with solvency capital issues has a cost—and in the end, the client will pay for it. Such cost is not always visible to the client. This will lead us to the next part of my analysis: the real costs of an insurance pension contract. Insured guaranteed pension plan costs: transparent or opaque? It is impossible to describe the charges and fee structures of all the pension schemes around Europe. There are literally hundreds of them. All are different. And the visible fees may vary from the simple to the complex. Therefore, to help explain my thoughts, allow me to proceed with an example. For this, I will refer to the Belgian Branche 21 system. The comments in the box below are taken from the booklet The Real Return, published by the Better Finance Association in 2020. Better Finance has produced some amazing work. Among other facts and figures, they recalculated the average of the costs charged by pension institutions or insurers, country by country and pillar by pillar. Here are the published figures for Belgium; the cost reality is somewhat different, as I will go on to explain. This information is crucial. The table below might show us the published figures, but the attached comments demonstrate that these costs can go from 1% to more than 5%. First, we need to calculate the annual Total Expense Ratio (TER). To obtain the TER, assuming that you remain in the pension plan for 10 years and using the Assuralia data from the table below, I come to the conclusion that the average TER in Belgium for Branch 21 was 0.74% in 2018 [0.6% Admin charges + (1.4% Commissions/10 years)]. These are only the visible costs. The 0.74% represents the fees officially charged by the insurance company for the management of pension funds with guaranteed rates (Branch 21). These funds are not ring-fenced, so it is sometimes difficult to differentiate between the assets managed by the insurance company on behalf of pensions, and the assets managed on behalf of life insurance. At the end of the year, the insurance companies redistribute to their policyholders a profit sharing calculated on the performance obtained on the stock market, less the overhead costs of the insurance company. These overheads are calculated according to the time that insurance company employees allocate to pension funds and the time they allocate to life insurance. It sounds very sensible in theory. But, in practice, when I worked for an insurer trying to make sure such calculations were not arbitrary, but rather scientifically based, I can confirm that this exercise is incredibly difficult. In the end, it is these overheads that are responsible for decreasing the profit sharing to which the customer is entitled. Such costs only appear in part in the statistics in the table above, but ultimately reduce the performance of the pension fund through lower profit sharing. In addition, these statistics do not take into account the costs linked to the Solvency II margin and any options that insurers could purchase to cover the minimum guaranteed rate. From start to finish, it is difficult to be able to give an exact figure for the costs of managing a pension fund, but it is clearly more than the 0.74% announced in our previous table. Transparency is not easy to obtain, even for the insurer itself. Without being able to provide mathematical evidence, I estimate that the real costs for a product with a guarantee are instead closer to 3%, broken down into: 1% operating costs of the company and 2% hidden cost of the guarantee. To arrive at this estimate, I performed an analysis that might shock more than one actuary. I started with a hypothetical question: what return could the insured expect if they gave up the capital guarantee and the guaranteed minimum rates? Such a client could afford to invest in risky assets. I will take the example of the French market here. I compared the performance of the AFER (Association Française d'Epargne et de Retraite) guaranteed rate with the performance of an investor who placed all their holdings on the CAC 40 (French equities) between the end of 1976 and 2019. The AFER is a guaranteed fund managed by Aviva, considered to be the benchmark of the French Market. The comparison may seem absurd, as an insurance company even in the mid-1990s never placed all of its holdings in the stock market. But for me, it's a matter of calculating the forfeiture rate that the company has to bear in order for the insured to have a guarantee on the capital. The difference between the two performances will therefore represent the cost of the guarantee. The annual performance over a period of 42 years is 6.88% for guaranteed rate products and 10.76% for riskier investments in equities; or 3.88% difference per year. The performances are exceptionally high, due to the period of double-digit inflation that the whole of Europe experienced in the 1970s and until the early 1980s. Moreover, we can see very clearly that the curve representing the evolution of capital-guaranteed investments tends to flatten out along the way. If we analyze other decades we find lower performance. However, even taking other dates, over periods ranging from 20 to 30 years, the red curve always remains above the blue curve. For countries where I was able to do a similar study, such as Italy and Belgium, I got similar results: between 2% and 4% difference in annual yield depending on the country or the period. The longer the periods, the more this gap tended to stabilize around 3% or more. In a non-accounting way, but empirically, this is roughly the cost of the rate guarantee in terms of lost opportunities for the insured: 3%. Of course, you could object that this 3% difference includes the 0.74% costs that the insurance companies need, on average, to operate even if they were not to offer a guaranteed rate. This still has enormous consequences for the future retiree. Here’s why. Firstly, as explained at the beginning of this chapter, I assume that in reality the minimum running costs for a company are higher than 0.74%. I set them arbitrarily and in my personal experience at 1%. Secondly, let's analyze the consequences for the end customer over the long term. The difference between 1% and 3% costs, after one year, might not seem all that significant. But when applied to the pension fund of an individual after 40 years in employment guaranteed—and all else being equal—a 1% cost could result in a pension 60% higher than the same fund with a 3% cost attached. It’s worth noting that this difference would be even greater if we had taken the company's operating cost of 0.74%. In these conditions, we are far from the 1980s and 1990s, when having a contract with an interest rate guarantee offered sufficiently interesting performance to forget the cost of the guarantee. (Remember the period of exceptionally high interest rates at that time?) Today the situation on the financial markets makes the blow of the guarantee unbearable, especially for the employee. In conclusion, a DC scheme with a guarantee is not the right solution for the employee. Arguably, neither is it the right solution for the insurer, who has to fight with the problems related to Solvency II and the associated decline in profitability. Indeed, a guaranteed DC scheme also is not the right solution for the employer, who in many countries will have a legal obligation to intervene to cover liabilities if the insurer does not meet its objectives or goes bankrupt. If the main insurance companies continue to offer DC with a guarantee, it is for the simple reason that these products have been around for a long time. One cannot easily close pension plans that are in force and that will remain active for decades to come. For any compensation and benefits manager in charge of company pensions who is not too immersed in local legal considerations that would act as a blocker, now is the time to open discussions with employees. Even in Belgium, where the law obliges the employer to guarantee a 1.75% annual return on the contributions paid, the fact that today most insurers guarantee no more than 0.5% constitutes a certain burden that should prompt employers to react. IORP pension fund with DB: Convincing unions there are other solutions DB pension plans have, for a long time, represented the solution offered by the majority of employers, especially in the Anglo-Saxon countries, the Nordic countries, The Netherlands, and Germany to a lesser extent. Even though, for almost 20 years, newly created pension schemes were all DC, with or without a guarantee (unit linked), DB still accounts for the majority of pension assets under management. The table below gives an idea of the prevalence by type of pensions by country. Note also that the UK and Dutch pension markets alone represent more than 60% of pension reserves at the European level. This illustrates the issues and allows us to better understand how difficult it will be to change habits. The typical DB contract often promised an amount equal to 2% of the last salary (or the average of the last years) per year of presence in the company. So, after a 40-year career we can achieve a replacement rate of 80% of the last salary. This is a great promise made by the employer. It should be noted that according to the Organization for Economic Cooperation and Development (OECD) in the Panorame des Pensions 2019, the average of the developed countries barely reaches a replacement rate of 58%. It is therefore understandable that no one, especially the unions, wants to question a system that would make it possible to reach 80%. But it is a mistake to believe this result can be obtained without risk. Also, if the average replacement rate at the level stated by the OECD is so low, it is because other countries have either contributed insufficiently or were invested in DC schemes with a guarantee that, as we have seen in the first part of this article, are going through difficult times. So, it is not the case that the one who has invested in a DB pension has managed his money well, but rather that others have done badly. At the risk of sounding pretentious, I believe results of 80% are achievable. And I will prove it. Recently, I had the opportunity on behalf of a client to look into a company that in the mid-2000s went from a DB to a unit-linked DC. Therefore, it existed without a guarantee, and with the entire risk at the expense of the employee. The unions only accepted the new DC for new employees. However, it was agreed that the employer would contribute 12% of eligible employees’ salaries to this plan. The company therefore ended up with two pension plans, one DB and one DC. The expected rate of return for the DB was 4.7%, calculated from an asset allocation determined by the employer. The expected profitability for the DC was variable, because employees could decide their own asset allocation by choosing among three SICAVs (shares, bond, or cash). From that moment it was possible to compare the evolution of the pensions of two employees, one participant in the old DB and the other in the new DC. First, I compared the two regimes, assigning to both the same expected asset gain of 4.7%. The graph (GRAPH 1) illustrates the somewhat unsurprising result. In this graph, the DC plan loses in any case, and arrives at only a 50% replacement rate, which explains why unions in the mid-2000s were not happy to abandon DB. However, at the end of 2020, when checking the reserves of certain DC plan participants, I was amazed to see that under certain time and asset allocation conditions, they actually performed better than DB plan participants. What happened was that some employees invested heavily in the SICAV, which was 100% invested in equities. This SICAV achieved an average performance of 8.12% over the period (GRAPH 2). By recapitalizing everything at the same rate, we obtain the following curve and better understand what happened: the blue curve has passed above the red curve, the latter reaching a maximum point after 40 years. Not all DC participants invested 100% in equities; most preferred a mix with bonds. But even in the case of an employee investing 50% equities and 50% in bonds, the performance was 5.6% on the period, which gives us a curve as per the graph (GRAPH 3). In the last example, it’s clear that any individuals who stay with the company for the first 20 years of their career have an interest in investing in the DC plan rather than the DB. Indeed, the longer assets remain invested at a rate of 5.6%, the more time they have to catch up with the larger contribution that was paid by the employer to the DB, which hits a ceiling at 4.7%. On the other hand, in this example, after 20 years you no longer have enough time to capitalize. In addition, the DB has a major drawback in the event that employees leave the company a long time before planning to retire. In fact, rights are acquired on the last salary on the day of their departure. If there is a lot of inflation between their departure and their day of retirement, the percentage will be calculated on an extremely depreciated amount. On the other hand, the assets of an employee who was invested in a unit-linked DC, which would have been left in the fund until retirement, will continue to produce profits. A trade unionist responded to this example by explaining that he prefers the security of a DB pension. It’s a fact that DB remains less risky, while still offering excellent performance; it is true that the advantages of the unit-linked DC will only be realized at a performance rate of 5.6% or 8.12% in our examples. Because the expected rate of the DB was 4.70%, a DC is a better option only if it produces a rate above 4.70%. In conclusion, I do not mean that a DC unit linked is better than a DB plan per se, but in my opinion it is possible that in the long term it will perform better. IORP DB pensions: No risks for employees? An article in Pension & Investment on February 6, 2020, entitled General Motors to shift $570 million to pension plans, states that: “The U.S. pension plans' discount rate as of Dec. 31 was 3.2%, down from 4.2% the previous year, while the discount rate for the non-U.S. plans was 2.2%, down from 2.9% the previous year.” As a consequence, General Motors decided to contribute about $570 million US to its pension plans (US and non-US) in 2020. This represented 35% of the 2019 result of the company, which was $1.6 billion. In this case, the employer took over the refinancing of the company's pension fund, but this is not always possible. In 2012, after the two financial crises of 2008 (junk bonds) and 2012 (Greek debt), the situation was so critical that General Motors theoretically could have gone bankrupt. In the end, the company was forced to restructure its pension funds. The plan offered a total reduction of $26 billion in benefits; 118,000 employees were impacted, and for 42,000 of them, General Motors preferred to offer a lump sum rather than continuing to pay annuities. This is an example of the consequences that a DB scheme must face when the guarantees cannot be matched by the returns of the fund. Everyone pays, employer and employee. In extreme cases, if unions take an inflexible stance and refuse to cut profits, the fund can go bankrupt and everyone is left with nothing. Closer to us, a working paper published by the De Nederlandsche Bank in October 2015 entitled “Recovery measures of underfunded pension funds: higher contributions, no indexation, or pension cuts?” tells how, after the 2008 crisis, the average of the first 600 pension funds, which were under the supervision of the Central Bank, went from a funding ratio of 144% to 91%. For the record, the supervisor in the Netherlands set the minimum limit for the funding ratio at 105%. Most funds are designed to return above the minimum required by adopting one or more of the following measures: Contribution rate increase This means that both the employer and the employee are impacted. No indexation This particularly impacts retirees. Pension cut This impacts employees and retirees In conclusion, if there is a financial crisis, everyone—employer, employees, retirees—will be affected. So, the feeling of being well protected inside a DB is not, for me, as justified as some people like to think. In the event of a financial crisis (sound familiar?), the employee who is invested in an unsecured DC (unit linked) suffers the consequences. Where a DB scheme is concerned, however, the employer in principle suffers the consequences for hundreds or thousands of employees. However, there are two things to bear in mind. One, if the crisis is not too serious and the market starts again, the guarantee is rendered superfluous. If, on the other hand, the crisis is prolonged, the employer is put in difficulty or even bankrupt, and the loss is ultimately transferred to the employee. So, if you think about it, what's the point of having a guarantee? The only advantage that the guarantee affords to most investment funds is to push the asset manager to reduce risks, by investing in asset classes such as bonds (less profitable) or, worse, to buy swaps or hedging options that are extremely expensive and decrease profitability. Finally, there would be two other significant advantages in moving from a DB pension fund to a unit-linked fund. First, a unit-linked fund is less expensive in terms of control and audit procedures. Just think of all the work that actuaries do to check the reserves one by one and make sure everyone is meeting the goals. Think of all the risk management and asset allocation committees that have to meet several times a year. My conclusion is that if we succeed in changing the European culture and nudge the unions toward unit linked, the work would be simplified, the costs reduced, the transparency increased, and the performances boosted. I don't fool myself that I alone can convince the unions of the need to change the system. But it is important that someone starts talking about it. The second argument for moving from a DB scheme is that a unit-linked scheme would remove one of the major blocks to the development of cross-border pension funds in Europe. We’ll investigate this in more detail next. IORP cross border pension fund: Why they didn’t take off In Europe, the 2003 Directive on Institutions for Occupational Retirement Provisions (IORP), revised in 2016, never really took off. PensionsEurope represents the national associations of pension funds and similar institutions for workplace and other funded pensions. It accounts for a very large part of pension funds and, according to its 2018 data, there are no less than 103,698 pension funds in Europe. According to data held by the European Insurance and Occupational Pension Authority (EIOPA), only 81 of these funds have cross-border activity, and of these, only 73 are active. With the UK's exit from Europe, that number is set to decline. How is it possible that almost 20 years after the introduction of the European directive on IORPs, cross border activities still have not taken off? There are three major reasons: Different legislation per country The obligation to do the reporting twice Different taxation per country Different legislation per country Just as social laws still are not harmonized in Europe, the guaranteed minimum rates vary from one country to another. Some are more expensive depending on the level of the guarantee, and of course there are different asset allocations to consider. Consequently, it is impossible to keep all investments in the same pot. This is one of the reasons that led to the directive proposing separate compartments by country. Under such conditions, we cannot really speak of economies of scale, because the investments remain separate. The obligation to report twice An IORP established in Luxembourg with activities in Belgium has a legal obligation to report to the authorities in Luxembourg, but for the Belgian compartment it must also report to the Belgian authorities. Because of the peculiarities of each country, these reports demand a different presentation for each authority. This is a real nightmare for the third-party administrator in charge of these documents, and ends up almost doubling the reporting costs. Different taxation per country An additional complication is that each country applies its own tax system. Some countries apply an exemption on contributions, but charge a tax on capital gains and at the time of exit (ETT, e.g, Italy). Other countries tax contributions but do not charge capital gains or on exit (TEE, e.g., Luxembourg); still others charge a tax only at the time of exit (EET, e.g., France, Belgium). Convincing the unions to abandon the DB and DC guarantees and accept DC unit-linked (without guarantees) would solve at least two of the problems. First, from the moment that there is no longer any guarantee: anyone can invest in the same selection of SICAVs; we no longer need to compartmentalize the assets by country; and we would have real asset pooling with real economies of scale. Second, unit linked products are more standardized and easier to report upon than guaranteed rate or DB products. Two copies should always be made for unit linked products, but the process is faster and with less expense attached. In conclusion, an IORP based on unit linked products would allow real portability between European countries—portability that today is only theoretical. What other things should a compensation and benefits manager keep in mind about pensions? Two factors that no one can do anything about will impact pensions over the next few years: COVID-19 and taxes. Since 2016, several countries in Europe have noticed a slowdown in the increase in life expectancy, even a slight decline. With COVID-19 this trend likely will continue. This is bad news for the world's population, but it could have a positive effect on pension funds in terms of less annuities to pay out. This will have to be seen on a case-by-case basis, pension fund by pension fund. But precisely because of COVID-19, some states have significantly widened their deficits and could be tempted to increase the tax on exit from pension funds. This would be a disaster for a sector that for 10 years has faced difficulties and bad news. It would become difficult to convince employees to save any more into their company funds if more of their hard-earned savings were likely to end up going to the state. In such a scenario, it is likely we’d see a concerted move toward private investments—less regulated, cheaper, less taxed. Conclusion DC with a guarantee and DB pensions together represent a big part of all pensions in Europe. However, only a tiny fraction of investments are made in DCs without a guarantee. Yet it is my opinion that developing DCs without guarantees will revive a pension industry that for 20 years has been completely closed to innovation. Mentalities do not change overnight. It is only natural for it to take time and for long discussions to take place within companies. These changes cannot come from the states because it is ultimately the end customer (the employee) who must decide. The choice will have to be made between the opaque and expensive systems of today, which offer guarantees that are not necessarily guaranteed, and a system that might be a little riskier but more transparent and efficient. The old DB pension schemes will continue to exist for a long time, but we can make an effort to shift toward the new pension funds. This involves convincing newly recruited employees to accept different forms of pensions than those their elders knew. The DC unit-inked can do better. See you in 30 …

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16 November 2020Self-Employed? How to Protect Your Wellbeing

Andreana Drencheva, Kristin Hildenbrand and Mike Duffy Jr. Through choice or by necessity, some of us are becoming self-employed for the first time during the COVID-19 pandemic. Evidence from multiple countries suggests that self-employed workers are one of the groups hardest hit by the pandemic. Support offered by governments varies. Yet, for some, self-employment may represent the only way of earning a living and remaining active in the labour market. The self-employed are a diverse group that includes everyone from independent consultants, hairdressers and dog walkers, to executive producers and part-time delivery drivers. What can those transitioning to self-employment do to protect their wellbeing? We’ve got six tips. 1. Protect boundaries For self-employed people, boundaries can be blurry. This includes those between work and the rest of life, working for different clients, and working on personal business and on clients’ businesses. This can be caused by the income insecurity inherent in self-employed work, clients’ expectations for availability around the clock or renegotiation of agreed work, which creates complications in competing demands. Long working hours and difficulty in disengaging from work contribute to potential conflicts between work and family and burnout. However, research suggests that learning to say no and protect boundaries creates room to rest and recharge. It helps with taking on new opportunities, improving performance (by focusing on only one task at a time), and having a life and identity outside of work. There are several things that can be helpful: turning off wifi, deleting the email app from your phone, and scheduling all tasks – including family time and leisure – in addition to making an effort to be mindfully present with loved ones. 2. Learn Self-employed people have more responsibilities and less support than employees. They are in charge of every aspect of their business, without access to admin and sales teams, databases, stationary and so on, which can be stressful. To manage this stress, self-employed people can learn the ins and outs of their business through enrolling in free online courses tailored to them, or using the knowledge of peers and mentors. Additionally, research shows that finding and using personal strengths can reduce stress, while boosting productivity and wellbeing. Indeed, learning itself is a route toward wellbeing. 3. Understand potential unknowns Self-employed workers face many insecurities, such as variable workloads, changing client demands, cash flow issues and insecure incomes. These cause fear and uncertainty and take up valuable mental and emotional resources. Not knowing whether work will be available in three months or whether a client will pay on time aren’t only scary on their own, but also bring the possibility of experiencing pain and loss if everything crumbles and impacts loved ones. People can learn how to build emergency funds, manage slow paying clients, and develop a growth mindset to cope with unexpected challenges. 4. Nurture relationships Self-employment is often a lonely journey because others may not understand what the role involves. There are no formal co-workers around, and making time to socialise can be challenging. Loneliness is detrimental to wellbeing, with associated risks that exceed the danger of smoking 15 cigarettes per day. Nurturing relationships is essential and self-employed workers can develop positive relationships a number of ways. Sending thank you letters to clients, seeking out and working with mentors and peers, and prioritising time to connect with family, friends, and significant others all help create meaningful connections. 5. Give up unhealthy pressure Self-employed people put unhealthy pressures on themselves. It can be easy to compare ourselves to highly visible entrepreneurs and feel guilt, shame and disappointment from not meeting personal expectations. While these self-imposed pressures can have, to some extent, a motivational effect to work harder, they also act as stressors and impair wellbeing. Such unhealthy pressures might also make it more difficult to open up, express vulnerability, and seek support because of fear that this may be perceived as a weakness. Acknowledging the multiple reasons why something may not be going well and practising self-compassion is a simple, yet powerful technique. 6. Establish routines While self-employed people have greater autonomy and flexibility than employees, they also lack the structure and support of organisations. This unique combination of working conditions makes it more difficult to remain motivated, to avoid stress and to manage time, creating a spiral of negative emotions that becomes a self-fulfilling prophecy, impairing performance through procrastination. One way to cope with this challenge is by establishing routines. In addition to reducing some of the negative emotions and improving productivity, routines can promote a sense of wellbeing and meaning. Routines can also make it easier to incorporate the steps mentioned previously into daily or weekly schedules, including time to look after oneself, not just the business. The COVID-19 pandemic is a difficult time to become self-employed. But when the challenges inherent in this type of work are addressed, self-employment can actually contribute to wellbeing. It can create flexibility, autonomy, a sense of meaning, and opportunities to be creative and express one’s values. Like all change, this transition will likely require time and self-compassion. But in the long term, self-employment can be sustainable and rewarding, provided we look after …

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16 November 2020Obesity Harms the Body in Real Time

The COVID-19 pandemic has thrust the obesity epidemic once again into the spotlight, revealing that obesity is no longer a disease that harms just in the long run but one that can have acutely devastating effects. New studies and information confirm doctors’ suspicion that this virus takes advantage of a disease that our current U.S. health care system is unable to get under control. In most recent news, the Centers for Disease Control and Prevention reports that 73% of nurses who have been hospitalized from COVID-19 had obesity. In addition, a recent study found that obesity could interfere with the effectiveness of a COVID-19 vaccine. I am an obesity specialist and clinical physician working on the front lines of obesity in primary care at the University of Virginia Health System. In the past, I often found myself warning my patients that obesity could take years off their life. Now, more than ever, this warning has become verifiable. More damage than believed Initially physicians believed that having obesity increased only your risk of getting sicker from COVID-19, not your chance of being infected in the first place. Now, newer analysis shows that not only does obesity increase your risk of being sicker and dying from COVID-19; obesity increases your risk of getting infected in the first place. In March 2020, observational studies noted hypertension, diabetes and coronary artery disease as the most common other conditions – or co-morbidities – in patients with more severe COVID-19 disease. But it was the editors of Obesity journal who first raised the alarm on April 1, 2020 that obesity would likely prove to be an independent risk factor for more severe effects of COVID-19 infection. Additionally, two studies including nearly 10,000 patients have shown that patients who have both COVID-19 and obesity have a higher risk of death at days 21 and 45 compared to patients with a normal body mass index, or BMI. And a study published in September, 2020 reported higher rates of obesity in COVID-19 patients who are critically ill and require intubation. It is becoming overwhelmingly evident from these studies and others that those with obesity are facing a clear and present danger. Stigma and lack of understanding Obesity is an interesting disease. It is one that many physicians talk about, often in frustration that their patients cannot prevent or reverse it with the oversimplified treatment plan that we have been taught in our initial training; “Eat less and exercise more.” It is also a disease that causes problems physically, such as sleep apnea and joint pain. It also affects one’s mind and spirit due to societal and medical professionals’ bias against those with obesity. It can even adversely affect the size of your paycheck. Can you imagine the outcry if the headline read “Patients with high blood pressure earn less”? We doctors and researchers have understood for quite some time the long-term consequences of excess weight and obesity. We currently recognize that obesity is associated with at least 236 medical diagnoses, including 13 types of cancer. Obesity can decrease one’s lifespan by up to eight years. Despite knowing this, U.S. physicians are not prepared to prevent and reverse obesity. In a recently published survey, only 10% of medical school deans and curriculum experts feel that their students were “very prepared” in regards to obesity management. Half of the medical schools responded that expanding obesity education was a low priority or not a priority. An average of 10 hours total was reported as dedicated to obesity education during their entire training in medical school. And doctors sometimes don’t know how or when to prescribe medications for patients with obesity. For example, eight FDA-approved weight loss medications are on the market, but only 2% of eligible patients receive prescriptions for them from their physicians. What goes on in the body So, here we are, with a collision of the obesity epidemic and the COVID-19 pandemic. And a question I find patients asking me more and more: How does obesity create more severe disease and complication from COVID-19 infection? There are many answers; lets start with structure. Excess adipose tissue, which stores fat, creates a mechanical compression in patients with obesity. This limits their ability to take in and completely release a full breath of air. Breathing takes more work in a patient with obesity. It creates restrictive lung disease, and in the more serious cases, lead to hypoventilation syndrome, which can cause a person to have too little oxygen in their blood. And then there is function. Obesity results in an excess of adipose tissue, or what we colloquially call “fat.” Over the years, scientists have learned that adipose tissue is harmful in and of itself. One may say that adipose tissue acts as an endocrine organ all its own. It releases multiple hormones and molecules that lead to a chronic state of inflammation in patients with obesity. When the body is in a constant state of low-grade inflammation, it releases cytokines, proteins that fight inflammation. They keep the body on guard, simmering and ready to fight disease. That’s all well and good when they are kept in check by other systems and cells. When they are chronically released, however, an imbalance can occur that causes injury to the body. Think of it like a small but contained wildfire. It’s dangerous, but it’s not burning the entire forest. COVID-19 causes the body to create another cytokine wildfire. When a person who is obese has COVID-19, two small cytokine wildfires come together, leading to the raging fire of inflammation that damages the lungs even more so than patients with normal BMI. Additionally, this chronic state of inflammation can lead to something called endothelial dysfunction. In this condition, instead of opening up, blood vessels close down and constrict, further decreasing oxygen to the tissues. In addition, increased adipose tissue may have more ACE-2, the enzyme that allows the coronavirus to invade cells and begin to damage them. A recent study has shown an association of increased ACE-2 in adipose tissue rather than lung tissue. This finding further strengthens the hypothesis that obesity plays a major role in more serious COVID-19 infections. So in theory, if you have more adipose tissue, the virus can bind to and invade more cells, causing higher viral loads that stay around longer, which can make the infection more severe and prolong recovery. ACE-2 can be helpful in counteracting inflammation, but if it otherwise bound to COVID-19, it cannot assist with this. The novel SARS COVID-19 virus has forced the medical profession to face the reality that many U.S. physicians inherently know. When it comes to prevention of chronic diseases such as obesity, the U.S. health care system is not performing well. Many insurers reward physicians by meeting metrics of treating the effects of obesity rather than preventing it or treating the disease itself. Physicians are reimbursed, for example, for helping patients with Type 2 diabetes to attain a certain A1C level, or a set blood pressure goal. I believe is time to educate physicians and provide them with resources to combat obesity. Physicians can no longer deny that obesity, one of the strongest predictors for COVID-19 and at least 236 other medical conditions, must become public enemy number …

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16 November 2020Social Recognition for Employee Engagement, Q&A with Achievers

Jon Maddison Modern businesses understand that when they recognise their employees, business performance improves. Recognition is one of the most basic ways to strengthen the employer-employee relationship, but many companies only recognise employees in an ad hoc way. Recognising employees in a consistent, frequent and meaningful way ultimately boosts both productivity and the bottom line. A social recognition platform enables companies to recognise and reinforce desired behaviours, while empowering employees to share their work. The technology gives unlimited access to non-monetary recognition, and how points are awarded, distributed and budgeted is automated and can be configured in line with business requirements. As companies consider strategies to strengthen employee engagement and retention, they should bear in mind that social recognition delivers proven results. The need for organisations to invest in social recognition Social recognition platforms are designed to be used frequently by leaders, managers and workers anytime and from anywhere. According to an employee engagement study of 16,000 professionals carried out by Deloitte, 85% of those surveyed said they prefer to be recognised, either verbally or in writing, for their efforts above any other type of reward. Social recognition gives companies one of the few contemporary options available for recognising talent transparently and in front of their peers. Traditional service awards and gifts have little impact on employee motivation and engagement. But building a business case for social recognition involves answering questions such as: What kind of return should the organisation expect from investing in social recognition? What sort of issues can social recognition help to overcome? How does social recognition differ from other kinds of HR tools? How should you convince key stakeholders of the value of social recognition? The three main benefits of social recognition Social recognition tends to deliver organisational benefits in three main areas: business, talent and cost. Employees who feel recognised by their manager and co-workers are more likely to go the extra mile and add value to their organisation. Social recognition also has a positive effect on talent metrics such as retention and engagement. Individuals who are consistently recognised are more likely to stay with their employer and contribute to business goals. Another advantage of social recognition is that companies looking to implement it don’t always need to find extra budget to do so. By conducting an internal audit of current technology and the value that it genuinely delivers, businesses often find that they are replacing tools such as expensive reward-led programmes or outdated performance systems with a social recognition platform. The issues that social recognition helps to tackle Organisations are finding it increasingly difficult to engage effectively with their workforce. Changes in employee demographics, the demands of employee experience, the need to invest strategically in technology and the current COVID-19 pandemic present HR and talent professionals with exciting but challenging opportunities. Instead of improving, employee engagement at many companies is going backwards. No matter what conditions your company is facing, ensuring employees feel valued and appreciated is important and can have a strong impact on engagement, productivity, and morale. Recognition is especially essential during times of crisis when employees might feel disconnected. Let’s take a look at the numbers when it comes to recognition: "Lack of recognition” is the third biggest reason people say they are – or would consider – leaving their jobs 82% of employees wish they received more recognition for their work Recognition has the greatest impact on employee engagement Social recognition is twice as likely to improve performance and NPS scores To create a culture of recognition, organisations need to commit themselves to their workforce and adopt a new method of recognising their employees. Social recognition recalibrates the employer-employee relationship by simplifying the way companies can praise workers who are helping to achieve business objectives, and by making that appreciation happen more regularly. Once embedded within and adopted by an organisation, this kind of approach can add value way beyond traditional HR techniques and will permeate the whole company. Q&A with Jon Maddison, Managing Director EMEA at Achievers GBV: In peer-to-peer recognition systems, how do you take into account cultural differences in international/multinational companies? (This could also apply to networks of linked companies.) Jon Maddison: There are some fairly major cultural differences apparent in the concept of recognition from country to country, but what is universal is that people do like to be recognised and, thanks to the growth of social media, appreciate it more and more in a public setting. Through both research and our years of experience working with multinational clients, we help organisations to understand how cultural differences will impact how recognition platforms are rolled out, adopted and used. This helps them understand how to effectively benchmark in each country, and to set clear expectations of what success looks like in different markets. Where geographically have you seen specific cultural differences in social recognition, and what do you perceive to be the reasons for this? JM:The importance of recognition within businesses has spread quickly in multinational companies, so that HR leaders in most large organisations globally get the concept and are focused on it. But many smaller to mid-size enterprises are not quite there yet. One example of cultural differences across international borders would be Japan, where there has been a culture of lifetime employment that is not common in many other countries. While that is changing, it certainly has a bearing on what recognition means and how it is used, particularly in more informal settings like social media. GBV: How would you assess the impact of social recognition on employee mental health (for example, divorce and financial issues leading to mental health issues)? JM: Positive reinforcement and praise make people feel appreciated and encouraged, so they can be of immense benefit to our mental wellness, particularly when you consider that work-related stress can have a big impact on overall mental health. During uncertain and challenging times such as the global pandemic we’re currently facing, mental health and wellbeing require even greater focus and attention. Mental health is on a continuum and people may fall anywhere on that spectrum. Physical health conditions cost businesses roughly $36.4 billion in productivity loss each year. In contrast, the estimate on the annual productivity loss related to mental health is at a staggering $1 trillion. It’s in the best interests of both employees and employers to ensure that provisions are in place to promote mental health at work and boost productivity. During challenging times, it’s important to spread appreciation. Thankfully, we have recognition platforms available that enable employees to spread words of appreciation to one another, from anywhere. Make it your priority to spread appreciation on a daily basis – people need it now more than ever. GBV: Data is the underlying cornerstone of the system. How do you see this data and its application providing workforce wellbeing (and not just corporate benefits)? JM:It is absolutely essential for any recognition programme to be built on data. Analytics that are easy to access, understand and share are what helps businesses see if recognition is encouraging behaviours that are aligned to corporate values and operational goals. The corporate benefits are clear, but a recognition system actually creates a virtuous circle of workforce wellbeing, too. We often talk about how important workforce wellbeing is to business – the clients we work with are making this a reality. When people are publicly recognised for doing their jobs well and in line with the strategy of the business, this provides them with a strong sense of accomplishment. They also have clarity of what’s expected of them, expectations which makes it easier for them to succeed and feel fulfilled in their work. GBV: What does the future hold for Achievers? JM:I feel that companies in the UK and Europe are embracing new ways to elevate employee engagement and recognition. We have ambitious expansion plans for EMEA, and I will be working with the team to explore a number of exciting new avenues. Most companies have lots of HR tech products that are used separately. The beauty of our technology is that it integrates with these tools, driving their use while ensuring employee recognition and engagement is prioritised.  Find out more about Achievers’ employee engagement …

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16 July 2020Coronavirus: scientists uncover why some people lose their sense of smell

Simon Gane and Jane Parker One of the most common causes of smell loss is a viral infection, such as the common cold, sinus or other upper respiratory tract infections. Those coronaviruses that don’t cause deadly diseases, such as COVID-19, Sars and Mers, are one of the causes of the common cold and have been known to cause smell loss. In most of these cases, sense of smell returns when symptoms clear, as smell loss is simply the result of a blocked nose, which prevents aroma molecules reaching olfactory receptors in the nose. In some cases, smell loss can persist for months and years. For the novel coronavirus (SARS-CoV-2), however, the pattern of smell loss is different. Many people with COVID-19 reported a sudden loss of sense of smell and then a sudden and full return to a normal sense of smell in a week or two. Interestingly, many of these people said their nose was clear, so smell loss cannot be attributed to a blocked nose. For others, smell loss was prolonged and several weeks later they still had no sense of smell. Any theory of anosmia in COVID-19 has to account for both of these patterns. This sudden return of a normal sense of smell suggests an obstructive smell loss in which the aroma molecules cannot reach the receptors in the nose (the same type of loss one gets with a clothes peg on the nose). Now that we have CT scans of the noses and sinuses of people with COVID-19 smell loss, we can see that the part of the nose that does the smelling, the olfactory cleft, is blocked with swollen soft tissue and mucus – known as a cleft syndrome. The rest of the nose and sinuses look normal and patients have no problem breathing through their nose. We know that the way SARS-CoV-2 infects the body is by attaching to ACE2 receptors on the surface of cells that line the upper respiratory tract. A protein called TMPRSS2 then helps the virus invade the cell. Once inside the cell, the virus can replicate, triggering the immune system’s inflammatory response. This is the starting point for the havoc and destruction that this virus causes once in the body. Initially, we thought that the virus might be infecting and destroying the olfactory neurons. These are the cells that transmit the signal from the aroma molecule in your nose to the area in the brain where these signals get interpreted as “smell”. However, an international collaboration showed recently that the ACE2 proteins the virus needs to invade the cells were not found on the olfactory neurons. But they were found on cells called “sustentacular cells”, which support the olfactory neurons. We expect that these support cells are likely to be the ones that are damaged by the virus, and the immune response would cause swelling of the area but leave the olfactory neurons intact. When the immune system has dealt with the virus, the swelling subsides and the aroma molecules have a clear route to their undamaged receptors and the sense of smell returns to normal. So why does smell not return in some cases? This is more theoretical but follows from what we know about inflammation in other systems. Inflammation is the body’s response to damage and results in the release of chemicals that destroy the tissues involved. When this inflammation is severe, other nearby cells start to be damaged or destroyed by this “splash damage”. We believe that accounts for the second stage, where the olfactory neurons are damaged. Recovery of smell is much slower because the olfactory neurons need time to regenerate from the supply of stem cells within the lining of the nose. Initial recovery is often associated with distortion of the sense of smell known as parosmia, where things don’t smell like they used to. For many parosmics, for instance, the smell of coffee is often described as burnt, chemical, dirty and reminiscent of sewage. Physiotherapy for the nose Olfaction has been called the Cinderella of the senses because of its neglect by scientific research. But it has come to the forefront in this pandemic. The silver lining is that we will learn a lot about how viruses are involved in smell loss from this. But what hope is there for people with a loss of smell now? The good news is that the olfactory neurons can regenerate. They’re regrowing in almost all of us, all of the time. We can harness that regeneration and guide it with “physiotherapy for the nose”: smell training. There is solid evidence that many forms of smell loss are helped by this repeated, mindful exposure to a fixed set of odorants every day and no reason to think it won’t work in COVID-19 smell …

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16 July 2020Weight loss: Here’s why those last few pounds can be hardest to lose – according to science

Peter Rogers So you’ve done everything you’re supposed to. You’re eating in a calorie deficit, are exercising a few times a week, and are getting close to your weight loss goal. And then you hit a plateau with only a few pounds to lose – and they just won’t seem to budge. It’s long been a complaint that those last five pounds can often be the hardest to lose. And the answer to why this is the case reveals a lot about the dynamic relationship between body weight and appetite (what we feel when we say we’re “hungry”), and about how, as humans, we’re almost always “ready to eat”. When dieting to lose weight, there are two basic reasons why weight loss typically slows down over time. The first reason is that calorie (energy) expenditure decreases with weight loss. This “slowed metabolism” happens because fewer calories are required to maintain and move a lighter body. We can even estimate with reasonable accuracy how calorie expenditure changes according to weight. For example, a 175-centimetre-tall, moderately active 45-year-old man who weighs 90 kilograms would need to reduce his calorie intake from 3,200 to 2,270 kcal a day to lose 15 kilograms in six months. It’s worth noting that what we normally call “calories” are actually kilocalories or kcal, which is equal to 1,000 calories. If he stuck to this diet of 2,270 kcal a day throughout, he would lose on average 2.6 kilograms a month during the first five months and 1.8 kilograms in the final month. He’d then need to eat around 2,780 kcal daily to maintain his goal weight of 75 kilograms. The second reason why losing weight becomes progressively difficult is that weight loss is accompanied by an increase in appetite. The hormone leptin tells our brain how much fat is stored in our body. When we have more fat stored, leptin increases and reduces appetite. But when we lose body fat, the leptin “brake” on our appetite is partly released, making us a little more hungry. Changes in calorie expenditure and the effect of body fat stores on appetite both stabilise body weight over the long term. But their effects are barely noticeable in the short term. Instead, at any point in the day the dominant influence on our appetite is how long ago we last ate and how full we still feel from our last meal. In other words, we get hungry when our stomach tells our brain that it’s empty, or nearly empty. Ready to eat Left unchecked, signals from our stomach leave us vulnerable to overeating. This is because our stomach has the capacity to accommodate more calories than we expend. For example, a recent study found that when participants were served pizza for lunch and invited to eat until they felt “comfortably full”, they ate 1,580 kcal. When they were asked to eat as much as they could, they ate twice that amount – their daily calorie requirement in a single meal. This shows that we are almost always ready to eat – and capable of eating beyond a level of comfortable fullness. Fullness is determined partly by the fat, carbohydrate and protein content of the meal, and partly by its overall bulk. For example, if the meal contains more fibre, it’s more filling – which is why it’s hard to overeat bulky foods such as fruits and vegetables. If the study’s participants had been offered apples instead, they wouldn’t have been able to eat 1,580 kcal, let alone twice that amount. Because the concentration of calories in apples (their energy density) is only 50 kcal per 100 grams, they would need to eat over three kilograms of apples to eat 1,580 kcal. Pizza has around 280 kcal per 100 grams – over five times higher than the energy density of apples. Fullness per calorie is higher for foods that have a lower energy density. So, we’d feel more full if we ate the same number of calories from apples than pizza. But we generally find foods that have a high energy density, like pizza (and chocolate and crisps - each over 500 kcal per 100 grams) more delicious. Biologically, this is probably because these foods are a valuable resource – their low fullness per calorie means we can eat more. So we’re prone to overeat high-calorie foods for two reasons: they’re less filling per calorie, and they’re more delicious (and pleasurable) to eat. But recent research shows that high-calorie foods often don’t give us that much more pleasure when we eat them. This should make it possible to reduce calorie intake without significantly affecting pleasure. For example, choosing to eat 100 grams of strawberry yoghurt (95 kcal) instead 100 grams of strawberry cheesecake (at least 250 kcal) may be less pleasurable – but only slightly. With repetition, you may find yourself choosing the lower calorie option out of habit – and keeping your weight in check. But over time, eating less can be difficult. It’s hard to maintain vigilance and restraint to resist our desire to eat delicious, higher energy-dense foods. Dieting lapses are therefore inevitable, and over time our motivation to maintain eating restraint and increase physical activity may weaken. This can add further to the perception that the last five pounds is harder to lose. Overall, our weight settles around a point that is a balance between the lure of the foods that we include in our diet, our eating restraint, and the energy we expend in physical activity. We can change all three, although choosing foods with lower energy density may be an especially effective strategy to reduce weight. And for maintaining that healthier weight, it is worth keeping in mind that lighter bodies require fewer …

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16 July 2020Gig-working is set to dramatically change the shape of employment – how should HR prepare?

Andrew Cunningham New research shows the significant role gig workers will play in the economy as businesses reshape for the future. A report called Gig Economy: Financial Security or Greater Control shows that 18% of UK HRDs expect over 75% of their staff to be gig workers in just five years, while 26% of European HR directors believe their workforces will have 51-75% of gig workers within the same period. Aon conducted 500 interviews with three groups of people: 200 HR directors, 150 B2B/white collar gig workers and 150 B2C/blue collar gig workers. They were interviewed from across the UK, Netherlands, Spain, Germany and France. ‘Gig workers’ is a term used for anyone working on a flexible contract on a non-traditional basis. For gig worker, read freelancer, contractor, platform worker, zero hours contractor, temporary worker…the list goes on, but the principle is the same. An “explosion” of gig workers – 10% of the workforce Indeed, the use of gig workers over the last decade has really exploded because of the growth of technology, particularly with digital platforms. Now, alongside the more traditional B2B gig workers, there is an emergence of B2C gig workers, who connect customers to products and services. Take Uber for instance – the online taxi firm is entirely reliant on the willingness of its drivers to work with non-traditional contracts, effectively working on an ‘earn as you drive’ basis. White-collar freelancers in professional services have also seen a huge uptake in their services. Indeed, by the middle of last year, a study by the UK’s Trades Union Congress estimated that 10% of the workforce was employed as gig workers. Aon’s report also found: An increasing business reliance on gig workers to help to stay lean and responsive, yet 54% of gig workers are worried for their financial future, 67% would feel more positive towards the organisation if benefits were in place, while just 31% are offered benefits within their contract. The tech sector has the most acute competition for gig workers; 68% of HR directors say competition is increasing. Gig working is not a temporary solution, nearly 50% of all B2B and B2C gig workers have been so for three years or more, suggesting an active career choice (29% have worked as a contractor for 3-5 years and 18% have worked as a contractor for 6-10 years). Nine in 10 gig workers split their time between only one and three companies at a time. The impact of Coronavirus The research was conducted just before COVID-19 took a global toll. Now that employers are thinking about their return-to-work approach, the size and make up of their workforce is no doubt coming into consideration, not least to protect cash flow. In many cases this could mean a reduction or freeze in headcount, which in turn may mean an inevitable reshaping of the workforce and potentially focusing on human capital value. Some have cut back on their use of gig workers, who won’t have employment contracts to protect themselves and can be seen as an easily dispensable resource. This has left many gig workers exposed and could prejudice them against working in the future for some of those employers. Indeed, one of the outcomes of the pandemic is an increased focus on how organisations treat people, both employees and clients. Those that have not behaved as well as they could may feel an impact going forward. Preparing for change Three particular issues are detailed in the report making it necessary for organisations to prepare for change. The first issue is that regulation is likely to get stronger because of gig working’s increasingly transactional nature. Vocal champions of workers’ rights from within governments, unions and from workers themselves are shining an increasingly intense light on HR practices. The second issue is that competition for highly technical and specialised talent is outstripping supply, particularly impacting small to medium enterprises that may not be able to offer top salaries or lucrative stock options. And last but no means least, organisations may have knowledge gaps about an increasingly large part of their workforce. Individuals will drive change too It is not only regulation, markets and businesses that will drive inevitable change. Employees who have been furloughed, lost their job or had their income reduced will be looking to see if they can thrive in the post-COVID labour market and many of these individuals will no doubt consider gig working options. On top of this, the extended experiment of remote working will have had a positive impact on many individuals. We hear a lot about the downsides and negative impact work can have on people, for example poor mental health. This undoubtedly is an issue to take seriously, and as many people have found freedom and empowerment in working flexibly, they may now be thinking hard about whether being a traditional employee is the right pathway for them. The HR director’s role Whichever way gig working rises to more prominence, it is wise for HR to prepare. Behind the growth of the gig economy and the fact that gig workers might be the future stars driving performance, businesses must address frameworks and structures that have previously created a two-tier system within the workforce. Businesses need to start this new process by really understanding what gig workers consider a two-tier system looks like, giving them a platform on which to build going forward. By gaining an understanding of the motivations and needs of all their people – employed or gig workers – HR will have good knowledge of all people working for them to help drive performance outcomes and solve business challenges. Critically, for HR directors looking to drive culture change within their business, understanding that gig workers have a role to play in driving that culture is important. Being clear about an organisation’s values and ensuring that they flow through management practices towards gig workers will pay dividends in the longer term. The businesses that embrace the gig economy will have a competitive advantage provided they harness the power of this workforce through a culture of equality and wellbeing. Indeed, if the gig economy continues to grow as expected, more individuals will start to think and act like entrepreneurs rather than traditional employees. In this scenario, businesses will need to think about what will attract the best talent to offer their services to them. Although the pandemic has shown how exposed we all are in extreme circumstances, security is always important, so levelling the playing field between traditional and gig workers should be a hygiene factor in future people management strategies. On top of this, businesses will have to do more if they want to attract the best gig workers they’ll need. Employers are now beginning to realise the need to move away from a purely transactional relationship with their gig workers and understand the role that employee benefits will play in attracting flexible talent. Recalibration We are all recalibrating our perceptions of a truly remote labour force, not least after our working world changed so dramatically. Gig workers can no longer be seen as the second-class citizens of the workplace. Even now they play a critical role in the new economy, and as businesses reshape for the future, employers need to consider that gig workers are given more equality. The freezes on headcount and shortages of talent mean the demand for gig workers is likely to go up in the medium to long term, particularly for businesses who need innovation and to scale at pace. As the gig economy report finds, businesses that are prepared to embrace a more fluid workforce and cast-off outdated and restrictive people management frameworks can benefit from improved agility and greater potential for …

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16 July 2020Employee Benefits 2045 – Where Could We Be 25 Years from Now?

Ricardo Almeida In February this year, we launched our discussion paper “2045: the future of work – the changing face of employee benefits” looking at how employee benefits (EB) may change over the next 25 years, based on the trends we were seeing in the industry and the world of work. Just a few months on, the changes that we suggested might take decades are already happening because of the COVID-19 pandemic. The rate of change happening in the global EB industry, such as the delivery of digital benefits solutions and virtual healthcare provision, has accelerated beyond anything that could have been predicted at the start of the year. However, recent events have also highlighted major structural issues in employee benefits and protection. The financial vulnerability of many workers around the world, not only of the unemployed, has become clear. Changes in the labour market over the last ten years have left millions of those in employment without traditional benefits coverage, exposed without protection, in the face of a global pandemic. Even global multinationals have found their benefits coverage has policy limits they never thought they would exceed and have been left wondering if they have enough coverage for their workforce. The events of the first half of this year will be a catalyst for accelerated change in the employee benefits industry. Governments across the globe have been forced to provide an economic safety net for millions of “employed” workers, as traditional state and private sector benefits and protections have been shown to be insufficient in a time of crisis. Governments and regulators may well start to explore solutions where citizens, private businesses, insurers, and benefits providers carry a higher proportion of the risk and the financial cost of coverage. Future-proofing against events of this magnitude means we are likely to see a shift of liabilities back towards employers. This is an acceleration of an already developing trend: in Dubai employers are already required to put in place health cover for their staff that meets legal minimum requirements.¹ By 2045, there may be an expansion of legislation requiring employers to make contributions to defined benefit plans based on hours worked. This may well mean employers then pass this additional cost on to employees, potentially asking them to contribute far more towards benefits such as income protection or medical insurance. For insurers and benefits providers, there is a potential economic opportunity if they can price the risk accurately while providing accessible coverage. Changing ways of working have left millions without cover The last decade has seen an increased demand for flexible working arrangements, though debate continues as to whether this is driven by worker demand, or companies seeking to minimise the financial costs and benefits afforded to permanent employees. The natural consequence of this move has been the growth of the “gig economy,” with more and more people undertaking contract work as their main source of income. This trend, and how to provide benefits for gig workers, was one of the key areas of focus for our paper. Disruptors have fractured the business models of various industries, from hospitality (AirBnB), transportation (Uber), and food deliveries (Deliveroo). This has led to new ways of working, with people increasingly working for multiple employers or supplementing their ‘main’ income with a side ‘gig’. However, traditional employee benefits models exclude most of these workers, so new solutions will be needed to ensure they have protection in future. Some large companies have developed ad hoc solutions but there is not yet a universal model for supporting gig and freelance workers with benefits. Survey Monkey provides medical, dental and vision plans, covering 85% of the employee premium and 50% of the dependent premium, as well as transport subsidies and extended vacation, sick leave, and parental leave to their gig workers. Etsy gives its sellers access to Stride Health, a platform where they can access affordable health insurance. While they don’t fund the service, they do provide valuable financial education to sellers.² The problems caused by the lack of a universal model has become far more apparent since the start of 2020, with COVID-19 exposing the vulnerability of many ‘self-employed’ gig and freelance workers who have been left without a safety net. A 2019 study found that only 30% of gig workers said they had insurance to cover their independent work, while 89% of uninsured respondents said they were unaware of insurance policies that would cover the unique risks incurred through their work.³ Both governments and employers are unlikely to allow this situation to continue. Benefits providers will increasingly see this as a vital revenue source if they can effectively price for and protect this type of worker. The ‘protection-gap’ will need to be closed, the question is how best to achieve this? New models for employee benefits One solution to closing this protection-gap could be a radical expansion of portable benefits. These are generated by the worker and are not tied directly to a single employer, meaning an individual can accrue benefits from multiple employers. The advantage of these is that once earned, they are retained by the worker even if they are made unemployed or switch employer. The benefit itself is transferred into the new employer’s scheme or an individual’s own plan. This way no worker – gig or otherwise – would be solely reliant on an employer for their coverage. Some will argue that recent events will squeeze the gig economy, as people rush to the security of full-time positions with a comprehensive benefits package, but analysis of wider economic trends means this is unlikely. If we enter a global recession, fewer full-time opportunities will make earning funds through gig work essential for many. Businesses may also be more attracted to employing freelance and gig workers because they don’t have the costs and liabilities associated with full time employees. The portable benefits challenge The challenge is to develop portable benefits and platforms that offer affordable access to coverage. If someone has three different jobs, determining their risk profile for pricing health insurance can be incredibly difficult. The cost of administration will need to fall to make these schemes viable on a vast scale and employees will need to be more educated to understand what is available, any exclusions and policy limits. And this can be difficult and take a long time, as we have seen in the UK with auto-enrolment pensions. However, portable benefits schemes that allow different employers to contribute to a single pot to cover sick pay, life insurance, and paid time off do exist. Philadelphia4 has even passed legislation which requires the establishment of a portable paid time off system, potentially transforming workers’ rights in the gig economy. Legislating to establish a universal model for portable benefits poses challenges. For example, at what level should contributions be set or capped – as a flat percentage of payment? In countries like the UK, where employers contribute significantly through national insurance, would businesses then be willing to pay a new, enforced contribution? Many would argue they are then paying twice – a public cost and doubling up with a private one. Digital platforms and technology in implementing new benefits systems If portable benefits are to become a reality by 2045 or now even sooner, we will need to see a massive expansion of digital platforms. Insurance providers, benefits consultants and brokers will need to work in collaboration to create a system that helps delivers the benefits of the future. Systems will need to enable multiple employers to work with multiple providers at all times. Online benefits platforms, with sophisticated ledgers built on blockchain (or its successor technologies), will enable much faster approvals and payments between providers and identification of where liabilities may sit. Systems that bring all benefits – from multiple providers – into one place, offering employees the choice to tailor their programme to their individual needs, will be a major growth area. Chris Bruce, Managing Director and Co-founder of Thomsons Online Benefits, says “using an online system, employers can provide their people with flexible allowances to spend as they wish on specific areas… for example wellness or personal development .”5 While these platforms will be a necessity in the future, providers will also need to consider how to ‘humanise’ benefits provision, especially when they are accessed remotely. When it comes to claiming for health issues, for example, employees want confidence that any support is confidential. Will people be fearful that an employer can access an online platform if they are exploring mental health support provision for instance? When people are most vulnerable, will they want to chat to an AI engine or sophisticated virtual chatbot? People often access benefits at a time when they are most emotionally vulnerable or physically at their lowest – without human intervention how will employers show they care? On the other side of the equation smart apps may be welcomed as they automatically adjust top-up contributions for life insurance, medical coverage, pension, and savings account. Recent events have demonstrated it is not just accessing the benefits but also the healthcare provision itself that will be digitised. Healthcare provision will increasingly be delivered remotely. Around the globe the use of virtual GP and medical appointments has exploded in popularity across both the state and private sector. In Australia they have even developed a Virtual Hospital, which has been highlighted an example of “the pandemic driving innovations that otherwise may have taken years, if not decades, of incremental changes.”6 Responsible employers are also increasingly seeing the value in online employee assistance programmes (EAP), digital tools that help employees deal with personal problems that might adversely impact their work performance, health and wellbeing. Typically, they include assessment, short-term counselling and referral services for employees and their immediate family. If workers are increasingly working remotely, they will need these platforms to access their benefits and healthcare provision. The future In February, our discussion paper indicated change in the EB industry would be incremental and evolutionary. Recent events are driving change that is still evolutionary but now much faster. Attitudes and behaviours we anticipated would take years to change – towards flexible remote working and virtual healthcare services have been forced to change in just a few short months. The COVID-19 situation has also emphasised the value a package of additional benefits has for employees. Income protection, life, medical, and disability insurance will continue to play an important role in attracting, retaining, and protecting the workers of the future – no matter where or how they work. While for many industries contemplating 2045 seemed like a distant dream earlier this year, it is now vital that organisations prepare quickly for anticipated changes in working and demographic changes if they are to future proof their operations. When asked “What’s the most important thing to consider when considering employee benefits and the future of work?”, John Whitaker, Benefits Director at Workday, replied “The one-size-fits all model will need to change… flexibility and choice will be key for all.” After COVID-19, they already are. Whether enforced by regulatory changes or by the demands of workers, the scope, scale, and delivery methods of employee benefits will have to evolve – and evolve quickly. Those ahead of the curve will not only attract the best talent but also help protect themselves against future shocks. In a world of flexible, portable, and personalised plans, multinationals and benefits providers will have to deliver the right benefits or risk being left behind. To download a copy of MAXIS GBN’s discussion paper “2045: the future of work – the changing face of employee benefits” please visit: https://www.maxis-gbn.com/futureofwork/?utm_source=GBV&utm_medium=article&utm_campaign=future-of-work References Tamini Law, https://www.tamimi.com/law-update-articles/compulsory-health-insurance-touches-down-in-dubai/#:~:text=Employers%20are%20required%20to%20put,attempts%20to%20do%20so%20seriously. (source June 2020) MAXIS GBN, "2045: The future of work – the changing face of employee benefits" (sourced June 2020) Cake & Arrow “Insurance in the age of the gig economy” (sourced September 2019) Emily Neil, Al Dia news https://whyy.org/articles/what-comes-next-for-philadelphias-domestic-workers/ (sourced June 2020) MAXIS GBN, “In the changing world of employee benefits, does one-size still fit all?” (2019) Melisa Sweet, The Guardian https://www.theguardian.com/australia-news/2020/may/13/the-genie-is-out-of-the-bottle-telehealth-points-way-for-australia-post-pandemic (sourced June …

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16 July 2020IBIS 2020: Intersections, Celebrating the 50th anniversary of the IBIS Academy

During the week of 11-15 May 2020, global benefits, HR, and mobility professionals took part in one of the most prestigious and longest-running – now virtual – international HR conferences in the world. Participants, including GBV, gained insights, knowledge, and skills needed to keep their organization among the ranks of the top global employers—today, and in the future. This year’s conference was vastly different than past ones in that this was IBIS’s first virtual conference, primarily due to the novel coronavirus epidemic. Attendees gathered virtually, instead of meeting in Geneva, Switzerland where the event was originally slated to be held. The official welcome and introductions were made by Multinational Practice Leader at Gallagher, LeAnne Stefl, who gave an overview of the humble beginnings of the IBIS Academy, which started back in 1971, when 85 employee benefits specialists from the US, Canada, and Europe gathered in Brussels, Belgium, to discuss the latest trends and practices of the nascent global employee benefits industry. 2020 has presented us with many hurdles, but holding a virtual conference is testament to the agility and adaptability of all involved. Even with closed borders and travel bans, it was still possible for all participants to learn about trends and practices of global benefits, HR, and mobility, especially as they are affected by the current global health crisis. As LeAnne noted, while the venue and topics have shifted, there is still the need for guidance on best practices and tangible next steps for global employers. This year, the IBIS Academy featured two main webinars: Talent Mobility in the New World at Work, was presented by global mobility experts who offered a look at the future of work in human resources, the importance of Duty of Care relative to mobility and the pandemic, insight into what to expect from mobility and the importance of understanding tax and immigration compliance implications . Crossfire: Duty of Care, Coronavirus & Pandemics, was presented by representatives of Microsoft, Cigna, and Compassion International, who discussed the importance of Duty of Care and how their organizations handled duty of care during the initial weeks of the pandemic. Talent Mobility in the New World of Work The first panel discussion on talent mobility and the importance of agility when managing a talent program included three main ideas highlighted by the speakers: the importance of integrating talent mobility into the HR function; a focus on employee flexibility in the ever-changing workplace; and the value of compliance in an era of technology advances. Panel members were: Ema Boccagni, Commercial Director, EMEA Simon Richardson, Gallagher, Co-lead for UK Global Mobility Multinational Benefits & HR Consulting Kristin Sampson, Gallagher, Area VP, Global Mobility Multinational Benefits & Human Resources Consulting Chris Debner, Strategic Global Mobility Advisor for Chris Debner LLC Chris Debner presented the Talent Mobility in the New World of Work webinar, which dealt with the effects of the changing workplace on talent mobility, especially with regard to entirely new work practices now required by the global pandemic. This is where companies need to scrutinize their talent mobility programs to learn where to start making changes, he said. A good mobility strategy is one that encompasses an operating model, policies, and processes and technology. “Anything you do or have to operate your mobility program will fit into one of those 3 categories, and it is the strategy that is expressed in those 3 elements,” he added. Mobility teams are in the spotlight with the pandemic. “These are the people who have to address questions regarding evacuations, repatriations, and stranded business travelers.” Home office workers abroad who were not really in the realm of mobility were suddenly in focus because of compliance issues, cross-border concerns with workers and cross-border hires, halted assignments, and emergency assignments. The talent mobility team of the future should be fully integrated into HR and not a stand-alone department that operates in a silo, which compromises the HR function. A strong talent mobility program will also need to make a strategic contribution to the business, ensure compliance, and provide an employee-centric offering to the business while creating a positive employee experience. It needs to be agile enough to adapt to changing needs, as well as manage all administration with integrated technology that brings HR and employees together with all other aspects of the business. Regarding current events and what has changed with the pandemic, Chris recalled how being thrust into the spotlight has influenced mobility teams. He recounted that when speaking with multiple heads of mobility with multinational businesses in Switzerland recently, one reported having as many as 5 times as many weekly meetings with her CEO over the previous six weeks than she had before the pandemic. This underscores the importance of agility when it comes to mobility teams meeting sudden demands and having to adapt to rapidly changing needs, because it makes mobility more visible in the scheme of things. In the future, he said, we can expect a heightened sensitivity toward compliance, which is more relevant in Europe than the US right now due to cross-border work regulations, as well as a higher demand for travel security and medical support. All else is just speculation, but the key is agility and adaptability in these uncertain times when there are more questions than answers. What this all means for mobility professionals is that they must have a good mobility program. To achieve this there are some key points to observe: Don’t make it all about yourself. Mobility conferences and related activities tend to be focused only on talent mobility to the exclusion of everything else. Once a talent mobility team realizes their role as being integrated into HR and the broader company at large, they can achieve so much more. The future of talent mobility lies in HR. Talent mobility needs to come out of the silo and integrate into HR. Employee experience flexibility, and options, in a “consumerized” workplace. Focus on employee and user experience. Align with your company culture. Look at options and flexibility for business and assignees. No more paper policies. Think of compliance as a hygiene factor, and that technology creates value. Compliance needs to be utilized in mobility because it creates value. Compliance needs to align with HR functions. Automate hard skills – live and work soft skills Be clear what value mix you want out of implementing new technology, such as administrative and cost savings, compliance, a better employee experience, better inclusion of other functions and technology and better data for decision making. Chris’s advice going forward is to: Be aware of your strategic contribution. Mobility can be seen as administrative compliance managers, but ultimately they largely contribute to a better employee and management experience. He emphasized that it is important to “mix and mingle” with HR and businesses. “…find out how strategic workforce planning can help you understand which countries to send employees to,” he said, and noted that if a company does strategic workforce planning, what schools are the graduates coming from? Mobility needs to sell itself, which has not been one of their strengths over the past 20 years. Chris suggested using branding to make employers aware that you have an offering that helps them bring in talent from all over the world. Mobility must reposition itself to better educating stakeholders that mobility must be involved earlier in the process. Run a strategy workshop. Look at challenges and company priorities that define the operating model, the policies and processes and what that should look like. “When you get the buy-in from the stakeholders, you can make a business case for change,” he said, “which can answer other questions when someone says they do not have a budget.” It is big bang for little effort that can start the business case for change and start things moving in an organization. “Once you lay out the right reasons and stakeholders are on your side, that is the moment when change can happen,” he said. Use the pandemic crisis as an opportunity to show how mobility teams have risen to the occasion. Show how strategic contributions to crisis during evacuations and reuniting families has been handled by your team. This is an opportunity when mobility is in the spotlight, so this is a good time to reach outside the silo. Chris offered the analogy: If HR were athletics, mobility would be the decathlon. Agility is the answer to the questions about what will come after this crisis. Crossfire: Duty of Care, Coronavirus & Pandemics The second webinar helped participants learn about the impact that COVID-19 is having on global employers and the creative solutions they are developing to support employee wellbeing and emotional health. Most importantly, they were provided with some actions that they could use immediately and during the pandemic and beyond. The presenters were: Dr. Dan Ober, Chief Medical Officer, Cigna Global Health Benefits Fred Thiele, General Manager Global Benefits & Mobility for Microsoft Lora Nolan, International Benefits Manager, Compassion International Dave Richter, Gallagher’s Global Mobility COE Growth Leader, was the moderator. Cigna - COVID-19 (Coronavirus) Where We Are Today with Dr. Daniel Ober, CMO, Cigna Global Health Benefits Dr. Ober gave an overview of COVID-19 so far, stating that it was initially identified in December 2019 in Wuhan, China as a series of pneumonias. Since then, he said, we have learned a lot and we are well on our way to identifying treatments and finding a vaccine, although that may still be a year away. While the story changes daily, this can be frustrating for people trying to plan and manage a strategy amid uncertainties about the virus. The key, he said, is agility. “We have to be very nimble and shift gears as we go.” The good news is that the percentage of those who contract pneumonia or experience organ failure is small, yet many people have no identifiable symptoms, and that is a factor in the rapid spread of the virus. Additionally, primary symptoms have evolved with the initial symptoms being cough, fever, and shortness of breath. Symptoms now include GI upsets, diarrhea, and skin rashes. There is also still controversy about testing. At the time of the webinar, there are two types: individual diagnostic testing, which tries to identify based on someone with symptoms – do they have a disease and what disease is it? – and community testing, which identifies data that allows us to build a strategy. The difference between the two will become important as we think about returning to work. There is still no definitive treatment. Antibody testing is still controversial in the scientific community; it has a place, but it is not an end-all be-all. Testing has been inconsistent in individuals with false positives and negatives, but it is still one tool we have available. “Putting it into perspective, we need to be objective,” he said. “As a physician I can’t panic and must deal with reality vs fear to meet the needs of patients, clients, and my own family.” Dr. Ober offered some perspective, pointing out that we have not seen a true pandemic since the Spanish Flu of 1918; however, every 2-3 years we see elevations of infectious medical conditions that spread throughout the world. Rapid mitigation was the key to controlling the spread and the ability to move forward to suppress them. He gave Ebola as a good example: it still exists, and it will come back but the goal is to mitigate it. Zika is similar in the amount of panic it generated, as well as SARS, H1N1, and MERS. Dr. Ober also emphasized the difference in managing COVID-19 vs. the other outbreaks. “There is a science behind managing these outbreaks and unfortunately, and in his opinion COVID-19 was not managed well from the beginning.” While we have had some recovery, we need to do better in terms of management. In terms of moving forward and learning from this experience, it is important to look at the science as we return to normal. Dr. Ober closed by saying yes, there have been 4,122,173 cases across the globe with 283,000 official deaths, but there have been 1.5 million recoveries, which is a positive light on a serious situation. There is a plateau right now, and while there are new cases, the numbers are not on an upward trajectory as they were in early February and March. Duty of Care with Dave Richter Dave Richter spoke about the challenges faced by companies when it comes to duty of care, and what it means in terms of insurance and logistics. Some of the unforeseen challenges with the novel coronavirus included the multitude of questions about insurance: Is COVID-19 testing and treatment covered? Does it cover expats and business travelers? In most cases, the answers were “yes” but when it came to local employees, they found that there were inconsistencies in local insurance plans that excluded pandemic care. Another question dealt with coverage for necessary medical evacuations and logistical issues included employees on business travel or international assignments who could not return home because borders were closed so quickly – a development that was not understood at the time. Many of these employees are still stranded. In March, people who had taken holiday vacations to other countries were stuck at those destinations without a way to return home. Another challenge was situations where jobs were offered to employees who could not travel to the new job site. The company had honored the job offer, the job had started, but the employee had to work remotely from a home country because of the travel restrictions so Gallagher had to come up with solutions to that. What was enlightening and heartening, Dave said, were the ways companies and vendors worked together to come up with flexible and out of the box solutions such as extending travel medical insurance and BTA insurance to cover trapped employees, offering travel medical insurance to employees who were trapped overseas or couldn’t get to their new job sites, and creating “Top Up” insurance solutions to cover COVID-19-related medical expenses in countries where pandemic diseases are excluded from local insurance. There are also duty of care challenges in terms of mental health and emotional support. As companies were caught up in the spread of the pandemic, they needed ways to support employee wellbeing and emotional health. By setting up hotlines to offer immediate solutions, they could provide “in the moment” support within seven days. This was a good short-term solution while the full EAP was being implemented, and also gave them the opportunity to also set up a global EAP that provides a broader range of services and can be deployed in about 60 days. Microsoft – The Role of Benefits in Pandemic Response with Fred Thiele, GM, Global Benefits & Mobility Fred Thiele presented Microsoft’s solution for dealing with the pandemic, saying that Global Benefits has been a pivotal part of Microsoft’s efforts in response to COVID-19. “I’ve never seen anything like the need that was placed at our doorstep” with the pandemic, he said, pointing out that people looked to the benefits group at the onset of the panic, and that the response at Microsoft was the “generic definition of benefits” and they found they were called quickly and frequently to the front line in a number of different scenarios. “We were confronted with questions fast and furiously,” he said, “whether we’re implementing a new health plan, when we have a couple of years of robust communications, that went out the window when we were confronted with the epidemic.” There was no luxury of time with less than 24 hours to come up with a response. He likened having a good plan to having a “strong chassis”. “If you have a strong framework of benefits, it is easier to respond than if you are making something from whole cloth.” Some of the solutions Microsoft came up with were: Providing base pay protection for retail employees after the stores closed, employees who had contracted the coronavirus, and employees who were in an at-risk group (over 60 years old with other underlying conditions) but not ill who could not do their jobs remotely (i.e., cloud data center employees). Expanding fitness reimbursement options to help equip home offices with ergo furnishings, for employees in the US and a handful of other countries with similar programs. 12 paid weeks of Pandemic School and Childcare Closure Leave (PSCCL) where schools were closed with little notice and employees could not work remotely. This leave is global and can be taken flexibly. “We did not see a mass exodus of employees,” he said, because Microsoft remained flexible and willing to work with its workforce. Back-up childcare reimbursement for non-US data center employees. (The US already has 150 hours of quality back-up care hours through the Bright Horizons program.) This was recently raised to 200 hours, but the framework did not exist outside the US at the time. It was set up within 24 hours to help serve employees at data centers. Curate “Best of Mental Health” programs and resources to help manage stress and anxiety experienced during the crisis. Provide accommodation and tax guidance for employees who work in one country but have citizenship/residency in another and wish to travel to and work from their country of citizenship/residency. Fred acknowledged that these types of accommodations don’t seem to fall under the umbrella of benefits, but, he says, “It had to be … if you think of the typical groups involved in this, they’re probably not going to own this themselves,” so it had to become a benefits matter. Compassion International – Lora Nolan, International Benefits Manager Lora Nolan presented Compassion International’s Global HR Benefits response to the pandemic and introduced their international benefits team of 3 regional benefits analysts who, along with Lora, support 3 regions and 25 countries including Africa, Asia, and Latin America and the Caribbean. In explaining that benefits and wellness are part of Compassions total rewards, and Compassion’s global benefits focus on the whole-person wellbeing. Lora emphasized the focus on the wellness structure of heart, soul, mind, and strength is based in Matthew 12:30. This approach is what Compassion offers to its employees and their families. Their motto, “We cannot give what we do not have,” is taken from a quote from Santiago “Jimmy” Mellado, CEO of Compassion International, who said: Compassion International’s mission of releasing children from poverty in Jesus’ name hinges on the holistic development of the children enrolled in our programs. Because we realize we cannot give what we do not have, we encourage our staff to be committed to their own holistic development: mind, body, and soul, to help fuel this Jesus-centered movement of flourishing child advocates, fruitful in releasing children from poverty. Lora agreed that there are many challenges common to all the presenters, but Compassion International, had particular challenges with insurance coverage providers in other countries who did not place a lot of value on policies for preventive care. Finding coverage for preventive care and testing for COVID-19 has been a challenge, she said, as well as reaching some of the remote regions they cover. Their benefits response has included COVID-19 testing 100% coverage when testing is required by government authorities or medical providers. Any costs not covered by employers’ medical insurance will be reimbursed. Also, treatments are covered for medically directed treatments per employee medical insurance plan as with any other illness. This, she explained, involved amending and supplementing medical plans for each country. Benefits analysts reviewed each plan closely, making addendums when needed for this specific pandemic, which they could do because they already had a TPA plan and had the flexibility to recognize the situation and specify in the contract. Others rose to the occasion and were proactive in insuring coverage for COVID testing or any ensuing illness. In the case of non-coverage, Compassion reimburses the employee to make them whole, but this presents a challenge with an involved amending claims reimbursement process with finance for self-insured claims. This was to accommodate employees’ available technology at home, and they wanted to make sure claims were processed in a timely manner. All these details were coordinated between the claims analysts and local brokers, who showed strong support during this time. Spiritual and mental support was covered 100% and they were implementing several levels of resources to supplement local Christian pastoral counseling for CI employees and their families. Much of this counseling had to be done face to face because virtual meetings had not been set up yet. The Mental and Emotional Health Counseling crisis hotline was being implemented at the time of the conference. This is a counseling network that is available through local medical plans that are currently being enhanced for virtual options with the help of regional benefit analysts and local brokers. Lora emphasized their partnership with local brokers and stated that brokers helped to find additional virtual providers and coordinate coverage between borders. Compassion International appreciates the relationship with Gallagher and all the local brokers in the countries they serve. Compassion is also providing everyday wellness support through their Global Wellness Platform, a great new resource powered by Virgin Pulse. The platform was already in place for US employees in March, and they deployed it to the international population during the crisis. The platform allows Compassion employees to connect globally and even participate in challenges between groups, countries, regions, or even globally, while it promotes healthy habits, COVID-related tips, employee information covering working from home, keeping healthy, etc. Lora also said that they will have a new global EAP for July 1, and that it has been a challenge to find one that could operate in all of the languages and contexts required for their employees. In terms of spiritual counseling and support, the organization is still looking for virtual options for Christian Counselors, local church and pastoral care, and the Compassion’s Chaplain’s Office. Dave Richter: Things to consider in the upcoming days Dave Richter returned to wrap things up with a look at June and beyond. COVID-19 is here to stay for a while, yet most of the focus from clients is on when they will be able to return to work and/or return to operations. Just as the initial response to the pandemic required creative solutions, returning to the workplace will be equally challenging. Some things to consider include: Employees and the implementation of policies and procedures by role and function. If someone can do their job remotely, it makes sense for them to continue, but if people need to return to the office, we need to do that safely. We need guidance from medical professionals who can assess what our needs are relative to pre-return to work questionnaires, testing, temperature screening, social distancing, incident response, etc. Depending on industry and geography different approaches may be required Travel safety – when will it be safe to travel and to where? Facilities & Equipment – Sanitation, Life Safety, Building System and Social Distancing Input from industrial hygienist working with internal engineers. Finally, communication will be key as you return to work. Companies need to make sure their communications with customers, clients, and the public about how they are handling the changes are clear. As businesses reopen, their commitment to duty of care will protect employees, customers, and the community. Back to (the new) normal! IBIS will return in 2021 for its 51st edition in the time-proven, familiar one-week in-person format and will be held in Dubrovnik, Croatia, 24-28 May …

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16 July 2020Interview with GEB’s Eric Butler on The Response To Covid-19

On GEB’s Response To Covid-19 And The Steps Being Undertaken To Ensure Cover For All Global Benefits Vision: Good afternoon, Eric, and thank you for sharing your “view from the trenches” as the Covid-19 situation unfolds across the globe. How did you respond to Covid-19 from the GEB network perspective? Eric Butler: Our first concern was the welfare of our clients. We looked at local policy language and coverages for possible exclusions of pandemics, and fortunately most policies did not have such exclusions, but when there were such exclusions¹, we worked with the local GEB Network Partner to consider a waiver. That was the first, important step: making sure that every employee affected by COVID-19 was insured and covered. We then explored how to make available to clients two relatively new services that were particularly well suited to the situation at hand, namely telehealth and mental health services. Telehealth, i.e. remote access to a doctor, was important because people were supposed to move about as little as possible due to the lockdowns, meaning that any visit to the doctor could, perhaps, be problematic. Furthermore, emergency wards, as well as general practitioners in some places, were overwhelmed and therefore, medical attention was difficult to access in a timely fashion, or even severely rationed. Therefore, telehealth is a great way to have a convenient, safe, and quickly accessible service, and of great use to beneficiaries. The Covid-19 crisis also caused many health authorities across the world to lift regulatory hurdles that prevented widespread use of telehealth capabilities. In addition to telehealth, providing mental health support is important to help beneficiaries and their families deal with anxiety caused by Covid-19 itself, and by its potential consequences, particularly from an employment and financial standpoint. GBV: Once GEB helped network partners and clients across the globe consider such services, did you at GEB headquarters see anything in the numbers? EB: We started looking at incoming claims data to assess the financial impact of the Covid-19 crisis on insurers and on employers, especially those with profit-sharing or self-insured policies. As of the end of May, however, it is still too early to draw any conclusions. Most of the Covid-19 treatment around the world is being handled by public health systems, or at least partially covered by some form of social security. If a medical claim is involved, those will only trickle down to private insurance policies in the weeks and months following. In those instances where beneficiaries have private health insurance only, claims take time to be submitted, paid and then reported to us. As we run a Benefits Network we act more as a reinsurer, and the local insurance partners submit claims data to us only quarterly. Then, there are coding issues, making it possible that we find it difficult to know whether a certain claim pertains to Covid-19 or not. Generally speaking, identifying claims as being Covid-related could be challenging, not least because patients are not universally tested for Covid, but the illness results not only in flu-like symptoms, but it also can have longer term respiratory consequences; and doctors have discovered it can affect organs, result in strokes, and we probably will discover further adverse consequences, or manifestations, of Covid-19 in the future. To compound the identification issue, there was generally experienced in many markets a bad flu season before the Covid cases began, so there inevitably could be some degree of misclassification of actual Covid instances, as well as of regular flu cases mistaken for Covid. GBV: What about potential longer-term consequences − specifically, do you see Chronic Fatigue Syndrome (CFS) cases cropping up in the data or in the reports from your local partners? EB: CFS still is very much a question mark. First, CFS is rare and often thought by some medical professionals as possibly a mental health issue. Moreover, CFS is hard to diagnose because it can be confused with depression, whereas it really is a different condition. In the end, CFS diagnoses often arise from an exclusion of all other possible causes for the set of symptoms at hand. For all these reasons, we are not aware of Covid-driven CFS cases either in our medical or disability claims data. To compound the issue, in many countries, most of the data is with public organizations such as hospitals or social security and never reaches us. So, we may never know for sure. Speaking of potential disability cases arising from Covid infections, there is more to it than just CFS. Despite comorbidities associated with Covid still being largely unknown, we do know that we will be seeing familiar issues such as post-ICU trauma, which can result in temporary, and even permanent, disabilities. It is important to think about it now − not that we can do much in terms of preventing such disabilities. But the crisis has demonstrated that working from home is feasible on a much larger scale than previously thought. And, as it requires less energy than working in an office, especially when considering the daily commute, it is likely that people with certain disabilities might still be able to carry on with their jobs later from home, which is good for them, good for employers, and good for society at large. It the end, we think that the cost of Covid-related claims might not necessarily turn out to be a huge one in many countries, as far as employer-based health plans are concerned. Furthermore, COVID-related excess mortality affects older people mostly, who no longer are employed and enjoying benefits packages. Therefore, group death coverage may be less affected. For group disability and mental health coverage, it is too early to say, and we need to keep a watchful eye on new claims as the situation unfolds in the coming 1-2 years. GBV: Thank you Eric and we will be sure to reach out again for updates on Covid-19 from the perspective of a global benefits network.  Note from the Editor: this remark refers to employee benefits, as opposed to business interruption or other property/ casualty …

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16 July 2020The Best Compliant Model for Expatriates

Pasquale Gorrasi There is no doubt about it, Global mobility is complex, however with the right help and support, mobile benefit plans do not need to be. Pasquale Gorrasi, Director – International Lines, GEB, talks about why the GEB Network’s new and innovative ‘Best Compliant Model’ offers the benefits consistency that Mobility Managers need. The field of global mobility has seen dramatic changes in the strategic deployment of expatriates, changes in assignment types, and demographic changes in the profile of expatriates. Difficulties in implementing talent strategy and increasingly diverse globally mobile workforces represent some of the challenges faced by Global Mobility Managers. Human capital risk is huge and ever growing. Business success depends on having the right people, with the right skills in the right place at the right time. In today’s prevailing environment of high turnover and skills shortages, the need to proactively build a strong talent pipeline, developing your future leaders and encouraging them to stay is key. Against this backdrop, having the right employee benefits in place is essential. Consider this: 73% of workers say health and wellbeing programmes are a consideration in deciding whether to work for a company¹. This is especially the case when skilled professionals are employed to work outside their home country, often accompanied by their families. They have a common need for global coverage and benefits that are often unavailable through their home country or host country plans. The challenge for Mobility Managers is to ensure consistency of benefits provision across their entire globally mobile and expatriate population. This is complicated for various reasons, including the fact that a typical mobile benefit plan involves several geographies, with several jurisdictions, all with different compliance requirements. For these reasons, the non-admitted business model traditionally represented the norm. Now GEB is offering a new approach/solution. Issues surrounding non-admitted business Over the years, the rules and regulations governing non-admitted insurance have become to represent a grey area due to the large differences among jurisdictions. While some jurisdictions explicitly allow non-admitted insurance, some are silent, and others specifically prohibit it. Consequently, non-admitted insurance is no longer serving globally mobile insurance needs with the same level of efficiency. That said, it still has a place in very specific situations. New response Our new model solves this conundrum. GEB Network’s worldwide presence has allowed GEB International Lines to design and implement what we have termed the ‘Best Compliant Model’ for international expat plans: from using one policy covering everyone to multi-policy arrangements. We work with our key network partners to offer the best compliant solutions. The non-admitted solution is still available as part of a multi policy set-up. The Best Compliant Model consists of: Providing one integrated solution across geographies. Maximising admitted coverages. Minimising non-admitted insurance. Aiming for a high degree of harmonisation of terms and benefits. Centralising plan set-up and information management. Allowing for financial synergies. Truly tailored solutions GEB International Lines tailor programmes to meet clients’ requirements. We offer a wide range of customisable life and disability group insurance solutions on a Worldwide and Pan European basis. We also offer a modular international healthcare and travel product and a flexible, portable international retirement and savings plan. By partnering with GEB International Lines, you can easily adapt to different contexts and regulatory requirements, taking advantage of our network ability to bridge global governance, control and centralised pricing, with adaptability to local conditions and full local …

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30 June 2020Issue 049,
June 2020

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16 June 2020Advanced tools for financing Employee Benefits globally

Moritz Löschner There are excellent opportunities to improve the financing of insurable Employee Benefits (EB) globally and tangible initiatives to support local subsidiaries and their employees with the execution of a global EB strategy. In this article you will find an updated comparative analysis of the most common global EB solutions (traditional EB Pooling, alternative risk financing with EB Captive solutions and the innovative concept of Global Underwriting (GUW) for EB insurance), a more detailed view on GUW and EB Captive as well as two case studies to show how global EB solutions can support the execution of global EB strategies in practice. This article assumes some familiarity with financing EB globally and therefore does not focus on traditional EB Pooling but is concentrating on the more advanced solutions EB Captive and GUW instead. To create a common understanding, we align terminologies for this article as following: Life insurance (insurable Employee Benefits): Insurance to protect your employees and the relevant covers are mainly: Life, Disability, Accident and Medical insurance with sub-covers (e.g. premium waiver) and more. Non-Life insurance (Property & Casualty insurance): Insurance to protect your company’s assets and the relevant covers are mainly: Property, Liability (Product and General), Motor Fleet, Engineering Lines, Marine, Professional Liability, Directors and Officers, Commercial Crime and more. Global Underwriting (GUW): Global Underwriting for Employee Benefits insurance is one of the possible global EB solutions next to traditional Pooling and EB Captive solutions. GUW has a centralized underwriting approach for a pre-defined portfolio of countries and local EB insurance policies. Depending on the provider you will find different names for such solution which ultimately stand for a similar concept, e.g. Global Underwriting Program, International Program for Employees, Global Risk Solution, etc. Captive: A captive insurance company (Captive) is an insurance company that is set up and owned by a non-insurance company to act as an insurer or reinsurer for the company’s own risks. Global Underwriting for Employee Benefits The arguments for a GUW solution echo the fundamental reasons for having a global EB solution; these are predominately: the stronger governance through a centrally managed approach, transparency around covers in place and costs spent, and the execution of global EB strategies. The more specific arguments for GUW result from the advantages of consolidating an entire portfolio of EB policies which creates large scale and diversification of risk immediately; these are mainly: the upfront cost savings, improved terms & conditions, access to enhanced services and reporting as well as the long-term relationship with one preferred insurance partner. GUW - Financial view From a technical insurance point of view the pricing of EB risks at global portfolio level is beneficial because of the diversification of risk and the large scale which allows the insurer to have a more positive view and ultimately provide better terms & conditions. This mostly translates to upfront discounts (recent market experience shows the possibility for rate reductions in the range of 0% and 15%) which then are also secured for multiple years (typically two years or three years) via rate guarantees on program level. Such rate guarantees multiply the annual cost savings over the years and make it an interesting long-term business case, also considering budget planning with the cost stability on the reduced cost basis. An increasingly important aspect for the corporations is in the cash-flow dynamics because EB Pooling dividends are not guaranteed; if there is a dividend then the payment has a time delay, and the local subsidiaries don’t benefit directly from such dividend payment. This is not new and simply the result from the concept of traditional EB Pooling where the local subsidiaries pay the annual premiums in the beginning of the insurance period (or in several installments depending on local market practice) but only after the end of the insurance period and further, after the consolidation and accounting process of the EB Network the dividend is calculated and paid out (all in all this is ca. 18 months after local premiums are paid). In addition, such dividend payment is mostly addressed to the headquarter of the corporation. So, bottom line the amount and even the dividend payment itself is uncertain as it is ultimately the result from a retrospective global profit share calculation and depends on the claims experience of the EB Pool in each year - where “one bad apple” can destroy the entire result of the pool. The concept of GUW is solving these cash flow issues because the discount is upfront and guaranteed (no time delay and no uncertainty) and there is a direct benefit for the local subsidiary. GUW - Operational view Traditional EB Pooling and EB Captive solutions foster the inclusion of local policies one by one on a “policy by policy” basis. Each individual opportunity is either proactively triggered by the corporation’s HQ, the insurance provider or the global broker/consultant; or reactively taken up after the opportunity arises from local market dynamics between the local subsidiary, local insurer or local broker level. The efforts to grow a sizeable program with such approach are enormous, to foster, assess, win and implement each policy on an individual basis. The concept of GUW is improving these inefficiencies because it is consolidating a pre-defined portfolio of local policies at the same time (e.g. 10, 20 or more countries and policies). This portfolio is assessed together and then placed at once with one selected global EB network. Therefore, from an operational point of view GUW can be classified as the most centralized global EB solution; centrally driven by the corporation’s HQ leveraging the scale and buying power of the global organization and with a “top-down” approach towards the placement of local EB insurance policies. However, the local benefits design is a very individual subject and influenced by local HR strategies, social security systems, local regulations, as well as local market practices and therefore normally remains within the responsibility and authority of local HR whilst the GUW concept is predominantly focusing on the placement and provider selection. GUW - Challenges and recommendations to run a successful GUW The right customer profile for a GUW is key for a successful business case and this solution is suitable for large multinational companies with a centralized approach towards EB insurance. The corporation’s HQ should have the ability and willingness to influence local decision making. A GUW solution is more effective the larger it is and therefore the insurance providers have relative high minimum requirements, such as: number of countries (min. 5 or 10), number of employees (e.g. 2,500 or more) as well as a minimum annual premium volume (e.g. USD 1m, 3m or 5m) to craft, implement and administer such GUW solution. Data for GUW To enable the insurance providers to conduct a global underwriting assessment and to make an upfront commitment on the pricing they will request detailed information from the corporation about each policy which shall form part of the GUW portfolio in scope. For a binding proposal the insurance providers would normally request the following information: coverage, benefit design outline, incumbent local insurer name, local broker name, renewal date, headcount (current year, and previous 3 years), financials over the previous 3 years (premiums, claims occurred, brokerage, etc.). It is challenging to gather this information from the subsidiaries around the globe and in practice this granularity of information can only be available if the corporation has already a very centralized approach towards EB insurance, or the corporation is willing to sponsor in a central project with dedicated resources to collect such data, or a Global Broker of Record (GBoR) is well established and thus the corporation can have this data available via the broker. The advantage of organizing the data collection via a GBoR is that such data collection normally is of high quality, verified and already in the format needed by the insurance provider. The data collection will have an initial central cost (internal or external), but the business case shall pay back quickly considering cost savings from rate reductions and the long-term rate guarantees. Implementation – central decision making Local subsidiaries are not used to and, in some instances, also not comfortable with the new approach that decisions about the placement of EB insurances are taken centrally by the corporation’s HQ. Therefore, GUW requires a strong central mandate, ideally supported by top management to enable the central team to be in the position to influence local EB insurance placements. It is best practice to summarize the GUW concept and the global group objective / mandate in a one pager which is then signed by top management, ideally signed by Group Head HR and Group CFO or Group Head of Treasury. A GBoR can be very valuable to support the implementation of a GUW solution because the local brokers are an additional key stakeholder in such implementation, and it is certainly better (when not even crucial) to be aligned with them. The GBoR drill down the strategy and message in their own organization and seek support “on the ground” from the local broker for the overall communication with the local subsidiaries but also to verify and create confidence that the new provider and the agreed terms & conditions are a viable alternative to the incumbent solution from a local point of view. The upfront discounts and additional improved terms & conditions arising from the GUW are a strong incentive for the local subsidiary to join the program. Further, there should be a “no worse terms” objective to monitor that local subsidiaries have no disadvantage to join the program. Geographical scope and insurance covers There is no need to include all subsidiaries of the corporation into a GUW solution and it is even beneficial to focus on 10, 20 or 30 key subsidiaries and countries instead. The countries in scope should have high premium volumes (e.g. USD 50k, 100k annual premium and more) with focus on Life, Disability and Accident insurance covers, as these are the covers with most potential for rate reductions. There are countries which are easier to switch than others because of local market dynamics, e.g. in some countries the unions or workers councils have strong influence on the local provider selection and this can be a challenge for a central decision making. The best approach is to have an open dialogue with the broker/consultant or insurance provider regarding which countries are suitable for a first wave of implementation and then other countries can always be added in a second or third wave. Medical schemes can form part of a GUW program but one should not expect rate reductions on these risks in general. Medical schemes are normally priced with low margins and often break-even or even loss-making when medical inflation is high (e.g. in several developing countries the medical inflation is above 10%). There can be exceptions, and it depends on the assessment of the combined ratios of the individual schemes, but if one of the key objectives of a GUW is a rate reduction then Medical schemes should rather be out of scope for the pricing of the GUW. Further, Medical schemes can have a strong emotional factor because there is a high usage of the services and a preference for certain local medical networks. There can also be health & wellbeing programs which are attached to the insurance provider. This brings additional burdens to switch Medical schemes and can create internal politics within the corporation. Alternative Risk Financing with EB Captive Solutions There is a growing interest in recent years in expanding existing Captive portfolios to include Employee Benefits insurance covers and the captive owners are typically seeking to achieve the following added values: Premiums & arbitrage | increased premium flow to Captive with transparency on margins. Transparency | overview of premium and claims flows. Solvency II gains | diversification of risk by combining life and non-life insurance risks. Financing | improved cash flow (e.g. Pooling dividend payments are ca. 18 months delayed and uncertain) and control over pricing, costs and reserves. Governance | integration of EB plans into enterprise risk management framework. Risk management | direct benefit from data analysis and measures to improve risk. Underwriting | possibility to improve local terms & conditions. Historically, Captives participate in the risks of their company’s own Non-life insurance covers and the expansion of this concept with Life insurance (EB) is a welcome opportunity considering the advantages listed above. However, there are also scenarios the other way around where corporations establish a new Captive focusing on the inclusion of the Life insurance covers (EB) in a first step and then include Non-life insurance in a second step. Such an approach would be feasible for companies in the service sector who have high spending on the Life insurance premiums (e.g. many employees, employees in locations with high EB costs or overall very generous EB packages) but limited spending on the Non-life insurance premiums (few physical assets and limited general and product liabilities). Case study – global minimum benefits In a fatal airplane accident, a corporation lost two employees who were employed with different subsidiaries in two countries (Germany and Spain). The employee in Spain had Life insurance cover as per the Spanish standard Employee Benefits package, but the employee in Germany had no life insurance cover at all because this was not foreseen in the standard EB package in Germany. Considering the circumstances, this situation received top management attention on group level and as both deaths occurred in the same accident there was a comparison how the company can handle the situation and equally support the families of both employees. It became apparent that from a group point of view there are inconsistencies and probably unfairness on how EB insurance is covering their employees around the globe. As consequence the corporation decided to establish a GUW with a minimum level of benefits for all employees globally. The corporation made a commitment to all employees worldwide (with more than two years working with the group) to cover them with one annual salary for Life insurance. The program was implemented with approx. 20 local policies worldwide in a time frame of 18 months and Germany was one of the countries where a new group life insurance was put in place. From a cost perspective there were moderate additional costs on group level because the corporation also benefited from rate reductions in several countries as a result of the GUW exercise. Case study – Covid-19 global impact on EB insurance Over the last months in the course of the Covid-19 crisis it became apparent that in some countries and for some insurance covers there is a standard exclusion for pandemic risks in the local terms & conditions. Many corporations are seeking transparency if such exclusions are applicable in their local policies around the globe and most corporations want to waive such exclusions to make sure that their employees are covered accordingly and receive the services they need in these very challenging times. Local insurance companies are adapting quickly to the new needs with the aim of avoiding potential gaps in covers and making sure to provide the needed services for the employees. So far, we have mainly seen three types of actions: Waiver of pandemic exclusions Operational enhancements such as the temporary waiver of the requirement to provide medical evidence to support continuation for Income Protection claims Additional free benefits for death and/or hospitalization With a centrally managed global EB solution (mainly with an EB Captive but also a GUW solution) these local developments can be proactively influenced and if the global EB strategy has the objective to waive pandemic exclusions then this change to the standard local terms & conditions can be driven centrally (as long as this is in compliant with local laws and regulation). The Covid-19 crisis also caused corporations to seek regular updates around claims developments to better estimate the impact of Covid-19 on future budget planning. From a financing perspective, it can be stated so far that the experiences from SARS as well as COVID-19 have shown a counterintuitive impact on EB insurance claims experience. People will quarantine themselves, working from home and generally not go out into public as frequently or at all. For Medical insurance certainly, where insured members have minor or even serious ailments, they are unlikely to attend an inpatient or outpatient facility and thus claims experience is likely to significantly drop. There will of course be a certain rebound once we are “back to normal” as people begin to use these facilities again and the backlog of illnesses and/or injuries are presented. From a Life and Disability insurance perspective it can be estimated that the impact on claims will be low too. Given that insured employees are mainly working age and actively at work populations, the under EB insurance covered groups are mostly not in the “risk group” for Covid-19. With respect to Long Term Disability, the course of the disease is much shorter than the typical waiting (or elimination) period. Work from home and social distancing arrangements should mitigate the risk that individuals claim Short Term Disability. However, for Long Term Disability risks there are uncertainties regarding the effects resulting from Covid-19 and especially the lockdown situation with its challenging work & life environment (e.g. mental health issues, back pain, etc.). Outlook There is room for improvement to optimize the financing of Employee Benefits globally and each global EB solution (EB Pooling, EB Captive or GUW) can be the right fit depending on the objectives and the abilities of the corporation and group. EB Pooling may still be the right choice for those corporations who prefer to have a rather decentralized approach towards EB insurance but still want to have global reporting and the opportunity to get an international divided; for corporations which want and are able to have a centralized approach a GUW could be the more interesting solution because of the enhanced financial and operational benefits; and for those corporations who have a Captive setup, the inclusion of EB covers should definitely be considered, either via a “cherry picking” approach (policy by policy) or via the participation with a quota share in an entire GUW. New global EB solutions continue to evolve based on customer needs and we can see a new concept rising already which is a combination of GUW and EB Pooling. This new approach is a response to the feedback from corporations which have the desire for a GUW but do not have the central data available for the GUW pricing and further do not have the central mandate to implement such a solution. Therefore, these corporations decide to start building a portfolio of policies with one selected global provider to then switch to a GUW solution once the minimum requirements are met. The difference to EB Pooling is that this solution does not have the objective to achieve an international dividend (which requires certain margins in the local policies) and is focusing instead on most competitive local terms & conditions to motivate the subsidiaries to join the program to activate the full range of added values from a GUW as soon as …

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16 June 2020Digital Transformation: Four Critical Workplace Planning Areas Holding Organizations Back

John McLaughlin With vast technological advances over the last few years, and now the dramatic changes brought on by COVID-19, it has never been so clear that digital transformation is essential to organisational success. However, research from Aon in its 2020 Digital Readiness Report has found that it’s still a challenge for many organisations to develop and execute an effective digital strategy even though COVID-19 has increased companies’ understanding of the need to explore new working models. Eighty-four percent of respondents to a global pulse survey are looking into a change, however only 49% have started accelerating their digital transformation. One thing remains clear for organisations, however, is that workforce planning requires a broader approach that can enable the transformation needed. Only 47% of HR professionals agreed that their organisation was executing an effective digital strategy across the entire firm. For HR leaders, the continuous state of disruption caused by the breakneck changes of the Fourth Industrial Revolution – and now COVID-19 – means they’ll require a new, more flexible approach to workforce planning and development. To thrive in this continuously changing future, employers need to adapt their approach to people, jobs and rewards at the individual, team and organisational levels. A one-for-all approach simply doesn’t work anymore. But what are the key aspects of workforce planning that companies are missing out on? And what should they be looking to change to aid their digital transformations? 1. Most organisations have not defined the competencies critical to their future, nor have they established a process to assess for them. The digital future requires a new set of skills, behaviours and ways of working, but most organisations have not defined the competencies needed to compete successfully in an age of disruption. They also do not have processes in place to assess or understand digital readiness in their own people. According to Aon's Digital Readiness report, 59% of HR leaders say their organisations do not have the defined set of skills needed for their digital transformation and only a quarter of executives rated their organisation's digital transformation efforts highly and said that they have the critical competencies in place. On top of this, only 41% said their organisations knew how to identify digital talent. We’ve identified a framework for the core competencies needed for digital readiness, with three categories. The first category focuses on foundational skills - such as learnability, agility and curiosity – that are needed to prepare for digital transformation. Understanding and developing these competencies will allow a workforce to be flexible, seek self-improvement and remain open to change and novelty as companies evolve digitally. The second category is the skills critical to leading digital readiness efforts. These include championing collaboration and exhibiting a drive to lead. The final category is about the supplemental skills that digital readiness requires, including business acumen, handling data and mental endurance. Whilst it’s important to be able to identify these skills in an organisation’s workforce, it should be remembered that these critical competencies are not the same as those skills needed to use specific digital tools. 2. Organisations need to improve how they support their virtual teams, but there are notable differences by industry and region. Since the pandemic, companies have been adjusting admirably, implementing processes and structures to deal with immediate requirements to work. Where many are struggling now, however, is supporting this new way of working and getting ready to solve medium to long term challenges. HR needs to consider, for instance, that cyber security incidents are potentially on the rise, that managers are not used to managing remote teams, that D&I processes are different in this environment but still need central oversight and that tracking performance needs different processes. Tactically, team readiness for digital transformation depends on two abilities — working in a virtual environment and working flexibly to meet the new needs of the technology. But many organisations need to improve how they support their virtual teams, with only 24% of survey respondents strongly agreeing that their teams worked in a flexible manner (before COVID-19). Indeed, there are many types of leaders and the flatter an organisation’s hierarchy, the more there is a need for leadership skills within the different teams. Where foundational digital competencies include learnability, agility and curiosity, leading change specifically needs competencies of having the drive to lead, championing collaboration, humility and empowerment. On top of this, driving a business forward requires supplemental digital readiness competencies of handling data, strategic solutioning, acumen, digital communication and, not least, mental endurance. (See graphic.) The degree of flexibility shown in our survey varied by industry with respondents at technology and telecom companies (67%) being significantly more likely to report their teams work flexibly than respondents from finance (46%) and transportation and logistics companies (39%). North American respondents (71%) were also the most likely to report being well-prepared to work in a virtual environment, likely because of existing working practices due to the size of the country. Sales presentations, for instance, are frequently done remotely, while Europe has been more traditional in this approach. 3. Most organisations are not maximising the potential of their internal talent. Largely, homegrown talent is not being sufficiently used or developed by many organisations. Only 15% say that the identification and development of internal talent forms a vital part of their digital strategy. However, developing internal talent is necessary to enable talent mobility across a changing digital environment. Organisations have an opportunity to look differently at filling talent gaps at below market rates and for hard to fill roles. Perhaps a company accountant with an affiliation for the business can become a data scientist - at a fraction of the cost it would take to hire externally. To do this, organisations need to understand how job architecture and career paths are evolving with digital transformations. In modern environments, companies can no longer offer employees a one-dimensional, upward career progression. Instead, the employee journey is more akin to a rock climbing wall - someone can move up or sideways or over to the top right corner depending on their skillset. Organisations should seek to help workers achieve greater career mobility by helping them understand their competencies, behaviours and skills that work well for the company. Organisations should also look to define individual transitions, career pathways and development plans so that they can help employees get to know their own strengths, and abilities and allow them to make informed career decisions. 4. Most organisations' rewards programmes are not designed to attract and retain digital talent. Only 34% of respondents agreed that their rewards programme helped attract and retain digitally ready talent. Looking across industries, media professionals (42%) were the most confident that their organisation's rewards programme supported digital talent. The public sector, non-profit, and education had the fewest people express confidence that their organisation had a digital-ready rewards strategy (22%). Rewards is where human capital strategy connects directly with business performance so outdated pay structures could undermine digital transformation efforts. Yet, with digital transformation comes a change in the style of work and rewards structures that will benefit a business and this must be considered when looking to a digital future. Digital transformation changes the agenda of HR leaders. A flexible workforce depends on HR empowering employees to make the best of their careers within the organisation. Without the traditional career ladder to anchor pay rises to, organisations need to find new ways to measure and anticipate which employees are going to have the biggest impact on business performance and what kinds of rewards they will most value. Organisations will need to adopt a more rigorous, data-driven approach to optimise and align a rewards programme to business objectives, market data and the needs of the workforce. There is no doubt that COVID-19 has made all businesses make significant decisions with limited information. Most have ‘made do’ in extreme situations, but there is a learning: that the unexpected happens and we need to be able to respond at speed and scale regardless of what the next disruption might be. By understanding our workforce and working models, the actual nature of another disruption won’t matter. We can adjust modes of operating in line with current capabilities and focus on building or acquiring new capabilities needed in the future with confidence. I can’t state enough the importance of confidence. There seems to be a general reluctance to change yet change can be accessible and digestible. Simple data exercises can provide a starting point to understand a potential journey, and rooting the approach in data removes uncertainty around the …

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16 June 2020Why Coronavirus Death Rates Don’t Fall as Quickly As They Rose

Danny Dorling Coronavirus deaths shocked us with how rapidly they rose from a base of none at the start of the year, to many thousands within the space of mere weeks. At the peak for England and Wales on April 8, more than 1,300 people died in a single day (as revealed later when all death registrations were reported). But the other side of the peak will look very different: death rates will fall much slower than they rose. The latest data for England and Wales shows that 44,401 people had died with COVID-19 mentioned on their death certificates by May 22. For the majority of these people, the disease will have been the primary cause of death. The first graph below shows the number of deaths daily by date of death in England and Wales as a whole. There has been no sudden break in slope. This is because the national curve is an amalgam of many smaller, local curves. Most of these local curves will be symmetrical, with deaths falling at the same rate as they rose, but with the outbreak affecting different areas, at different times, together they create the long tail we see in the graph below. To illustrate how the overall national trend will fall more slowly than it rose, I have taken all 339 local authority districts in England and Wales for which data has been released and sorted them into groups by the week in which COVID-19 deaths peaked. Doing this gives us seven groups, starting with the week of March 21 to March 27 and ending with the week of May 2 to May 8. The first such grouping is of those districts which recorded their highest number of coronavirus-related deaths in the first of these weeks. The places in which COVID-19 peaked first are a disparate set of areas, only one of which was a London borough, which indicates just how widespread the disease had become by March. They included Wolverhampton, Lambeth, Newport (in Wales), Chiltern, Fareham, South Staffordshire, Broxbourne, Erewash, Rochford, South Bucks and Tunbridge Wells. Grouping local authority districts by the week in which mortality with COVID-19 peaked helps break down the national pattern into a series of smaller, local curves. Only the first four graphs are shown as 92% of all deaths occurred in these district groupings. Each appears to be very similar to the next except that the vertical scales on each graph vary because more areas saw deaths peak in early April. The numbers of deaths in these different sets of districts rise quickly and then fall slightly more slowly over time. But they do not fall as slowly as the first graph shown in this article. The full lockdown in England and Wales began on March 24, during the week in which deaths peaked in the first set of areas shown above. People were already social distancing to some extent before that date, so we should not expect to see any sudden drop in mortality two or three weeks after that date in the graphs above, and we do not. The final graph in this series shows the regional distribution of the spread of the pandemic. The regions are sorted from lowest overall rates of mortality (south-west England) to highest (London). Rates have fallen the most in London because – by region – the disease peaked there earlier. It fell more slowly in south-east England. Slowly the pattern is becoming more clear. Deaths are falling slower than they rose, but they are falling steadily. Only very occasionally does an area report a rise in mortality and almost always, the week after, numbers fall again very rapidly. Despite fears of an immediate second wave there are no signs of this yet from the mortality data that is being released each week, and no sign that we should greatly fear one in the coming weeks. The degree of surveillance of COVID-19 is unprecedented in comparison to previous epidemics. In this article I have only considered deaths from the disease, but there is also close monitoring of hospital admissions, testing, even internet searches for symptoms. Much of this effort has been criticised as not being enough, but it should be good enough to spot a second wave beginning, if one does. As lockdown is only lifting now, many people wouldn’t expect to see a possible second wave yet. But the fact that we have not yet seen second waves in similar countries that locked down earlier than the UK, such as France, Spain and Italy, should give us some hope. The disease will fall away more slowly than it rose. But at least it is now safe to say that it is falling …

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16 June 2020The Original SARS Virus Disappeared – Coronavirus Won’t Do the Same

Connor Bamford British cancer doctor Prof Karol Sikora recently claimed that the current COVID-19 pandemic would “burn itself out”. His thinking is that if there are more infections than we realise, and that those milder, unrecorded infections result in robust immunity, then this would quickly lead to “herd immunity”, leaving the virus nowhere to go but extinct. Extend this to the world’s population and the virus eradicates itself. But the idea that letting the virus run wild would protect us is unlikely to be valid. The antibody results coming in suggest that only a small proportion of people have been infected by SARS-CoV-2. In the UK, only an estimated 6.8% of people have had the virus; for France, the figure is just 4.4%. This means that we are far away from achieving herd immunity. It also suggests that the virus does indeed have the relatively high fatality rate that we’ve estimated. This raises doubts that letting the virus burn itself out would be a sensible, safe and ethical answer to the COVID-19 problem. It would be safer to imagine a future where we can live side by side with SARS-CoV-2. Yet the virus that caused the original Sars disease – SARS-CoV-1 – no longer haunts us. What can its disappearance tell us about the likelihood of living in a world without SARS-CoV-2? Why the original Sars disappeared It was evident by early 2004 that the Sars outbreak had ended. Starting in 2002, this epidemic lasted about one and a half years, infecting at least 8,000 people and killing 10% of them. Although it mostly affected east Asian countries, by its end Sars had spread worldwide. In the midst of the turmoil, there were fears that Sars could become a serious pandemic. The virus was passed on by respiratory transmission, had spread internationally and had the ability to cause significant disease. In its final days, the outbreak bounced between humans and animals in wet markets across China. There would be a couple of smaller outbreaks linked to laboratory-acquired virus transmissions, but nobody would die from these. Why did the original Sars epidemic come to end? Well, SARS-CoV-1 did not burn itself out. Rather, the outbreak was largely brought under control by simple public health measures. Testing people with symptoms (fever and respiratory problems), isolating and quarantining suspected cases, and restricting travel all had an effect. SARS-CoV-1 was most transmissible when patients were sick, and so by isolating those with symptoms, you could effectively prevent onward spread. Nearly everybody on the planet would remain susceptible to Sars in the decades following its disappearance. Enter COVID-19 It is clear that our response to SARS-CoV-1 led to the extinction of that lineage of viruses in humans. But we also knew that very similar viruses continued to exist in bats. It’s possible that a very closely related Sars-like virus could emerge in the not-too-distant future. Of course, this is what happened in late 2019, when SARS-CoV-2 jumped into humans. In a few short months it had erupted into a pandemic, infecting millions of people worldwide and killing around 1% of those infected. While this new human coronavirus is distinct from the original Sars virus, it is related. In a similar timeframe to the original Sars, SARS-CoV-2 has proved to be more contagious but seemingly less deadly than its cousin was nearly 20 years ago. An additional – and critical – concern is that SARS-CoV-2 is efficiently spread before people get sick. This makes traditional symptomatic-based public health restrictions, which worked well for Sars, largely incapable of containing COVID-19. Challenges in eradication In essence, this ease of transmission means that SARS-CoV-2 is infinitely more challenging to control. We also have a poor understanding of whether catching and recovering from COVID-19 completely prevents you from catching the virus again and passing it on to others. Together, these factors mean that SARS-CoV-2 will most likely settle into the human population, becoming an endemic virus like its coronavirus cousins that are major causes of colds every winter. While we haven’t been able to watch this “post-pandemic” scenario unfold for other human coronaviruses (although we strongly suspect this to have occurred in the not too distant past), we have ample evidence that this occurs with other viral infections. Over the last 100 years or so we have had five influenza pandemics, and descendants of the most recent pandemic influenza virus (H1N1 from 2009) continue to circulate in the population more than a decade later. Given that we do not know how long natural immunity to COVID-19 lasts, nor whether it is capable of blocking infection completely or only symptoms, it’s not clear that SARS-CoV-2 could ever burn itself out. Therefore, our only option remains to suppress COVID-19 as much as possible until we have a safe and effective vaccine available to the …

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16 June 2020HPC and the Race To Understand COVID-19

Jeremy Smith In “The Hitchhiker’s Guide to the Galaxy” by Douglas Adams, the haughty supercomputer Deep Thought is asked whether he can find the answer to the ultimate question concerning life, the universe and everything. He replies that, yes, he can do it, but it’s tricky and he’ll have to think about it. When asked how long it will take him he replies, “Seven-and-a-half million years. I told you I’d have to think about it.” Real-life supercomputers are being asked somewhat less expansive questions but tricky ones nonetheless: how to tackle the COVID-19 pandemic. They’re being used in many facets of responding to the disease, including to predict the spread of the virus, to optimize contact tracing, to allocate resources and provide decisions for physicians, to design vaccines and rapid testing tools and to understand sneezes. And the answers are needed in a rather shorter time frame than Deep Thought was proposing. The largest number of COVID-19 supercomputing projects involves designing drugs. It’s likely to take several effective drugs to treat the disease. Supercomputers allow researchers to take a rational approach and aim to selectively muzzle proteins that SARS-CoV-2, the virus that causes COVID-19, needs for its life cycle. The viral genome encodes proteins needed by the virus to infect humans and to replicate. Among these are the infamous spike protein that sniffs out and penetrates its human cellular target, but there are also enzymes and molecular machines that the virus forces its human subjects to produce for it. Finding drugs that can bind to these proteins and stop them from working is a logical way to go. I am a molecular biophysicist. My lab, at the Center for Molecular Biophysics at the University of Tennessee and Oak Ridge National Laboratory, uses a supercomputer to discover drugs. We build three-dimensional virtual models of biological molecules like the proteins used by cells and viruses, and simulate how various chemical compounds interact with those proteins. We test thousands of compounds to find the ones that “dock” with a target protein. Those compounds that fit, lock-and-key style, with the protein are potential therapies. The top-ranked candidates are then tested experimentally to see if they indeed do bind to their targets and, in the case of COVID-19, stop the virus from infecting human cells. The compounds are first tested in cells, then animals, and finally humans. Computational drug discovery with high-performance computing has been important in finding antiviral drugs in the past, such as the anti-HIV drugs that revolutionized AIDS treatment in the 1990s. World’s most powerful computer Since the 1990s the power of supercomputers has increased by a factor of a million or so. Summit at Oak Ridge National Laboratory is presently the world’s most powerful supercomputer, and has the combined power of roughly a million laptops. A laptop today has roughly the same power as a supercomputer had 20-30 years ago. However, in order to gin up speed, supercomputer architectures have become more complicated. They used to consist of single, very powerful chips on which programs would simply run faster. Now they consist of thousands of processors performing massively parallel processing in which many calculations, such as testing the potential of drugs to dock with a pathogen or cell’s proteins, are performed at the same time. Persuading those processors to work together harmoniously is a pain in the neck but means we can quickly try out a lot of chemicals virtually. Further, researchers use supercomputers to figure out by simulation the different shapes formed by the target binding sites and then virtually dock compounds to each shape. In my lab, that procedure has produced experimentally validated hits – chemicals that work – for each of 16 protein targets that physician-scientists and biochemists have discovered over the past few years. These targets were selected because finding compounds that dock with them could result in drugs for treating different diseases, including chronic kidney disease, prostate cancer, osteoporosis, diabetes, thrombosis and bacterial infections. Billions of possibilities So which chemicals are being tested for COVID-19? A first approach is trying out drugs that already exist for other indications and that we have a pretty good idea are reasonably safe. That’s called “repurposing,” and if it works, regulatory approval will be quick. But repurposing isn’t necessarily being done in the most rational way. One idea researchers are considering is that drugs that work against protein targets of some other virus, such as the flu, hepatitis or Ebola, will automatically work against COVID-19, even when the SARS-CoV-2 protein targets don’t have the same shape. The best approach is to check if repurposed compounds will actually bind to their intended target. To that end, my lab published a preliminary report of a supercomputer-driven docking study of a repurposing compound database in mid-February. The study ranked 8,000 compounds in order of how well they bind to the viral spike protein. This paper triggered the establishment of a high-performance computing consortium against our viral enemy, announced by President Trump in March. Several of our top-ranked compounds are now in clinical trials. Our own work has now expanded to about 10 targets on SARS-CoV-2, and we’re also looking at human protein targets for disrupting the virus’s attack on human cells. Top-ranked compounds from our calculations are being tested experimentally for activity against the live virus. Several of these have already been found to be active. Also, we and others are venturing out into the wild world of new drug discovery for COVID-19 – looking for compounds that have never been tried as drugs before. Databases of billions of these compounds exist, all of which could probably be synthesized in principle but most of which have never been made. Billion-compound docking is a tailor-made task for massively parallel supercomputing. Dawn of the exascale era Work will be helped by the arrival of the next big machine at Oak Ridge, called Frontier, planned for next year. Frontier should be about 10 times more powerful than Summit. Frontier will herald the “exascale” supercomputing era, meaning machines capable of 1,000,000,000,000,000,000 calculations per second. Although some fear supercomputers will take over the world, for the time being, at least, they are humanity’s servants, which means that they do what we tell them to. Different scientists have different ideas about how to calculate which drugs work best – some prefer artificial intelligence, for example – so there’s quite a lot of arguing going on. Hopefully, scientists armed with the most powerful computers in the world will, sooner rather than later, find the drugs needed to tackle COVID-19. If they do, then their answers will be of more immediate benefit, if less philosophically tantalizing, than the answer to the ultimate question provided by Deep Thought, which was, maddeningly, simply …

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16 June 2020No Evidence That ECT Works For Depression

John Read Many people will be familiar with electroconvulsive therapy (ECT) as a historical treatment for “mental illness”, in which an electrical current is passed through the brain to trigger seizures, with the aim of somehow treating the illness. In fact, ECT is still being administered to about a million people each year to treat severe depression, including about 2,500 in England, under anaesthetic. The majority are women, and over 60 years of age. In a new review of the research, published in Ethical Human Psychology and Psychiatry, we suggest that there is no robust evidence that ECT works as a treatment for depression and the negative impact on patients set against any potential benefits is so appalling that ECT cannot be scientifically or ethically justified. The evidence base Despite its continued use, there have been no ECT vs placebo studies for 35 years. In fact, there have – surprisingly – only ever been 11 such studies, in which a control group has received the general anaesthetic but not the electricity or, therefore, the convulsion – and even these studies have been deeply flawed. ECT enthusiasts argue the lack of any new placebo research is because it is unethical to withhold a treatment that is “known” to be effective and which definitely “saves lives”. This argument, however, means that the dwindling number of psychiatrists still using ECT are doing so outside the parameters of science in general and evidence-based medicine in particular. In the UK, the National Institute for Health and Care Excellence (NICE) recommends the use of ECT in some cases of prolonged or severe manic episodes or catatonia where other treatment options has proven ineffective and/or when the condition is considered to be potentially life-threatening. Although some people who have received ECT do believe it has saved their lives, there is still no study evidence that ECT is more effective than placebo for depression. Many others believe it has irreparably damaged their lives. Other reviews and meta-analyses My colleagues and I have previously published several reviews of the 11 studies. These have shown that there is only very weak evidence, in some of the studies, for only a minority of patients, that ECT can temporarily lift mood slightly. The reviews also demonstrated that there is no evidence whatsoever that any such effect lasts beyond the last treatment (ECT is typically administered in a series of about eight treatments). There is also no evidence that it saves lives or prevents suicides, despite the claim by some ECT advocates that it does – a claim that is then used to justify a risk of brain damage. Brain damage has been dismissed as the wrong term but I am not sure what else to call reported persistent or permanent memory loss in between 12% and 55% of patients. It is sometimes argued that “modern” ECT is safer than it used to be, and that the memory loss is caused by the depression rather than the electricity, but there is no research evidence for either of these claims. Some have asked how come other reviews and meta-analyses conclude that ECT is effective and safe? A reasonable question that deserves an answer. The new study, co-authored with Irving Kirsch, associate director of placebo studies at Harvard Medical School, possibly the world’s leading researcher on the placebo effects of psychiatric treatments, answers this question. Besides analysing the 11 studies in greater detail than ever before, giving them each a quality score based on 24 methodological criteria, we also evaluated the only five meta-analyses ever conducted on this tiny, and deeply flawed, body of literature. To guard against bias (and I am indeed biased against ECT, because of its lack of evidence base and the damage I believe it has caused to hundreds of thousands of people) my own ratings of the 11 studies were compared to blind ratings, on carefully defined criteria, by a colleague, Laura McGrath, who had no knowledge of, or particular interest in, ECT. The five meta-analyses included between one and seven of the 11 studies and in each paid little or no attention to the multiple limitations of the studies they included. The 11 studies we looked at had a mean quality score of 12.3 out of 24 – and eight scored 13 or less. Only four studies described how they randomised subjects and then tested this. None convincingly demonstrated that they were double-blind (where neither the participants nor the experimenters know who is receiving a particular treatment). Five selectively reported their findings. Only four reported any ratings by patients. None assessed the quality of life of patients. There were other flaws including small study sizes, no significant differences with another treatment, mixed results (including one where the psychiatrists reported a difference but patients didn’t). Only two of the higher quality studies reported follow up data. We concluded that the quality of the studies is so poor that the meta-analyses were wrong to conclude anything about efficacy. There seems to be no evidence that ECT is effective for its target diagnostic group – severely depressed people, or its target demographic – older women (therein lies a broader set of issues), or for suicidal people, people who have unsuccessfully tried other treatments first, involuntary patients, or adolescents. And given the high risk of permanent memory loss and the small mortality risk, this longstanding failure to determine whether or not ECT works means that its use should be immediately suspended until a series of well-designed, randomised, placebo-controlled studies have investigated whether there really are any significant benefits against which the proven significant risks can be weighed. As Kirsch says: “I don’t think many ECT advocates understand just how strong placebo effects are for a major procedure like ECT. The failure to find any meaningful benefits in long-term benefits compared to placebo groups are particularly distressing. On the basis of the clinical trial data, ECT should not be used for depressed …

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16 June 2020COVID-19, Smell and Taste

John E Hayes and Valentina Parma In March 2020, Google searches for phrases like “can’t taste food” or “why can’t I smell” spiked around the world, particularly in areas where COVID-19 hit hardest. Still, many of us have experienced a temporary change in the flavor of our food with a common cold or the flu (influenza). So, is COVID-19 – the disease caused by the SARS-CoV-2 virus – somehow special in the way it affects smell and taste? We are researchers who study the relationships between human behavior and the sensations people experience from chemicals in daily life. Upon learning that COVID-19 might differentially affect taste and smell, we thought our expertise might be relevant, so we got to work. The flavor of food is more than just taste When people “taste” food, they are experiencing input from three different sensory systems that are knitted together to form a singular unified sensation. Strictly speaking, taste describes the five qualities we sense on the tongue, including sweet, salty, bitter, sour and savory/umami. Savory, also known as umami, refers to the meatiness of broth, cheese, fish sauce, or a sundried tomato. Other sensations from food occur via our sense of smell, even though we experience them in the mouth. Volatile chemicals are released when we chew. These chemicals travel through the back of the throat to reach smell receptors found at the top of the nasal cavity, right behind the point where your eyeglasses rest on your nose. The third sensory system involved in food flavor involves touch and temperature nerves that can also be activated by chemicals. This is known as chemesthesis. In the mouth, these sensations include the burn of chili peppers, the cooling of mouthwash or mints, the tingle of carbonation, or the vibrating buzz of Sichuan peppers. Together, these three chemosensory systems – taste, smell and chemesthesis – work to define our perceptual experiences from food. Common viral infections attack the nose more than the mouth Loss of smell is common with many viruses, including rhinoviruses, influenza, parainfluenza and coronaviruses, and it is normally attributed to nasal inflammation that restricts airflow. If your nose is blocked, it is not surprising you are not able to smell much. Typically, the other two systems – taste and oral chemesthesis – are not affected, as a blocked nose does not alter our ability to taste sugar as sweet or feel the burn from a chili pepper. With time, most patients recover their senses of smell, but occasionally some do not. Causes vary, but in some individuals, inflammation from a viral illness appears to permanently damage key structures located around the smell receptors. SARS-CoV-2 isn’t like those other viruses Since early spring 2020, firsthand reports have indicated that the SARS-CoV-2 virus, the novel coronavirus that causes COVID-19, might affect the mouth and nose more severely than the common cold or the flu. Not only were the reports of loss more frequent, but they also differed from what is normally seen. One British surgeon with COVID-19 posted a video to Twitter showing that he had lost the ability to feel the burn of chillies. Others, like Penn State undergraduate Caela Camazine, reported losing their sense of smell and taste completely without any nasal congestion. Based on the spike in Google searches, and these atypical accounts of chemosensory loss, more than 600 researchers, clinicians and patient advocates from 60 countries formed the Global Consortium for Chemosensory Research. The Global Consortium for Chemosensory Research launched a global survey in 32 different languages to better understand what COVID-19 patients are experiencing. Initial results from our survey support the idea that COVID-19 related losses are not limited to smell, as many patients also report disruption of taste and chemesthesis. Our understanding of how the SARS-CoV-2 virus can affect multiple sensory systems is still quite limited, but is advancing daily. Initial work suggests that smell disturbances in COVID-19 patients are caused by the disruption of cells that support olfactory neurons. In our noses, we have nerve cells called olfactory sensory neurons, which are covered with odor receptors tuned for certain volatile chemicals. When a chemical binds an odor receptor, the olfactory sensory neuron fires a signal to the brain which we perceive as a smell. Notably, it does not appear that the virus targets olfactory sensory neurons directly. Instead, the virus seems to target specialized supporting cells that cradle the olfactory sensory neurons. These support cells are covered with a different receptor, the ACE2 receptor, which acts as an entry point for the virus. In contrast, the way SARS-CoV-2 might directly affect taste and chemesthesis remains unknown. Will COVID-19 patients recover their sensory perception? We just don’t know yet whether COVID-19 patients will recover their sense of smell, taste and chemesthesis. Many patients have reported recovering completely within two or three weeks, while others report their sensory loss lasts for many weeks. To connect with other individuals who are experiencing smell and taste loss related to COVID-19, consider reaching out to organizations advocating on behalf of those who suffer from smell and taste loss, such as AbScent and FifthSense. Because more data are needed, we are asking for your help in our research. If you know anyone who is (or recently has been) coughing and sniffling, invite them to complete the Global Consortium for Chemosensory Research survey, which takes about 10 minutes. We want anyone who has had any upper respiratory illness (COVID-19 or not) recently so we can compare individuals with COVID-19 to individuals with the flu or the common cold. By volunteering for our study, or by spreading the word on this research study, you can contribute to better understand how COVID-19 is special in its ability to affect smell, taste and …

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16 June 2020Chronic Lyme Disease – Does It Exist?

John Nathaniel Aucott Her symptoms started quickly: neck pain, extreme fatigue and intermittent fever and chills. The woman had been healthy until then, and since she enjoyed gardening and landscaping at her rural Maryland home, she wondered if a tick bite might have given her Lyme disease although she had not noticed the telltale bull’s-eye skin lesion. Her doctor told her it was likely just a virus. The next day, she felt worse and went to the emergency room, where she was diagnosed with mononucleosis. The woman, a nurse in her 40s, returned to the emergency room a few weeks later with breathing trouble and low blood pressure. Doctors tested her for Lyme disease and found it had spread to her heart, a rare manifestation of Lyme disease that can be fatal. Antibiotics resolved her heart and respiratory symptoms, but the fatigue, as well as joint pain and trouble concentrating, continued. Doctors told her it was just the recovery process, but the symptoms were debilitating and didn’t go away. It wasn’t until several months later, when she got a second opinion, that she was diagnosed with post-treatment Lyme disease, a known complication of Lyme disease. “I felt dismissed and abandoned,” she later told me. “No one stopped to listen to my story and advocate for me.” Her experience gives insight into a highly controversial medical term: chronic Lyme disease. Because there are no definitive tests or treatments for this condition, patients who have symptoms can be dismissed by the medical establishment. Many are denied medications such as antibiotics they believe can control the chronic infections they suspect they have. I am the former chair of the tick-borne diseases working group at the U.S. Department of Health and Human Services and a medical researcher who has studied chronic Lyme disease for 20 years. It has become obvious to me that the problem is deeper and more complex than the polarized debate over the controversy would make one believe. My colleagues and I have closely followed the health of Lyme disease patients as they recover, and what we have discovered runs counter to the mainstream teaching about Lyme disease. Doctors still often don’t know how to accurately diagnose patients with Lyme disease, and patients don’t always get better, even when they are diagnosed and treated. Physicians lack the diagnostic tools for early diagnosis or for documenting cure of the disease. Studying this subgroup of post-treatment Lyme disease patients who are treated for Lyme disease but don’t get better is a clue on my way to find to understand chronic Lyme disease. While it may not provide definitive answers yet, we hope it will add to the body of knowledge about this perplexing set of conditions that are likely diverse in origin. The chronic Lyme controversy Lyme disease, first identified in the United States in the 1970s, has grown into a health epidemic as the ticks that transmit it to humans expand their range. The Centers for Disease Control and Prevention now estimates that about 300,000 people in the U.S. become newly infected every year now. The symptoms can be debilitating, including neurological symptoms, extreme fatigue and muscle and joint pain. When symptoms linger long after a diagnosed patient receives the standard antibiotic treatment, like the nurse in Maryland experienced, the patient may have a condition called post-treatment Lyme disease syndrome, a subset of chronic Lyme disease. Many experts in the field estimate about 10% to 20% of patients diagnosed with Lyme disease get this syndrome. The controversy around chronic Lyme disease emerged when patient advocacy groups and some doctors began to use the term to describe patients who had nonspecific symptoms such as fatigue and pain, and testing did not always show that they had been exposed to Lyme disease. At the heart of the controversy is the question: Can a person have a chronic bacterial infection that may not show up on tests? These patients are frustrated with a medical establishment whose focus is on evidence-based treatment in a field where evidence is often lacking. Without a diagnosis by the establishment, these sick patients are often dismissed and can’t get treated, leading to a sometimes toxic environment as they fight for treatment. Symptoms without evidence My training in infectious diseases didn’t prepare me for the patients I started seeing after moving to a Lyme-endemic region in 1996. Patients that I had treated for well-documented Lyme disease were experiencing chronic joint pain, neurological symptoms and extreme fatigue, yet most lacked “objective measurable manifestations” of Lyme disease, like abnormalities in blood tests or radiologic imaging evidence of tissue damage. It was, and still is, uncomfortable telling patients that we don’t know exactly what is going on or how to best treat their illness. My chronic Lyme patients were sicker and had less hope than the AIDS patients I worked with, but the underlying mechanism of illness remained elusive. Part of the challenge is the lack of definitive tests for chronic Lyme disease. After treatment with antibiotics, the bacteria that causes Lyme disease – Borrelia burgdorferi – is rarely detected, yet symptoms often continue. There are several theories about why symptoms might continue for months if not years. Some of the bacteria might be able to evade the immune system, bacterial residue might remain that trigger ongoing inflammation or a severe initial infection, delayed treatment or coinfections from the tick bite, such as babesiosis, might lead to an uncontrolled and ongoing overreaction by the patient’s immune system. Without laboratory findings, however, most doctors are uncomfortable with diagnosis and treatment of chronic Lyme disease. This may be because Lyme disease symptoms can be mistaken for those of other illnesses, such as chronic fatigue, fibromyalgia and depression. Doctors also recognize the public health risks of antibiotic overuse and the potential risk to patients from long-term antibiotic treatments. A group of doctors has championed the care of patients with chronic Lyme disease and developed guidelines for their care. Some of their practices have been criticized, especially long-term intravenous antibiotics which have the potential for serious side effects. Yet it is not uncommon for patient anecdotes and experience to report that long-term antibiotic therapy and other complementary care interventions have helped despite the lack of FDA approval or randomized trials to support their use. Diagnosing the syndrome Our research has shown that post-treatment Lyme disease syndrome can be meticulously identified in patients with previously treated Lyme disease by a constellation of quality-of-life symptoms, including fatigue, sleep disturbance, musculoskeletal pain and cognitive problems, and by the severity of those symptoms. However, the holy grail for diagnosing post-treatment Lyme disease syndrome – and sorting out chronic Lyme – would be a blood biomarker to identify the biology of the disease in patients. Molecular markers are rapidly being discovered that provide insights into the mechanisms of disease that show the potential interplay of both microbial and host inflammatory responses that may cause ongoing symptoms in previously treated Lyme disease patients. Once molecular markers are established, this will set the stage for new treatment trials. The true extent of this insidious epidemic is still unknown, but it is clear, based on my experience and work, that it no longer accurate to simply argue that chronic Lyme disease doesn’t …

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16 June 2020Antigen Tests For COVID-19

Eugene Wu In late February, I fell ill with a fever and a cough. As a biochemist who teaches a class on viruses, I’d been tracking the outbreak of COVID-19 in China. Inevitably I wondered: Did I have COVID-19, or did I have the flu? At the time, COVID-19 testing was very restricted but I knew I could get quickly tested for the flu. I drove myself to an urgent care clinic, the nurse easily checked my temperature and took a throat swab and 30 minutes later I got the results: positive for influenza. The flu test I took is a type of viral screening called a rapid antigen test that looks for viral proteins. For the flu, these antigen tests are easy to administer, decently accurate and give results almost immediately. Widespread testing for SARS–CoV–2, the virus that causes COVID-19, is critical to knowing if, when and how people can start to return to their normal lives. An antigen test for the coronavirus could be a huge help in expanding testing. On May 9, the U.S. Food and Drug Administration approved the first antigen test for emergency use in the U.S. These tests are starting to be available across the country and could dramatically change the COVID-19 testing landscape when they become widely available. What is an antigen? The human immune system, and in fact the immune systems of most vertebrates, work on a simple idea: Any protein in your body that isn’t encoded by your own genes is probably from a pathogen and should be captured and destroyed. When the immune system detects a foreign protein, your white blood cells, specifically your B-cells, create antibodies to trap and destroy these proteins. Antibodies are Y-shaped proteins that use their arms as grabbers for foreign proteins. The first round of antibodies aren’t particularly well matched to the shape of a new invading protein, but every time white blood cells make new antibodies, they tweak the shape of the antibody grabber until it fits the protein very well. The foreign protein that triggers this process is referred to as an “anti–gen” because it is an antibody generator. How does an antigen test work? Antigen tests are well named: They look for antigens. To identify these antigens, antigen tests use antibodies. You may have performed one yourself if you’ve ever used a home pregnancy test, which uses tests for an antigen called human chorionic gonadotropin in urine that is produced by the cells that surround a fetus when a woman becomes pregnant. Like the test that diagnoses influenza, the SARS–CoV–2 antigen test uses antibodies that are produced in animals to hunt for proteins embedded in the coronavirus’s surface. If the antibodies detect viral proteins in a sample, the person most likely has the coronavirus. An antigen test for SARS-CoV-2 starts with a medical professional collecting a sample of mucus from the back of a persons throat or nose using a swab. They then dip the swab into a liquid to dissolve the mucus and release the virus. The liquid is then applied to the surface of the test slide that is coated with antibodies. These antibodies are stuck to the slide and “grab onto” any coronavirus proteins that are in the sample. A second mixture of antibodies is then applied to the slide. These antibodies have been chemically modified with a dye that makes them visible to the naked eye or detectable by fluorescent light. If the sample contains viral antigen proteins, those antigens are now sandwiched by two antibodies: one that attaches them to the test kit and another that makes them visible. The more coronavirus antigen there is, the more dye will be visible, indicating that the patient is infected with SARS-CoV-2. If there is no detectable dye, this would mean the person does not have SARS-CoV-2 or that the sample did not have enough viral proteins. What are the strengths of antigen tests? The main selling points of antigen tests are that they are far faster and easier to perform than reverse transcriptase-polymerase chain reaction (PCR) tests. PCR tests – the swab tests that look for viral RNA – are currently the most common way to test for an active SARS-CoV-2 infection and can take up to four days to perform. By contrast, the most time-consuming part of the antigen test process is waiting for the antibody mixtures and the sample to mix completely. This process takes mere minutes, given the small volumes typically used in an antigen test. A COVID-19 antigen test might take only 15-30 minutes to complete and requires very little expertise. Similar tests are done routinely in clinics for influenza all the time. In contrast, PCR tests swabs must be sent to diagnostic laboratories to be performed by experienced technicians as of right now. What are the weaknesses? What antigen tests gain in speed and ease of use, they lose in accuracy. Because they look directly for evidence of the virus, there need to be a lot virus proteins available to stick to the antibodies to produce a detectable result. Depending on the virus, qualitative antigen tests likely need a sample to contain many thousands of viral proteins in order to produce a positive test. If a sample doesn’t have enough virus or a person has a low-grade infection, the test might give a false negative result – and a sick person would get told they are uninfected. The Food and Drug Administration granted emergency use authorization to a SARS–CoV–2 antigen test made by the pharmaceutical company Quidel Corporation. Quidel reports that their antigen test produces about a 20% false negative rate. That means that 1 in 5 people who actually are infected will receive a result saying they are not. At a large scale, this may result in missing many infected individuals. Can I get one? The Quidel test is not currently widely available due to production capacity. As production ramps up and other companies begin to produce antigen tests, they will become more available. Once laboratories around the country begin processing the antigen tests, public health officials will also get a better sense of the real-world false negative rate. A COVID-19 antigen test can fill an important gap in the testing landscape by providing fast diagnoses in the clinic, but they’re not perfect. Because of the somewhat high false negative rate, individual patients should be careful with how they interpret the results. But when combined with more accurate PCR tests and blood tests that look for antibodies, antigen testing has a large role to play in helping public health officials better understand and fight the spread of the …

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16 May 2020Coronavirus and Type 1 vs. Type 2 Diabetes

Jamie Hartmann-Boyce In early 2020, it seemed like people with diabetes were disproportionately dying with COVID-19, but the data provided more questions than answers. What type of diabetes did people have? Were people dying because the condition itself put them at greater risk, or because those with it tend to be older and have other illnesses? And what should people with diabetes do to protect themselves? Now, researchers are harnessing data from NHS England to address these questions – and some of their findings are unexpected. It is still unclear whether people with diabetes are more likely to catch the virus. We won’t know if this is true until sustained, widespread testing is rolled out. But we do know that a disproportionate number of people with the condition have been hospitalised with COVID-19. In the UK, data spanning February to April shows people with diabetes made up approximately 25% of hospitalised cases; that’s almost four times higher than the estimated rate of diabetes in the general population. Once in hospital with COVID-19, data also shows that people with diabetes have worse outcomes than people without. The increase in risk is striking but isn’t necessarily surprising – people with diabetes are prone to worse outcomes from infections generally, as data from flu shows. When it comes to COVID-19, early studies suggest people with diabetes are approximately twice as likely to be categorised as having “severe disease” and are more likely to be admitted to intensive care units. In England, one in four people who die in hospital with COVID-19 have diabetes. Previous studies, however, didn’t shed light on the details behind these headline statistics, and didn’t break down data by diabetes type. We now have this information, and it shows a significant – and surprising – difference. Higher risk if you have type 1 diabetes Compared to people without diabetes, people with type 1 diabetes are approximately 3.5 times as likely to die in hospital with COVID-19, while people with type 2 are approximately twice as likely. This came as a surprise to some, because, unlike type 1, type 2 diabetes is often accompanied by other diseases, typically comes on in older age, and can be associated with raised body weight. All of these factors are linked to worse outcomes from COVID-19. There are a number of possible explanations as to why outcomes are worse in type 1 compared to type 2. First, the length of time someone has had diabetes might impact their vulnerability to COVID-19. Unlike type 2, people are most often diagnosed with type 1 at a young age (I was diagnosed at ten). In people hospitalised with COVID-19, someone with type 1 has likely had diabetes for much longer than someone with type 2. The longer someone has diabetes, the more likely they are to have complications, which include damage to the heart and kidneys. Second, in type 1, your immune system attacks the cells that make insulin and you eventually stop making insulin altogether. Insulin is the hormone that helps the body process sugar in the blood. Type 2 isn’t a disease of the immune system. In type 2, your body makes insulin but is resistant to it. The immune systems of people with type 1 may be different from people with type 2, which could impact how people respond to infection. Finally, data shows that higher blood sugar levels increase the risk of COVID-19. We know that on average blood sugar levels are higher in people with type 1 than with type 2 diabetes, because of the different nature of the diseases. Blood sugar levels can be even harder to manage when fighting infections. But these are all just theories. We need more research before we know for sure how the type of diabetes impacts COVID-19 outcomes. Age is the key risk factor To illustrate this, I’m going to use myself as an example and do some crude calculations. I’m 36 and have type 1 diabetes. Most people with COVID-19 aren’t hospitalised. However, if hospitalised with COVID-19, the average 36-year-old has a 0.3% chance of dying. Because I have type 1 diabetes, my chances of dying are 3.5 times higher. That means my current chances of dying with COVID-19 once hospitalised are around 1%. However, if the average 80-year-old is hospitalised with COVID-19, they have a 15% chance of dying. So, though diabetes does increase my risk, my age still remains the most important factor, by far, in determining my chances of dying with COVID-19. My risk at 80 would still be higher than someone of that age without diabetes, so both would need to be taken into account. It is really important to note that these figures are not someone’s overall risk of dying from COVID-19, they are the risk of dying if they contract COVID-19 and if the infection is then severe enough to warrant hospitalisation. How to reduce the risk The advice to people with diabetes is to practice social distancing and handwashing like the rest of the population, to maintain a healthy lifestyle, and to try to keep blood sugars in an ideal range where possible. But aiming for tighter blood sugar control can feel daunting. Now might be a particularly difficult time for people to manage diabetes, with disruptions in care, routines, activity, mental wellbeing and diet known to create challenges. Certain groups will face more challenges than others; both COVID-19 and diabetes disproportionately affect people from non-white ethnic groups and people from less advantaged backgrounds. Support is available from healthcare providers and from organisations like Diabetes UK. Now more than ever, governments and healthcare systems need to ensure all people with diabetes get the support they …

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16 May 2020Coronavirus: Step Up Research in The Immune System

Daniel M Davis and Sheena Cruickshank Many countries are moving to exit a lockdown triggered by COVID-19, but the virus has not gone away and there are real concerns that a second wave of infection could happen. We urgently need to understand more about how the body deals with this infection and what we can do to tackle it. Immunology has taken centre stage here in revealing what happens when our body fights this virus, and brings us the possibility of treatments and vaccines. One of the most amazing things about our immune system is that it can fight germs it has never encountered before. We understand much about how this works, and this detailed knowledge seeds ideas about how COVID-19 could be tackled with a vaccine or other types of drugs, such as those that have made AIDS a disease that can be controlled. But we must be under no illusion – it will take time. There are seven known types of coronavirus that infect humans and we don’t have a vaccine against any of them. Scientific understanding of COVID-19 is moving fast. We already know that the virus enters the body’s cells through a protein on cells called ACE2. ACE2 is highly prevalent in cells that line the airway. Once inside the cells, the virus can exploit their machinery to create a viral production factory. A chain reaction builds up where new virus particles are released, which either infect more cells or can be expelled from the body to infect others. The virus mainly moves from one person to another in respiratory droplets, sent out as we cough, sneeze or talk. This can happen before a patient has symptoms, which is one reason this particular virus has spread so effectively throughout the world. ACE2 is also present in gut cells and there are reports of viral shedding occurring in faecal samples, suggesting a need for good personal hygiene, although for the moment this is only a potential route of transmission. The process of infection causes signals which alert the immune system that there is a threat to deal with. Immune cells that live in the lung airways, such as macrophages, natural-killer cells and others, deal with the infection early on. Macrophages can also help repair the damage the infection causes and recruit other immune cells to the airways too. How macrophages are activated and how they respond may be important in what happens to each of us overall. The most severe cases of COVID-19 have been associated with macrophages that produce high levels of inflammatory protein molecules called cytokines, such as interleukin-6. This early immune response probably can’t wholly eliminate the infection; we need other white blood cells to get involved. An enormous reservoir of immune cells is available, but only a few of these will be a good match to tackling this specific virus. Once the best match is established, these specific immune cells multiply. B cells make large quantities of antibody which can neutralise the virus directly and mark infected cells for attack. T cells also destroy the infected cells directly. This process of generating large numbers of the right immune cells happens in the lymph nodes, sometimes felt as “glands” which get swollen when this is happening. There are many questions about whether or not people who have had the infection are immune afterwards and how we can detect this. Tests for our exposure to the virus rely on detecting this specific activity of our immune response, in the presence of antibodies. These antibodies can reveal if someone has been infected in the past but we do not yet know if this indicates that they have full or partial protection against future infections and so an “antibody passport” may not be useful. Also, reports suggest that around 10%-20% of patients who have been infected have little or no detectable antibody in their blood and there are concerns about the reliability and validity of the antibody tests currently available. We urgently need to understand the role of antibodies, as well as other components of the immune response, and whether these can provide, or correlate with, protection against this infection. It is not yet clearly understood why disease severity varies between people. Age is an important factor, which may partly be because the immune system changes as we age. Older people are more likely to have a background low level of inflammation and are less able to mount effective immune responses to new infections. There is also evidence that an overly exuberant immune system can cause problems by directly contributing to lung damage. If the immune system gets out of control, this in itself can be dangerous and even fatal. This is why one type of therapy being tested for COVID-19 patients are drugs that dampen excessive immune responses, normally used to treat autoimmune diseases. They act by blocking the action of inflammatory protein molecules such as interleukin 6 and tumour necrosis factor. Best way out A vaccine is the best way out. For a vaccine to really work, the critical issue is whether it can trigger the immune system enough to keep us protected for a good length of time. Nobody knows yet if this is possible. You’ll already know that some vaccines induce immunity which lasts a lifetime, others need boosters, and some are needed annually. A lot plays into this; the rate the virus changes, whether antibodies are good at neutralising it, and so on. For the Sars epidemic in 2002-03, also caused by a coronavirus, we think that protection lasted about a year. Other coronavirus infections tend to induce immunity for around only three months. Also, because every person’s immune system is configured slightly differently – from a combination of our genetic inheritance, the diseases we’ve previously had and any number of lifestyle factors – each person’s immunity to COVID-19 will almost certainly vary. So much depends on our immune system: we must appreciate it more, we must step up the research, and every idea for harnessing its power must now be …

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16 May 2020The Mysterious Disappearance of The First SARS Virus

Marilyn J. Roossinck Some people question why the current coronavirus has brought the world to standstill while a previous deadly coronavirus, SARS, did not. Others have questioned why a vaccine is so urgently needed now to stop the spread of the current coronavirus when a vaccine was never developed for SARS. I study viruses and am so fascinated by their complexity that I have written a book about them. The tale of SARS and its new cousin that causes COVID-19, SARS-CoV-2, shows just how unpredictable viruses can be, particularly when they jump from animals to humans. Understanding emerging, infectious diseases needs to be a priority. SARS, which killed about one in 10 infected people, turned out to be highly lethal but ultimately, and somewhat mysteriously, disappeared. A virus takes hold SARS, or severe acute respiratory syndrome, was first noted in Guangdong province, China in November of 2002, when doctors there saw an unusual pneumonia. But the disease was not reported to the World Health Organization at that time. In February of 2003, another outbreak occurred in Hanoi, Vietnam, and a WHO officer, who later died, examined a patient there and reported a large outbreak to the WHO main office on March 10, 2003. Meanwhile, a doctor from Guangdong province traveled to Hong Kong and stayed at the Metropol Hotel, along with a number of other international travelers. The doctor was infected with what we now know as SARS-CoV-1. The virus was transmitted to at least a dozen other hotel guests. Two returned to Canada and took the virus there. One returned to Ireland, one to the United States. Three went to Singapore, and one to Vietnam. In addition, a few people were hospitalized in Hong Kong, leading to an outbreak in the hospital there. From that point, SARS spread to much of the world, although most cases remained in Asia. The virus was aggressive and lethal. Patients typically showed symptoms within two to three days. There were few reports of any infections without symptoms, as there are with COVID-19. The masks came out, temperature scanners were placed in all major public gathering places in China and other parts of Asia, quarantines were implemented, the virus infection peaked in late May of 2003 and then it disappeared. The strict quarantine measures paid off, and by July 2003, the WHO declared the threat over. In all there were just over 8,000 cases of SARS-CoV-1, and about 700 deaths. In the U.S. there were a total of just 29 confirmed cases, and no deaths. The Hong Kong economy, with a large tourism component, was severely impacted by SARS in 2003, much as the U.S. tourism industry is currently one of the most heavily impacted parts of the economy due to SARS-CoV-2. Killing cousins? SARS-CoV-1 and SARS-CoV-2 are closely related viruses. Scientists believe that both viruses originated in bats. The RNA genomes of the viruses are about 80% identical. What does that mean? Our own genomes are over 98% identical to those of chimpanzees, so 80% seems a lot less similar. For a virus though, especially one with an RNA genome, this is actually very closely related. That’s because viruses can mutate very rapidly. They make a lot of mistakes when they copy their genomes, and they make thousands of copies in a few hours. The two viruses have very similar proteins on their exterior and use the same proteins, or receptors, on our cell surfaces to enter the cell. These receptors are found in a lot of different cell types. Most studies of SARS-CoV-1 focused on the lungs, because that is where the most severe disease occurred, but both viruses can infect a lot of different organs. We won’t know how often other organs are infected with SARS-CoV-2 until there is time to do proper autopsies and fully understand the way the virus causes disease. How are they different, and how is that impacting the course of the pandemic? SARS-CoV-1 was more aggressive and lethal than SARS-CoV-2. However, SARS-CoV-2 spreads faster, sometimes with hidden symptoms, allowing each infected person to infect several others. The current estimate is about three, but we scientists won’t know the real number until we can test a lot more people, and can understand the role of people without symptoms. The most important difference is that contact tracing – or finding out who was exposed to someone infected with the virus – was relatively easy: Everyone had severe symptoms in two to three days. With SARS-CoV-2, it takes about two weeks for symptoms to appear, and many people don’t have any symptoms at all. Imagine asking someone whom they had contact with for the last two weeks! You can accurately remember most people you had contact with for the past two days, but two weeks? This critical tool for pandemic control is very challenging to implement. This means that the only safe thing to do is to maintain quarantine of everyone until the pandemic is under control. What about a SARS vaccine? Vaccine studies for SARS-CoV-1 were started and tested in animal models. An inactivated whole virus was used in ferrets, nonhuman primates and mice. All of the vaccines resulted in protective immunity, but there were complications; the vaccines resulted in an immune disease in animals. No human studies were done, nor were the vaccine studies taken further because the virus disappeared. Many factors were involved in the end of SARS-CoV-1, perhaps including summer weather, and certainly strict quarantine of all those who had contact with infected individuals, but we don’t really know why the epidemic ended. Viruses are like that, unpredictable! Many of the vaccines being developed for SARS-CoV-2 are quite different, and many use only small portions of the virus, or the virus RNA. This may circumvent the problems with SARS-CoV-1 vaccines that used more of the virus. Vaccine development has a large experimental component; we just have to make educated guesses and try different things and see what works. Hence, many different avenues for vaccines are being tested by different labs around the …

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16 May 2020Exercise May Reduce Risk Of ARDS Complication

Zhen Yan Scientists are constantly revealing newly discovered benefits of exercise. In experiments over the past 10 years, my research has found that exercise can help with a respiratory problem known as ARDS. ARDS is a type of respiratory failure characterized by rapid onset of widespread inflammation in the lungs that prevents oxygen from reaching the organs. It has been reported in many COVID-19 patients. I am an exercise physiologist with training in medicine. More than 30 years ago, I gave up my career in general surgery in China and came to the U.S. to pursue a basic research career in molecular exercise physiology, as I was intrigued by the superb health benefits of regular exercise. Most recently I’ve been thinking about the potential impact of regular exercise in preventing this deadly complication of COVID-19. I have not done any experiments specifically around COVID-19, but my work with mice may inform other researchers exploring ways to protect people that suffer from ARDS. What is ARDS? A cause of death for 3%-17% of patients infected with SARS-CoV-2 is ARDS. COVID-19 patients with this dismal clinical complication have a mortality rate of greater than 50%. Specifically, ARDS can occur when viral infection of the cells in the lungs activates the immune system and attracts white blood cells to travel through the bloodstream to the lung tissue to fight off the viral infection. However, when too many white blood cells appear in the lung tissue at once, it can cause lung tissue damage. This is because they produce too much of damaging molecules called free radicals which break proteins, the cell membrane and DNA. As a consequence, the blood vessels in the lung become leaky, causing accumulation of the fluid in the lung tissue, and the air sacs of the lung fill up with fluid. This prevents those same air sacs, called alveoli, from filling with air, blocking oxygen in the air from getting into the blood. Patients die of oxygen deprivation. The cells that line our blood vessels are flat-shaped endothelial cells. One early step in this complicated ARDS disease process is the lining of the blood vessel becomes sticky to white blood cells by making sticky proteins on the cell surface, a phenomenon called endothelial cell activation. This triggers a vicious cycle; the greater endothelial cell activation, the more free radicals the white blood cells release. This in turn destroys the endothelial cells, making the blood vessel leak more and damages lung tissue. An exercise-induced antioxidant in our body More than 10 years ago, I started to study the protective role of exercise-induced antioxidant enzymes against loss of muscle size. My research has shown that endurance exercise promotes production of an antioxidant called extracellular superoxide dismutase (EcSOD) that breaks down the free radical superoxide outside of the cells. EcSOD is the only antioxidant enzyme that is secreted into the blood that reaches other vital organs and binds to the endothelial cells and other cells through a unique binding structure of the enzyme. This makes EcSOD unlike any supplemental antioxidant pill or food rich in antioxidants that we may consume. An oral antioxidant, once absorbed into the blood, does not target a given organ to provide protection, while EcSOD sticks to specific organs. When I first saw the evidence of increased EcSOD in skeletal muscle by aerobic exercise training, I was inspired to do an experiment in which I tested whether just increasing the amount of this enzyme through genetic engineering, instead of naturally through exercise, would provide protection from various diseases in which free radicals are known to play important roles, such as muscle atrophy and heart failure. EcSOD in protection against ARDS I engineered a mouse that produced more EcSOD in skeletal muscle than would the typical mouse to mimic the effects of aerobic exercise training. We obtained clear evidence that these mice were protected from muscle atrophy and diabetes-induced heart failure. I then artificially triggered ARDS in mice by injecting mice with a chemical produced by bacteria that are known to cause this condition. To my pleasant surprise, genetically engineered mice with higher concentrations of EcSOD in their blood were far more likely to survive the severe ARDS and multiple organ failure compared with a dismal mortality in the typical mice. This mimics the situation in intensive care where more than 80% of the patients die when they suffer from the failure of multiple organs, including ARDS. I then confirmed that indeed it was the EcSOD in the genetically engineered mice that provided the protection. When I performed an experiment in which a genetically engineered mouse shared blood with a normal mouse following a surgical procedure called parabiosis, or I took blood from a mouse with high EcSOD and transfused it into a normal mouse suffering from ARDS, the normal mouse had reduced severity of ARDS and clinical blood markers of multiple organ failure. Using various biochemical and imaging technologies, we saw the evidence of reduced endothelial cell activation and reduced protein, cell membrane and DNA damage caused by free radicals in the lung tissue. Learn from exercise These studies have provided proof-of-principle evidence that delivery of the EcSOD gene or protein to elevate the amount of EcSOD in the blood and vital organs may be an effective intervention for protection of the lungs and other vital organs against damages caused by ARDS and multiple organ failure. My findings in mice may inspire other researchers to come up with innovative ways to prevent and treat the deadly complication of COVID-19. For example, future studies may identify the exercise type, intensity and duration to optimally increase EcSOD levels in the lungs and other vital organs in humans to build up the defense against deadly complications of COVID-19 or other disease conditions. Of course, the findings may inspire research to foster pharmacological, protein and or gene therapies to treat COVID-19 patients with ARDS. The EcSOD antioxidant story is just one of many about the health benefits of exercise. I believe we can learn from exercise to develop effective therapies to treat ARDS caused by COVID-19 and other disease …

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16 May 2020Working from Home? Why Detachment Is Crucial for Mental Health

Wladislaw Rivkin As an academic who regularly worked from home in the days before coronavirus, my friends often joked about what they imagined my daily routine might be (such as enjoying a morning gin and not changing out of my pyjamas). But as many people now realise, the reality is quite different. Working from home can be quite a challenge. But why? Research in occupational health psychology suggests one important answer which is all about self-control – the ability to suppress intruding thoughts, behaviours, and emotions which are not relevant or helpful for achieving a goal. Away from work, that may be as simple as refraining from eating a chocolate bar when on a diet, or sticking to a training regime before running a marathon. But while self-control leads to positive outcomes in many aspects of life, such as career success or more stable relationships, my research has also found that frequent acts of self-control can have a negative impact on mental health and well-being. What psychologists refer to as the “strength model” of self-control offers an explanation for this. It suggests that just like using a muscle requires physical energy, engaging in self-control consumes mental energy. The more we practise it, the more likely it is to lead to mental exhaustion and associated unhealthy behaviours such as alcohol consumption, snacking, or getting into arguments. Working from home can require considerable self-control. Whereas our “normal” work environments – offices, factories, shops – are set up to effectively engage in work, for many employees, home environments are not. When working from home can mean adapting to new technologies, changing forms of communication, resisting distractions from family members, pets, or mundane household activities, or keeping up motivation when the sun is shining outside. Overcoming these demands and engaging in work requires self control, which in turn depletes mental energy levels. The importance of detachment A key element of replenishing vital mental energy, and reducing the negative effects of self control is what we call “psychological detachment” This refers to the act of mentally switching off from work during time off, and requires the absence of all work-related thoughts and activities. While the simple act of leaving the office after work immediately helps detachment, this clearly becomes much more difficult when working from home. So it is vitally important to actively manage boundaries between work and non-work time to allow for that kind of detachment. To begin with, managing work time is key, as remote workers tend to work longer hours compared to office workers. Physical boundaries between the professional and domestic aspects of your life are also helpful, as is committing to time where you don’t communicate (or even think) about work, and immersive and enjoyable activities which require concentration. Here are some tips on how to enhance mental health and well-being when working from home: Set up a dedicated workspace, which should be as free from distractions as possible. Develop a schedule, which includes phases of focused work as well as breaks. If possible, divide and share times dedicated to child and pet care. Organise your email communication and reserve dedicated times for responding to emails. Try to establish simple routines which don’t require any self-control, such as a coffee break or starting your working day with an easy routine task. Set up dedicated times for work and leisure – and stick to these times. Refrain from setting impromptu goals (such as, “I will stop working once I finish this task”) as deadlines for finishing work. If possible, work in a different room than the one you spend your leisure time in. Particularly avoid working in your bedroom as it may remind you of work related issues, preventing detachment when you go to sleep. (If you don’t have the option of a different room, then try to tidy away everything that may remind you of work.) Refrain from all forms of work related communication during non-work time. Engage in absorbing activities, which capture your full attention after work. Good examples include exercise, cooking, mindfulness meditation, or focused playing with your children or pets. Generally, self-control is crucial for adapting to changes in our environment. In light of the considerable requirements now in place for self-control during lockdown, employees need to be conscious of not using up their mental resources. They need to regularly engage in “recovery experiences” including psychological detachment to maintain and enhance their mental health and …

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16 May 2020A Holistic Approach to Employee Benefits

Jimmy Johansen How companies achieve cost savings, manage their people risk and improve control of their global insured benefits. Taking a holistic view in managing their global employee benefit programs is the chosen way forward for an increasing number of multinationals that want a better overview and cost control of these programs. Many companies find that outsourcing the day-to-day handling and reporting of the insured benefits to local experts coordinated by a central team with one of the global consulting / brokerage firms is the preferred approach. Mercer introduced the concept of a globally managed brokerage agreement in the early 2000s by adding a centrally managed layer onto locally brokered employee benefit plans. The benefit plans are typically insured life, accident-, disability- and medical policies but also insured defined contribution pension and travel insurance may be included under a GBM solution. Insurance programs for expatriate employees and families is also typically managed under a GBM. In the below I will refer to such solutions as Global Benefit Management – GBM for short. A multinational company spends a significant amount of money and resources on tracking, renewing, tendering and benchmarking insured benefits programs. As a rule of thumb, a global company could spend some 15-30 per cent of their payroll costs on a broader set of employee benefits provision including some $1000 - $1500 per employee in insurance premium for the above-mentioned benefit plans, excluding US medical and any pension plans. Considerable savings could be achieved by optimizing the financing and management of these programs. Unlike Property and Casualty insurance programs that may be underwritten with a single insurer under one global master policy, employee benefit policies are more complicated to manage. These must be issued at a local country level due to regulatory requirements determined by the country in which the local employees (the risk) are located. This require local benefit knowledge and interaction with local insurance- and medical providers in order to put in place a market competitive program in the most cost effective way. Rather than relying on local internal resources that may not have the necessary benefit and insurance skillset or hiring in-house experts at HQ level, more companies is finding that entering an agreement with a global benefit consultant and broker is the most effective way of achieving effective benefit management. The setup is as described in the figure below. Local and central services Local brokerage services will consist of the following: Contract renewals, policy issue and review Claims experience analysis, negotiations with carriers, day to day servicing and issue resolution Periodic re-bidding of contracts Local recommendations Global services provided at central level to HQ will typically be the following: Single point of contact Central global coordination and tracking of all local activities Strategy/governance meeting Rules of the Road documentation Recommendations on whether to pool contracts, in conjunction with renewals Full transparency in reporting Access to Technology tool suite Global legislative updates Other services. In addition to the core services mentioned above, other services may be provided under a global broker mandate: Implementation and updating of a central benefits database Health and Wellness advice Expatriate solution advice Detailed claims analysis on a global scale Benchmarking of benefits Captive or Global Insurance feasibility study The main reasons for multinationals to consider a GBM solution is threefold; a) Improved Governance, b) Cost Savings and c) Managing people risk. The latter is more and more important, especially with the involvement of Risk and Insurance Managers as key buyers of global programmes. In the remainder of this article, I will try to explain the process of how to successfully achieve this. How to embark on a successful GBM journey In short, the multinational company selects one brokerage firm with local representation mirroring their own country presence in as many countries as possible. The selected broker is then appointed through local broker appointments in all countries in which the client operates resulting in a true global appointment unless country exceptions are agreed. Regional arrangement are also set up, often as a pilot case before going global. It is important to note that the selected broker must be able to provide consultative broker services at both local and central level beyond pure placement of insurance in each market in order to ensure the element of people risk management. Furthermore, the local broker will report local activities and advice given to the central brokerage team in the English language through on-line technology tools. This will allow the client centrally to follow the renewal process and approve any changes to the local program as needed as well as controlling premium development on a local and regional level. Through access to advanced technology tools, the client will get information and data to make informed, smart decisions on their benefit programs. Inventory, analytics, market information and compliance updates are available at all time. The governance of your global benefit programs is thus substantially improved. The GBM is typically set up under a multi-year contract period including an implementation period where local brokerage appointments are signed at the time of policy renewal with insurers. Over the contract period, the global broker will seek to streamline local programs related to cost effectiveness and provide advice on local market conditions and competitive practise along with regulatory changes and member assistance. This should happen at a pure local broker appointment as well but under a global appointment, HQ gets regular updates on the local benefit programs’ competitiveness, cost and suggestion for improvements and is in a better position to implement and follow up any corporate decided benefit policy or strategy. The providers’ central team is also in a better position to follow up that all agreed local broker tasks being performed at the agreed time. The corporate guidelines and the responsibility of the brokerage firm is documented in the “Rules of the Road”. These will be drafted at the start of the relationship at a central level outlining rules for reporting, approval and guidelines to local brokers on how the company wants their benefit programs to be managed. Obviously, a decision to select a single brokerage firm requires a certain level of central decision authority. Many local entities have a long lasting relationship with their local brokerage firm or direct contact with a local insurer that may be working well. It is therefore important for the new selected global broker that additional value be added both at a central and local level including a ‘no-increased-cost’ clause at local level. We find that where a good communication process outlining a solid business case with very limited possibilities for exceptions provides the best results. In the great majority of cases the transition happens seamlessly without major conflict between local and central Company interests. When these appear, it is important to address any local reservations in a consistent and cooperative way taking seriously any concerns and address these properly. In far the most cases, a good solution is reached in the end. We see that the best results happens when HR, Risk Management and Finance are all involved with the GBM program signalling a broad solution approach taken by HQ. We also see that a company’s Procurement or Sourcing department is now a natural partner in these appointments. An informative and clear communication to the local organization anchored at C-suite level is a key requirement for a successful implementation. Financing of benefit plans In addition to a global dedication of premium negotiation in all countries, often enhanced by the global negotiation power only exercised by the truly large global brokerage firms, an additional role taken on by the global broker is the management of the company’s pooling program or other financing alternatives. Together these represents the Cost Saving execution. We see that the great majority of pooling programs with multinational companies do not achieve their potential simply because of a lack of priority or capacity in actively managing the pools. A true active pool management with follow-up of all local policy renewals and a regular remarketing of plans is very challenging for a corporate role, as it requires direct involvement with every local renewal. This is where the global provider with a clear instruction to the local brokers through the Rules of the Road concerning pooling programs will provide value. The broker also becomes the company’s global pooling advisor. A review of the current pool program, often with several pool providers in place, is typically a first step taken already the initial year by the broker. Negotiations with pool providers and a recommendation on a new pool program going forward is then the next step. It is important to define the pool strategy whether this being to actively grow the pool(s) placing the majority of policies with the selected pool provider or using pooling more opportunistically placing the policies with the lowest bidder regardless of this being the pool partner or not. The ongoing pool management is shared between the central and local broker teams, where the local team is making sure the preferred pool provider is invited to quote at each renewal. The central team will liaise with multinational pooling network partners to obtain pooling exhibits analysing the impact of pooling and recommending to HQ whether to pool contracts or not. The central team will also interact and negotiate periodically with the selected multinational pooling network(s) on terms and conditions and review the annual pool reports. And of course; - no decisions will be made without the client being informed and involved according to the Rules of the Road. Some companies will be looking for more advanced benefit financing opportunities than pure pooling. These may be a Global Insurance Program or a reinsurance to Captive. Both these solutions would use the involvement of a global broker to perform a feasibility study, collect necessary historical claims data and make a selection of provider. For most GBM clients a Global Insurance Program will be the preferred solution given the possibility to consolidate global insurance premiums with one global provider with a multi-year rate guarantee and improved claims reporting as the strongest arguments. With a single broker handling their global insurance programs over a 3-5 year period having access to historical premium and claims, the likelihood of a positive outcome following a solid risk analysis and negotiation with global insurance providers is good. The long term planning for benefits financing and the options is illustrated below: Costs and savings Savings achieved by companies undertaking a GBM has consistently proven to be considerable. The typical savings will vary but on average, one will see savings in annual global insurance premium of 10%-12% or higher from reduction on insurance premiums and enhanced benefit financing alternatives. All premium savings are regularly documented per country and in total to HQ along with full transparency on broker earnings, whether these are on commissions or direct fees. Local brokerage remuneration through fee or commission follows standard competitive pricing at local level or sometimes with an agreed discount. The central services being the additional value add to HQ are priced according to the size of the value of all local broker appointments. In the great majority of cases, the multinational company will experience cost savings exceeding the sum of all local brokerage service fees or commissions on a consistent year-on-year basis. Conclusion There are many reasons why internal stakeholders in a multinational company are looking for ways in effectively manage their insured benefit programs. HR has a responsibility for implementing compliant, market competitive programs in accordance with their global rewards strategy and focus more on strategic HR rather than insurance placement. Finance and Procurement are taking a harder look at cost management of insurance premiums that may very well amount to tens of millions of dollars in global spending per year. Risk management are asking themselves why not limit the number of providers and set up effective global provider agreements with insurers or brokers like they are used to on the non-life side. Choosing the GBM path requires commitment, but the rewards for getting it right are extreme. Companies that implement GBM successfully stand to not only save millions of dollars each year, but will also find that they have better data and information, better management of benefits in local geographies and an improved risk management throughout the …

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16 April 2020How We Work During COVID-19

Eric Muller-Borle Publishing and running a fully digital magazine has its benefits as well as downsides. We, here at GBV, are generally used to working remotely. In fact, we have a diverse group of people who oil the wheels, based across the world, covering topics of interest for our readers. Countries where our staff are based include Luxembourg, New Zealand, France, Hungary, and the U.S. So, how has our work changed during COVID? Not a great deal, is the short answer. We have been ahead of the curve with video conferencing, our publisher, Eric Muller-Borle has been running the show online for the last 5 years now. We have a fully integrated online process to manage each monthly edition of the magazine across editors, writers, contributors, and graphic design. Each segment of the process has sub-processes and online meetings to discuss breaking trends in the sector: we are in touch with leading insurers and EB providers, who are now also facing work from home regimes, and implementing processes which necessitate social and business distancing. Some of the products we have been using to facilitate the flow of information across our organisation include Adobe Creative Cloud, Zoom, Microsoft Exchange, Bitlocker, and Microsoft Office 365 (and a working internet connection, of course). These and others are becoming more widespread and Zoom’s valuation has increased exponentially as people realise value and necessity during these times. We see how our correspondents in the industry are now working from home, using remote working tools despite confidentiality issues and overloaded telecommunications. It can be done, is the simple answer. Businesses can be run, savings can be leveraged (expensive office space can be dispensed), and functionality over form, at least in terms of processes, can be implemented. In fact, we are under the impression that most of our counterparts work harder than ever, with travel, commuting, and coffee machine chats all gone. At GBV, we have had weekly slots for each segment of the business for quite some time – coordinated by our publisher, who manages the hub of GBV completely online and remotely. Content calendar meetings, content strategy, magazine design, marketing, and publishing all require detailed task management and guidance, especially in a fast-paced world where uncertainty is becoming more common. When we launched GBV five years ago, we decided to try and dispense with physical offices. As it turns out, we never looked back. Working from home offices all around the world, using loaned meeting rooms when necessary, our only permanent physical location is a 12-square meter room with a desk, three chairs, a cabinet, and, most importantly, a high-performance file server which strangely enough, is only used for backup purposes. For daily operations, we use a combination of off-the-shelf cloud solutions, i.e. DropBox, OneDrive, and Creative Cloud. As soon as the law catches up with the reality of modern digital work, we will dispense with even that room, digitize whatever is now in the filing cabinet (accounting records and the like, I am told), and move the file server to the basement. 4 Tips for successful remote work and cooperation In essence, we have found that working remotely works well – as does flexibility (technology is still catching up with what and how we want to achieve things – which applies to large as well as small and medium organisations). And given that we have 5 years of total remote work experience, or running everything through the medium of technology, here are some tips from us: Patience: technology does have to catch up with us. We have to work with glitches that happen for no reason apart from conflicting software or overloaded telecoms. Be patient. Be organised. Flexibility: meetings are often delayed, overrun. This seems to be happening less and less as social distancing and home isolation gives us time to sit in one place and do things. Need to change: we have realised – looking from the outside as early implementers of the fully remote work environment – that acceptance of change is important. We do not waste time on meetings about meetings, but rather have learnt to be concise, utilise necessary tools and ditch the long meeting structure of corporates. The trick is: trust team members to do the right thing. Direction: organisation is the key to have remote working parts of any organisation work smoothly. Task division and allocation become more and more important (this means not general tasks, but detailed task and goal identification. And, again, trust in all team members). While these are all things that organisations are implementing now, we feel greater implementation and leveraging technology will prove to be more important as time progresses. This necessity, we have seen, is filtering into large organisations and technology providers who are innovating at breakneck speed to come up with solutions to working remotely (which is a positive step all round). Process, product, and client re-engineering is something which still needs work. Data and technology are pervasive in business, now more than ever. GBV sees this as a positive outcome of these unfortunate times. Large EB providers are publishing guidelines and advice at breakneck speed – answering calls from clients, regions and industry sectors. We feel this is all a positive step in the corporate psychology and development and encourage working more efficiently. And while it has taken a pandemic for this to happen, we do feel that complacency has given way to more cooperation among divisions of companies, and at the (very important) social level. This can only be beneficial to most industry sectors in the long …

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16 April 2020Coronavirus Might Make Buildings Sick

by Caitlin R. Proctor, Andrew J. Whelton and William Rhoads While millions of people are under orders to stay home amid the coronavirus pandemic, water is sitting in the pipes of empty office buildings and gyms, getting old and potentially dangerous. When water isn’t flowing, organisms and chemicals can build up in the plumbing. It can happen in underused gyms, office buildings, schools, shopping malls and other facilities. These organisms and chemicals can reach unsafe levels when water sits in water pipes for just a few days. But, what happens when water sits for weeks or months? There are no long-term studies of the risks and only minimal guidance to help building owners prepare their water for use again after a long shutdown. As researchers involved in building water safety, we study these risks and advise building owners and public officials on actions they can take to reduce the potential for widespread waterborne disease. A new paper highlights these issues and our concerns that the COVID-19 stay-at-home orders may increase the chance of harmful water exposure when people return. What happens when water gets old? Just like food that sits in a refrigerator for too long, water that sits in a building’s pipes for too long can make people sick. Harmful organisms, like the bacteria that cause Legionnaire’s disease, can grow. If not maintained, devices like filters, water tanks, heaters and softeners can become organism incubators. With certain pipe materials, water can accumulate unsafe levels of lead and copper, which can cause learning disabilities, cardiovascular effects, nausea and diarrhea. Drinking this water is a problem, but infections can also result from inhaling harmful organisms. This occurs when water splashes and becomes an aerosol, as can happen in showers, hot tubs and pools and when flushing toilets or washing hands. Some of these organisms can cause pneumonia-like diseases, especially in people who have weakened immune systems. Water inside a building does not have an expiration date: Problems can develop within days at individual faucets, and all buildings with low water use are at risk. Keep the water flowing To avoid water issues, “fresh” water must regularly flow to a building’s faucets. Most U.S. water providers add a chemical disinfectant to the water they deliver to kill organisms, but this chemical disappears over time. Medical facilities, with their vulnerable populations, are required to have a building water safety plan to keep water fresh and prevent growth. Schools, which have long periods of low use during the summer, are advised to keep water fresh to reduce water’s lead levels. Health agencies in the U.S., Canada, England, Europe and some states have released recommendations in recent weeks, advising that building water be kept fresh during COVID-19 stay-at-home orders. There’s some debate over the best way to do that, but the core message is the same: Do not let water sit in buildings. If water isn’t being used in a building, intentionally flushing the building to replace all the old water with new water can be done at least weekly. It also helps remove sediments that accumulate along pipe walls. Faucets, water heaters and softeners, appliances such as refrigerators, toilets and other water systems, including cooling towers, all need to have water turnover. Some of these can require specialized attention. Faucet aerators should be removed because they accumulate materials and slow down the flow. How long flushing takes depends on the building’s piping design, devices and the speed of water exiting the faucets. All buildings are different. It took more than 80 minutes of flushing to draw fresh water to the farthest faucet of one 10,000-square-foot building. In another building, it took 60 minutes just to get fresh water from the water meter to the basement of a building 30 feet from the street. A single large building may take hours or days to clear. Easier to avoid contamination than clean it up For building managers who haven’t been running the water during the pandemic, the water sitting in pipes may already have significant problems. To perform flushing, safety equipment, including masks, currently in short supply, might be needed to protect workers. A slow “ramp-up” of the economy means buildings will not reach normal water use for some time. These buildings may need flushing again and again. Shock disinfection, adding a high level of disinfectant chemical to the plumbing to kill organisms living in it, may also be necessary. This is required for new buildings and is sometimes done when water in new buildings sits still for too long. Inexpensive chemical disinfectant tests can help determine if the water is “fresh.” Testing for harmful organisms is recommended by some organizations. It can take several days and requires expertise to interpret results. Metals testing might be needed, too. Public health departments can provide specific recommendations for all of these actions and communication of risks. The need for standards and water safety Water left sitting in the pipes of buildings can present serious health risks. Standards are lacking and very much needed for restarting plumbing and ensuring continued water safety after the pandemic passes. Right now, building managers can take immediate action to prevent people from becoming sick when they …

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16 April 2020How to model a pandemic

Christian Yates Disease has afflicted humans ever since there have been humans. Malaria and tuberculosis are thought to have ravaged Ancient Egypt more than 5,000 years ago. From AD 541 to 542 the global pandemic known as “the Plague of Justinian” is estimated to have killed 15–25% of the world’s 200-million population. Following the Spanish conquest of Mexico, the native population dropped from around 30 million in 1519 to just three million 50 years later. Today we are battling to control the spread of COVID-19, which has the potential to cause the most deadly pandemic in human history. There is, however, a little known but highly successful field of science working in the background to unpick the mysteries of infectious disease. As I explore in The Maths of Life and Death, mathematical epidemiology is playing a crucial role in the fight against large-scale infectious diseases such as COVID-19. With basic mathematical models, researchers can begin to forecast the progression of diseases and understand the effect of interventions on disease spread. With more complex models, we can start to answer questions about how to efficiently allocate limited resources or tease out the consequences of public health interventions, like closing pubs and banning gatherings. Insights from mathematical modelling are vital to ensuring that authorities can prevent as many deaths as possible. As the COVID-19 pandemic escalates, here’s a look inside the modelling that experts use to try and stay one step ahead of the virus. The S-I-R model One of the simplest mathematical models of disease spread splits the population into three basic categories according to disease status. People who have not yet had the disease are labelled “susceptibles”. Everyone is assumed to be born susceptible and capable of being infected. Those who have contracted the disease and are capable of passing it to susceptibles are the “infectives”. The third group are euphemistically referred to as the “removed” class. These are the people who have had the disease and recovered and are now immune, or those who have died. These “removed” individuals no longer contribute to the spread of the disease. This is referred to as the S-I-R model. From dengue fever in Latin America to swine fever in the Netherlands and norovirus in Belgium, the S-I-R model can provide vital lessons for how to prevent diseases spreading. This model illustrates the importance of social isolation for those infected. By staying at home until fully recovered, you effectively take yourself from the infected class straight to the removed class without spreading the virus. This simple action can reduce the size of an outbreak by reducing the opportunities for the disease to pass to susceptible individuals. Whether an outbreak spreads or dies out is largely dictated by a single number which is unique to that outbreak – the basic reproduction number. Think of a population that’s completely susceptible to a particular disease – much like the global population in December 2019, at the start of the COVID-19 outbreak. The average number of previously unexposed individuals infected by a single, freshly introduced disease carrier is known as the basic reproduction number, and often denoted R0 (pronounced “R-nought” or “R-zero”). If a disease has an R0 less than one, then the infection will die out quickly as each infectious person passes on the disease, on average, to less than one other individual. The outbreak cannot sustain its own spread. If R0 is larger than one then the outbreak will grow exponentially. Exponential explosion Early estimates of the basic reproduction number for COVID-19 put it somewhere between 1.5 and 4, with a value of at least 2 in December and January. With a basic reproduction number of 2, the first person with the disease spreads it to two others, who each, on average, spread the disease to two others and then to two others each, and so on. This exponential growth is characteristic of the initial phase of the infection. If the spread was allowed to continue like this, ten generations down the chain of progression, over 1,000 people would be infected. Ten steps further on, the toll would rise to over one million. In practice, the exponential growth predicted by the basic reproduction number is rarely sustained beyond a few generations. Outbreaks eventually peak and then decline due to the decreasing frequency of contacts between infectives and susceptibles. Even when there are no infectives left and the outbreak is officially over, some susceptibles will remain. The S-I-R model can provide an estimate of the final epidemic size – the number of people infected at the end of an outbreak if no remedial action were taken. At the lower end of the estimates for COVID-19, a reproduction number of 1.5, means that 58% of the population would become infected. At the higher end of the estimates, with an R0 of 4, the S-I-R model predicts that only 2% of people would remain uninfected if no action is taken. One crucial number The basic reproduction number is helpful for understanding almost any outbreak because it wraps up all the subtleties of disease transmission into a single figure. From the way in which the infection develops in the body, to the mode of transmission – and even the structure of the societies within which it spreads – it captures all the outbreak’s key features and allows us to react accordingly. R0 can typically be broken down into three components: the size of the population, the rate at which susceptibles become infected (often known as the force of infection), and the rate of recovery or death from the disease. Increasing the first two of these factors increases R0, while increasing the recovery rate reduces it. The bigger the population and the faster the disease spreads between individuals, the larger the outbreak is likely to be. The quicker individuals recover, the less time they have to pass on the disease to others and, consequently, the easier it will be to bring an outbreak under control. Then there’s the effective reproduction number. This is the average number of secondary infections caused by an infectious individual at a given point in the outbreak’s progression. If, by intervention, the effective reproduction number can be brought below one, then the disease will die out. Case fatality rate Although crucial for disease control, R0 does not tell us how serious a disease is for an infected individual. The proportion of infected people who ultimately die from a disease is known as the case fatality rate. An extremely infectious disease such as measles, with an R0 of between 12 and 18, has a relatively low case fatality rate compared to the 50–70% of Ebola patients who will eventually die of the disease. As a result, measles is typically considered less serious than Ebola even though Ebola has a much smaller R0 of around 1.5. Early estimates indicate that the case fatality rate of COVID-19 is between 0.25% and 3.5%. It’s important to remember that the case fatality rate isn’t fixed – it depends on the responses of society and individuals to the disease, as well as on the demographics of the population it infects. For example, case fatality rates for COVID-19 appear to vary significantly with the age of the patient, with the elderly being worst affected. Perhaps surprisingly, diseases with high case fatality rates tend to be less infectious. If a disease kills too many of its victims too quickly then it reduces its chances of being passed on. Diseases which kill most of the people they infect and also spread efficiently are very rare, and are usually confined to disaster movies. Although a high case fatality rate significantly raises fears during an outbreak, diseases with high R0 but lower case fatality (think COVID-19 in comparison to Ebola) may end up killing more people by virtue of the larger numbers they infect. Controlling an outbreak One of the most effective options for reducing disease spread is vaccination. By taking people directly from susceptible to removed, bypassing the infective state, it effectively reduces the size of the susceptible population. But vaccination is typically a precautionary measure that is used to reduce the probability of outbreaks happening in the first place. Once outbreaks like the current COVID-19 pandemic are in full swing, it’s often impractical to develop and test a vaccine in a useful timeframe. Quarantine and isolation can efficiently reduce the transmission rate and, consequently, the effective reproduction number. Isolating infective patients reduces the rate of spread, while quarantining healthy individuals reduces the effective susceptible population. Both actions contribute to decreasing the effective reproduction number, which is why social distancing and self-isolation are such important strategies for tackling COVID-19. Herd immunity One idea that the UK government seemed to be toying with in the early days of their response was that of herd immunity - the concept that a large population of immune individuals can slow or even halt the spread of the disease. Surprisingly, this community effect does not require everyone to be immune to the disease for the whole population to be protected. By reducing the effective reproduction number to less than one – ensuring that infected people contact as few susceptible people as possible – the chain of transmission can be broken and the disease stopped in its tracks. Crucially, herd immunity means that people who are immunocompromised, the elderly, pregnant women and other high-risk demographics can benefit from the protection afforded by other people’s immunity. The fraction of the population that needs to be immune to protect the rest varies depending on how infectious the disease is. The basic reproduction number, R0, holds the key to how large that proportion is. The higher the basic reproduction number, the higher the immune proportion of the population needs to be. For example, for a disease with a basic reproduction number of 4, the S-I-R model predicts that three-quarters of the population must be immune. If R0 is as low as 1.5 then potentially only one-third of the population needs to acquire immunity to protect the remaining two-thirds. If a vaccine is available, then herd immunity can be achieved by vaccinating a sufficiently high proportion of the population (that said, we have only ever managed to completely wipe out one human disease – smallpox – through vaccination). When a vaccine isn’t available, the only way for people to acquire immunity is to become infected with the disease and recover. Given the case fatality rate of COVID-19, this would entail the deaths of many thousands of people. Unsurprisingly, the UK government backtracked on their proposed policy. The next generation of modelling In reality, the simple S-I-R model is not complex enough to capture the subtleties of many infectious disease outbreaks. But for diseases which confer no immunity on their victims, a simple adaptation of the S-I-R model can help. As is typical of some sexually transmitted diseases, gonorrhoea has no removed population at all. Once recovered from gonorrhoea, patients can be infected again. Since no one dies from the symptoms of gonorrhoea, no one is ever “removed” from the population. Such models are typically labelled S-I-S, mimicking the progression pattern of an individual from susceptible to infective and back to susceptible again. Since the population of susceptible people is never exhausted, but renewed as people recover, the S-I-S model predicts that diseases can become self-sustaining or “endemic”. Whether a single infection with SARS-CoV-2 (the virus that causes COVID-19) was enough to provide immunity was one of the main worries for scientists at the beginning of the outbreak. Could the novel virus circulate indefinitely in the population? Although there have been several reports of people catching the virus for a second time, there is also good evidence to suggest that recovered COVID-19 patients become immune. Another problem with the novel coronavirus is that there is typically an asymptomatic period at the start of the disease. During this time, people can harbour the virus and infect others without showing symptoms themselves. That means we need to add another class of people to the model. These are people who, once infected, are capable of passing on the disease while displaying no symptoms - the so-called “carrier” class. This changes the S-I-R model into an S-C-I-R model. The carrier class is vital for representing diseases such as HIV/AIDS, which have long infectious periods with no obvious symptoms. The state-of-the-art models that are currently being used to inform government policy are even more complicated. Unfortunately, even the most detailed and realistic of mathematical models is not capable of predicting when the current pandemic will be brought to heel. But it is certain that, when we eventually wrest control of the situation, mathematicians and their models will have played a significant role in the way in which the drama panned …

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16 April 2020Coronavirus: Ten Reasons Not to Panic

Ignacio López-Goñi Regardless of whether we classify the new coronavirus as a pandemic, it is a serious issue. In less than two months, it has spread over several continents. Pandemic means sustained and continuous transmission of the disease, simultaneously in more than three different geographical regions. Pandemic does not refer to the lethality of a virus but to its transmissibility and geographical extension. What we certainly have is a pandemic of fear. The entire planet’s media is gripped by coronavirus. It is right that there is deep concern and mass planning for worst-case scenarios. And, of course, the repercussions move from the global health sphere into business and politics. But it is also right that we must not panic. It would be wrong to say there is good news coming out of COVID-19, but there are causes for optimism; reasons to think there may be ways to contain and defeat the virus. And lessons to learn for the future. 1. We know what it is The first cases of AIDS were described in June 1981 and it took more than two years to identify the virus (HIV) causing the disease. With COVID-19, the first cases of severe pneumonia were reported in China on December 31, 2019 and by January 7 the virus had already been identified. The genome was available on day 10. We already know that it is a new coronavirus from group 2B, of the same family as SARS, which we have called SARSCoV2. The disease is called COVID-19. It is thought to be related to coronavirus from bats. Genetic analyses have confirmed it has a recent natural origin (between the end of November and the beginning of December) and that, although viruses live by mutating, its mutation rate may not be very high. 2. We know how to detect the virus Since January 13, a test to detect the virus has been available. 3. The situation is improving in China The strong control and isolation measures imposed by China are paying off. For several weeks now, the number of cases diagnosed every day is decreasing. A very detailed epidemiological follow-up is being carried out in other countries; outbreaks are very specific to areas, which can allow them to be controlled more easily. 4. 80% of cases are mild The disease causes no symptoms or is mild in 81% of cases. Of course, in 14% it can cause severe pneumonia and in 5% it can become critical or even fatal. It is still unclear what the death rate may be. But it could be lower than some estimates so far. 5. People recover Much of the reported data relates to the increase in the number of confirmed cases and the number of deaths, but most infected people are cured. There are 13 times more cured cases than deaths, and that proportion is increasing. 6. Symptoms appear mild in children Only 3% of cases occur in people under 20, and mortality under 40 is only 0.2%. Symptoms are so mild in children it can go unnoticed. 7. The virus can be wiped clean The virus can be effectively inactivated from surfaces with a solution ofethanol (62-71% alcohol), hydrogen peroxide (0.5% hydrogen peroxide) orsodium hypochlorite (0.1% bleach), in just one minute. Frequent handwashing with soap and water is the most effective way to avoid contagion. 8. Science is on it, globally It is the age of international science cooperation. After just over a month, 164 articles could be accessed in PubMed on COVID19 or SARSCov2, as well as many others available in repositories of articles not yet reviewed. They are preliminary works on vaccines, treatments, epidemiology, genetics and phylogeny, diagnosis, clinical aspects, etc. These articles were written by some 700 authors, distributed throughout the planet. It is cooperative science, shared and open. In 2003, with the SARS epidemic, it took more than a year to reach less than half that number of articles. In addition, most scientific journals have left their publications as open access on the subject of coronaviruses. 9. There are already vaccine prototypes Our ability to design new vaccines is spectacular. There are already more than eight projects underway seeking a vaccine against the new coronavirus. There are groups that work on vaccination projects against similar viruses. The vaccine group of the University of Queensland, in Australia, has announced it is already working on a prototype using the technique called “molecular clamp”, a novel technology. This is just one example that could allow vaccine production in record time. Prototypes may soon be tested on humans. 10. Antiviral trials are underway Vaccines are preventive. Right now, the treatment of people who are already sick is important. There are already more than 80 clinical trials analysing coronavirus treatments. These are antivirals that have been used for other infections, which are already approved and that we know are safe. One of those that has already been tested in humans is remdesivir, a broad-spectrum antiviral still under study, which has been tested against Ebola and SARS/MERS. Another candidate is chloroquine, an antimalarial that has also been seen to have potent antiviral activity. It is known that chloroquine blocks viral infection by increasing the pH of the endosome, which is needed for the fusion of the virus with the cell, thus inhibiting its entry. It has been demonstrated that this compound blocks the new coronavirus in vitro and it is already being used in patients with coronavirus pneumonia. Other proposed trials are based on the use of oseltamivir (which is used against the influenza virus), interferon-1b (protein with antiviral function), antisera from people who recovered or monoclonal antibodies to neutralise the virus. New therapies have been proposed with inhibitory substances, such as baricitinibine, selected by artificial intelligence. The 1918 flu pandemic caused more than 25 million deaths in less than 25 weeks. Could something similar happen now? Probably not; we have never been better prepared to fight a …

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16 March 2020Growing-the-Pie is not Pie-in-The-Sky – Investing in workers works for investors

Alex Edmans Bernie Sanders, who’s currently in the race for the Democrats’ Presidential nomination, pledged to deliver “an economy that works for all, not just the very wealthy.” On the other side of the political spectrum, and across the Atlantic, former UK Prime Minister Theresa May gave a maiden speech that promised to create “a country that works not for a privileged few, but for every one of us”. It’s easy why this message resonates. The 2007 financial crisis cost 9 million Americans their jobs and 10 million their homes. Even though the economy has recovered since then, the gains have largely gone to bosses and shareholders, while ordinary incomes have stagnated. In 2018, just 26 tycoons owned the same wealth as the 3.8 billion poorest citizens in the world. Corporations impact not only people’s livelihoods, but also their lives. In a single year, 14 Chinese workers were allegedly driven to suicide by unbearably harsh working practices at the Foxconn City industrial park, where they made electronics for U.S. giants. Traditional Management thinking – no longer fit for purpose? What’s brought us to this point? While there are many causes, one is traditional management thinking – taught in business schools and espoused in books for decades, centuries even. The conventional view is that the value created by a company is represented by a pie, which is fixed in size. So any slice of the pie given to workers means a smaller slice for shareholders. A CEO’s goal, therefore, is to squeeze as much as possible out of employees. Indeed, Henry Ford became hugely successful in the 1920s by using the assembly line to force workers to keep up with the pace of production. This pie-splitting mentality remains prevalent a century later. Amazon’s value crossed the $1 trillion mark in February, but this value may have been created at the expense of workers. Its warehouse working conditions involve long and intense hours, high injury frequency and little skill development. UK retailer Sports Direct was hauled before a government inquiry due to allegations of Victorian working conditions and failure to pay the minimum wage. Such human resource practices are highly damaging – not only to employees but, less obviously, to businesses themselves. They contribute to income inequality and social unrest, which is why politicians are fighting back with anti-business policies. Some are radical and could have serious effects on business – for example, the UK’s Labour party proposed confiscating 10% of companies and putting them in a workers’ trust. So leaders urgently need another way to manage their workforces. But the good news is there is another way. The pie-growing mentality stresses that the pie is not fixed. By investing in its workers, a company doesn’t reduce investors’ slice of the pie. Instead, it grows the pie, ultimately benefiting investors, because these workers become more motivated and productive, and are more likely to stay with the firm. The idea that the pie can be grown – that both employees and shareholders can simultaneously gain – might seem a too-good-to-be-true pipedream, so we need rigorous evidence to back it up. The evidence for a new approach That’s what I set out to do. In my new book, “Grow the Pie: How Great Companies Deliver Both Purpose and Profit”, I lay out the results of a study using 28 years of data, spanning a range of industries, on the effect of employee satisfaction on shareholder returns. Measuring employee satisfaction is tricky, because it’s a holistic concept that can’t be reduced to a simple number. Wages are important, but a company could pay high wages despite having scant attention to skills development – Ford paid his employees $5 a day, generous at the time. So, I used the list of the “100 Best Companies to Work For in America”, which randomly selects 250 employees and surveys them on 57 questions spanning credibility, respect, fairness, pride, and camaraderie. But simply showing that the Best Companies outperform their peers isn’t enough. For example, Google is perennially on the list, and has performed well. That could be nothing to do with employee satisfaction. Perhaps it’s because Google is in the tech industry, and the tech industry happens to have performed well. So, to isolate the effect of employee satisfaction, I stripped out the impact of a company industry, and many other factors that could have driven returns such as its size and recent performance. And I addressed the problem that it could be firm performance that causes employee satisfaction, rather than the other way around. After all that blood, sweat, and tears, what were the results? I found that the Best Companies to Work For beat their peers by 2.3-3.8% per year - 89-184% when compounded over those 28 years. Simply put, companies that treat their workers better, do better. Implications for Practitioners So what does this academic study mean for practitioners? Let’s start with business leaders. Growing-the-pie is not pie-in-the sky: investing in workers works for investors. When I speak to companies on the importance of employee satisfaction, I’m introduced as a Professor of Finance and the audience often thinks they’ve misheard. The finance department is frequently the enemy of HR, believing that it’s a cost centre and a distraction from profits. But the results show that any finance department (or senior executive team) with this mindset is failing at its job. Relatedly, developing a company’s workforce is a CEO level issue, rather than one to be delegated solely to the HR department. A leading investor told me that she evaluates companies by asking CEOs about their people. Some can answer on the spot; others respond, “I didn’t know you’d ask about my employees – next time I’ll bring the HR director along.” Turning to the HR profession, the research provides evidence and ammunition for those seeking more funds from the corporate headquarters to develop their workforce. In addition to the results on the value of employee satisfaction in general, the book also discusses other research on the returns to specific workforce initiatives, for example mental and physical wellness programmes. But it’s not just about simply spending money. The factors in the Best Companies survey – credibility, respect, fairness, pride, and camaraderie – are about an attitudinal shift in workers, from human resources to human resources. Of course, HR professionals already know that cultural change is far more complex than simply throwing money at the problem. I thus provide a framework to guide the attitudinal shift required, with three principles – the attitude of empowerment, the attitude of investment, and the attitude of reward – which are grounded in the Best Companies survey and thus buttressed by the evidenced link to shareholder returns. For employees, it’s often tempting to think that they’re passive bystanders and capitalism is something that’s simply “done” to them. Instead, I stress the power of agency: citizens’ capacity to act independently and influence their environment, rather than being acted upon. One example is Abdul Durrant, who worked hard every night to clean the London offices of HSBC, including that of chair Sir John Bond. But he struggled to support his five children on his low wages. So Abdul attended HSBC’s AGM and addressed Sir John, saying “I am here on behalf of all the contract staff at HSBC and the families of East London. We receive £5 per hour – a whole £5 per hour! – no pension, and a measly sick pay scheme. In our struggles our children go to school without adequate lunch. We are unable to provide necessary books for their education. School outings in particular they miss out on.” Moved by this plea, Sir John gave HSBC’s cleaners a 28% pay rise. This shows the power of a single employee to change the wage policy of a large multinational. What does this have to do with the evidence? While, historically, executives acted with the pie-splitting mentality, leaders are increasingly aware of the evidence on the importance of human capital, and are thus increasingly responsive to employee input. That’s why many companies now take workforce surveys seriously, run crowdsourcing schemes to seek employee ideas, and have townhalls or employee panels to hear the voice of the worker. Indeed, in my relatively short 13 years as a professor, initially at Wharton and now at London Business School, I’ve seen a shift – in my conversations with executives and investors, and seeing what themes are discussed at practitioner conferences and company offsites I speak at. A shift, not a step-change, and there’s far more work to be done, but a shift, nonetheless. Indeed, investors are the final group that should take note. Historically, employee satisfaction was considered a “non-financial factor” that only “socially responsible investors” should care about. Traditional investors should evaluate a company based on financial criteria such as profits, dividends, and revenue growth. But the evidence suggests that employee satisfaction, and indeed other measures of a company’s social value, are financially material. All investors, including those with purely financial motives, should care about them. And indeed this is where I’ve also seen a shift. That’s why the leading investor I referred to earlier evaluates CEOs by asking them about their people. A Shift In Thinking For Society More broadly, the evidence that the pie can be grown, so that investors benefit as well, implies a critical shift in thinking for society. That’s because the pie-splitting mentality is sometimes practiced by politicians, and the citizens that elect them. Their view is that the best way to protect workers is to split the pie in the other direction – straitjacket businesses so that they don’t create too much profit for investors (“them”), and so there’s a bigger slice for employees (“us”). Such a view is misguided for at least two reasons. First, investors are not “them”; they are “us”. Investors are often portrayed as nameless, faceless capitalists, but they include ordinary citizens saving for retirement, mutual funds or pension funds investing on their behalf, or insurance companies funding future claims. Second, it throws the baby out with the bathwater and ignores the positive role that business plays in society beyond generating profits. Successful companies design products that transform customers’ lives for the better, provide employees with a healthy and enriching workplace, and preserve the environment for future generations. Merck’s drug ivermectin has substantially reduced river blindness worldwide; Vodafone’s mobile money service M-Pesa has lifted 200,000 Kenyans out of poverty; and Google’s maps, search engines, and shared documents make millions of lives easier each day. Indeed, overly-stringent regulation will jeopardise the long-term viability of a company – particularly given global competition – and may prompt its collapse (or at least stunt its growth), ultimately hurting employees. Now that doesn’t mean that we should allow companies free rein. They must be held accountable, but the evidence implies a shift in thinking on what they should be held accountable for. We often “name and shame” companies who engage in errors of commission – actions seen as pie-splitting, such as making what we see as too much profit. But high profits may be a by-product of growing the pie and serving society. Instead, we should hold businesses accountable for errors of omission – spurning opportunities to grow the pie through inaction. For example, Kodak failed to invest in digital cameras and ultimately went bankrupt. Yet it’s rarely seen as a scandal because investors didn’t profit – but that’s of no consolation to the 150,000 workers were made redundant. An irresponsible company is one that shrinks the pie or fails to grow it, harming everyone. Second, the pie-growing mentality changes our view on how to reform executive pay. The level of CEO pay is perhaps the single most-cited piece of evidence that business is out of touch with society. In the U.S., the average S&P 500 CEO earned $14 million in 2017, 361 times the average employee. The idea is that, if the CEO wasn’t so greedy, her pay could be redistributed to her colleagues or invested. But that’s the pie-splitting mentality. The amount that can be reallocated through redistributing the pie is tiny. The median equity value in the S&P 500 is $22 billion. $14 million is only 0.06% of the pie –far smaller than the 2.3-3.8% that can be created by growing the pie through improving employee satisfaction. Moreover, just like high profits, high pay could be a by-product of creating value. It’s fair for CEOs to be paid like owners – to own a long-term share in her business, so that she’s on the hook if it underperforms. But the flip side is that, if she grows the long-term stock price, she’ll automatically be rewarded as her shares will be worth more. For example, Disney’s Bob Iger was criticised for earning $66 million, but the market value of Disney had risen by 578% in his four years at the helm, and 70,000 jobs had been created. So we shouldn’t criticise high CEO pay without first asking whether it results from pie-growing or pie-splitting. And that’s where there is indeed major room for reform. Some CEOs aren’t paid like long-term owners. They’re instead given bonuses based on short-term targets - and so it’s indeed possible for them to earn millions by exploiting workers. So the solution isn’t so much to change the level of pay, even though this might win the most headlines, but its structure – to move away from short-term targets and pay the CEO with shares that she can’t sell for (say) 5-7 years. Giving her long-term incentives rewards her for pie-growing and discourages pie-splitting. Importantly, she should continue to hold her shares after retirement, to ensure that her horizon extends beyond her tenure. And shares should be awarded to all employees, to ensure that everyone benefits from pie-growth. If the company does well, it’s not just due to the CEO. A Collaborative Effort So it’s not business or society – it’s and. This observation gives us great hope, but also great responsibility. Not only can all stakeholders benefit from a growing pie, but it’s also their duty to work together to grow the pie. When they do so, bound by a common purpose and focused on the long-term, they create shared value in a way that enlarges the slices of everyone – not just shareholders and workers, but also customers, suppliers, the environment, communities, and taxpayers. Importantly, an approach to business driven by purpose typically ends up more profitable in the long-term than an attempt to maximise shareholder value. So it’s one that leaders should voluntarily embrace, even in the absence of public mistrust or threats of regulation. Creating social value is neither defensive nor simply “worthy” – it’s good business. The highest-quality evidence, not wishful thinking, reaches this conclusion: To reach the land of profit, follow the road of …

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16 March 2020Mental Health: Which is Better Team Sports or Solo Exercise?

Laura Healy Exercise is not only good for your physical health, it’s good for your mental health, too. Indeed, many people even take up exercise as a way of boosting their mental well-being. But is all exercise equally beneficial – and does it matter whether you do it alone or in a group? One notable study examined how the setting people exercised in related to mental health. The study looked at students aged between 16 and 24 years old, comparing those who took part in team sports, informal fitness groups (such as yoga classes or running groups), and those who exercised alone at least once a week. They followed up six months later to measure their mental health. The study found that the students who did group physical activity (either in team sports or informal fitness groups) had better mental health than those who exercised alone. Students exercising in groups were also more physically active, doing nearly twice as much activity as those who exercised alone. They also reported feeling more connected to people around them. The researchers suggest the reason students exercising in groups had better mental health may be because of the social support network they developed during group physical activities. My own research also explored how informal football programmes helped with mental health recovery. My colleagues and I conducted two studies, one looking at community football initiatives and the other at football programmes within NHS mental health services. We interviewed people who played football at the sessions, where players, coaches and healthcare staff all took part in the activities together. We found that participants valued group activities, as they were able to connect with people who shared similar interests and experiences. Participants also said that being able to choose to play a sport they enjoyed contributed to mental health. These programmes can support mental health recovery, allowing participants to live a hopeful and satisfying life despite any limitations caused by mental illness. However, our research suggests that physical activity alone may not be as important as the reason why a person exercises. The reasons we exercise The motivations behind why a person exercises also affect mental health outcomes. The relationship between motivation and mental health can be explained by self-determination theory, which proposes that our personal experiences, alongside cultural and social factors, influence why we choose to participate in certain types of physical activity. We’re more likely to experience mental health benefits from exercise if the environment makes us feel that we have more choice and control, we feel more capable or likely to succeed, and when we have stronger connections to others. If these aspects are perceived in an environment, we tend to take part in activities because they are enjoyable or personally important to us. This is known as “autonomous motivation”. Studies show that when people do activities for these reasons, they feel happier and have more energy. On the other hand, feeling that we have less choice or control, or that we’re not good at what we’re doing, can have a negative effect on well-being. When we feel this way, we tend to do activities to avoid feeling guilty or being punished – or to receive praise or attention from others. This is known as “controlled motivation”. While these reasons can be powerful ways to get us started with exercise, we’re much less likely to continue being active over the long term because we’re not doing things for our own enjoyment. Crucially, this type of motivation has been shown to have a negative impact on mental health. For example, if I choose to jog on my own because it’s important to me, this is likely to be better for my mental health than if I played a team sport where the only reason I participate is because I worry about letting my teammates or coach down. This would be because I’m not choosing to take part in the sport for my own reasons, but for the sake of other people. Research looking at the reasons people participate in team sports and their mental health in the UK and Ireland shows how important the right type of motivation is in relation to mental health. Team members who were able to make choices about their training, felt connected to those around them and that they were performing well in their sport experienced better mental health. But if these aspects were missing, athletes’ mental health was poorer, showing how important creating the right environment is, regardless of the activity. Finding ways to give individuals more choice and helping them to develop relationships with others might be important for coaches, exercise instructors and even gym buddies, so that people can better improve their mental health through the exercise they’re doing. The activity itself might not predict the mental health benefits – but the way people feel while doing it does. So is it better to exercise alone, or in a group? In practice, there is some evidence that group-based activities might be more beneficial for mental health. But the reason a person is exercising, and the environment they’re exercising in, are just as important. Put simply, choosing an activity you love – whether it’s because you feel good at it, or it allows you to be part of a community – will bring the best mental health …

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16 March 2020Hate Exercise? Small Increases in Physical Activity Can Make a Big Difference

Libby Richards A new year typically brings new resolutions. While making resolutions is easy, sticking with them is not. Exercise-related resolutions consistently make the top 10 list, but up to 80% of resolutions to be healthier, including promises to exercise more, are tossed aside by February. You know physical activity is good for you. But, that isn’t always enough to get or keep you moving. You’re not alone. Fewer than half of American adults are as active as they should be. How active should you be? The Centers for Disease Control and Prevention recommend that adults get at least 150 minutes of moderate-intensity physical activity every week. So, let’s think about physical activity in a different way. As a nurse who researches exercise, I can tell you that it is likely the closest thing to a fountain of youth or a magic pill that you will have in your lifetime. Benefits to all parts of your body Research shows that every single system in the body benefits when you are more active. You sleep better. You have more energy. You find yourself in a better mood. You think more clearly and remember better. Your bones become stronger. Your body also responds better to insulin, which lowers your risk of diabetes. And you significantly reduce your risk for many cancers. All of that is in addition to the better known weight and heart benefits of physical activity. Bottom line: If you want to live a long and healthy life, you need to be active. But “that’s easier said than done,” you might be saying to yourself. In fact, increasing your physical activity is probably easier than you think. You don’t need to buy expensive equipment or join a gym. And you will begin to reap the rewards of physical activity almost as soon as you start. Adding small amounts of movement to your daily routine goes a long way. Brisk walking, at a pace of at least a 20-minute mile, provides health benefits similar to running, and probably more social benefits. Plus, your risk of injury is much lower. And you can walk – for free with nothing more than comfortable shoes – from almost anywhere: your neighborhood, your office, or in lieu of waiting behind the wheel of your car in the pickup line at your kid’s school. A 22-minute walk every day, or two 11-minute ones, would put you just over 150 minutes every week. It isn’t cheating to break your 150 minutes a week into small increments. In fact, even for people who are physically fit and exercise every day, breaking up periods of sitting is critically important. Even if you are getting enough exercise, sitting for the rest of the day can undo the health benefits of your workout. If you aren’t yet ready to aim for 2.5 hours of brisk walking each week, reducing the time you spend sitting would be a great starting goal. Setting other goals Many experts who work with clients or patients to set goals use the acronym SMART (specific, measurable, attainable, realistic and time-based) to guide goal-setting. This simple method could help you achieve a goal to sit less and move more in the new year: Be specific. Rather than just “sit less, move more,” include when you will start and how will you do it. Specify what actions you will take to meet your goal. For example, make a list of how you can get more steps in each day by doing specific things, like taking the stairs instead of the elevator. Make it measurable. Again, “less” and “more” are hard to measure. Instead, try “Walk for 5 minutes after every hour of sitting.” Without a way to measure your goal, it becomes hard to know when you have achieved it. Make it attainable. If you currently don’t exercise at all, 150 minutes a week may not be realistic. How about three 20-minute walks per week? You can slowly increase after you achieve that first goal. And choose an activity you might enjoy. If you already know you hate running, a goal to do it every day would be less attainable. Set realistic goals. Your new activity goal should work for you and fit within your lifestyle. It’s great to challenge yourself, but break up challenging goals into smaller, more realistic, goals to help keep on track. Set a time by which you will meet your goal. For example, will you take a certain number of steps by noon each day? Or, will you build up to 150 minutes a week by mid-April? You’re more likely to achieve short-term goals that lead into a long-term one. One of the best ways to keep up with your efforts is to track your progress. You can do it with pen and paper, in a journal, or in one of many smartphone apps. As you see yourself making progress, it can be easier to keep up the routine. Expand your view of exercise Another thing to keep in mind is that you don’t have to go a gym to get moving. There are ways to make exercise part of your lifestyle, without too much inconvenience. Get the family involved. Play tag, go on a scavenger hunt at a local park, or walk to your favorite hangout. Park farther away from your workplace, the store, the library, etc. Walk during your breaks at work and over your lunch period. Instead of having coffee with friends, take a walk with them. Whenever you are on the phone, stand up and walk around. If you are at your kid’s or grandkid’s sporting event, walk the sidelines instead of sitting on the bleachers. Try to find ways to make walking more meaningful. For example, try walking your own dog or a shelter dog. Dogs make great exercise companions that will never turn down an opportunity to walk. As you undertake the big change from being inactive to becoming active, understand that setbacks happen. Don’t let one slip-up derail your whole goal. When possible, have a backup plan to deal with barriers like weather or time constraints. And celebrate the small victories you make toward reaching longer-term …

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16 March 2020Ecotherapy Aims to Tap into Nature to Improve Your Wellbeing

Carly Wood As many as one in six adults experience mental health problems like depression or anxiety every week. And not only is mental ill-health one of the most common causes of disease worldwide – it’s also on the rise. Finding ways to improve mental health is therefore essential. One type of therapy that is starting to become more popular is “ecotherapy”; which advocates claim can improve mental and physical wellbeing. Sometimes referred to as green exercise or green care, this type of formal therapeutic treatment involves being active in natural spaces. It’s also sighted to be one of 2020’s biggest wellness trends, though the practice is far from new. Although definitions of ecotherapy vary, most agree it’s a regular, structured activity that is: Therapist led Focuses on an activity (such as gardening), rather than a health outcome Takes place in a natural environment Involves interacting with and exploring the natural world, and Encourages social interaction. However, the key difference between ecotherapy and recreation is the presence of a trained practitioner or therapist. The role of the therapist is often overlooked, however they are key to facilitating the clients’ interactions with both the natural and social environment and setting clinical aims for the session. Examples of ecotherapy activities might include gardening, farming, woodland walks, and nature art and crafts. Like the client, the therapist actively takes part in the ecotherapy session; in fact, it’s often difficult to distinguish between the client and therapist. But why do people believe ecotherapy is so beneficial to mental health? The scientific basis for ecotherapy comes from past research which has shown that natural settings are good for both mental and physical health. One systematic review analysed the benefits of natural environments for health and found that interacting with natural settings – such as walking or running in a public park – can provide a range of health benefits, including reduced stress and improved mood, wellbeing, and self-esteem. Research has also shown that natural settings also encourage physical activity. For example, an ecotherapy gardening session not only involves interacting with nature but also the moderate-vigorous physical activity associated with gardening. Studies show that physical activity in natural settings has greater health benefits compared to physical activity in other environments. Some of these benefits include lower stress and improved mood. Ecotherapy might also provide opportunities to socialise, giving another reason for its use as a mental health treatment. Research shows that loneliness and social isolation are twice as harmful to health as obesity. They’re also more harmful than physical inactivity and are as damaging to our health as smoking 15 cigarettes daily. Socialising is also associated with higher life expectancy, with research indicating a 50% increased likelihood of survival in elderly people who have strong social relationships. Ecotherapy can also give people a sense of achievement and purpose. It can provide structure and routine to people who might not have these in their lives, perhaps because of their poor mental health. Having structure and routine is one aspect of being employed that research shows is beneficial to mental health. The therapist is not only key to facilitating the clients’ involvement in the natural and social environments; but also ensuring that each of the ecotherapy sessions have a defined purpose. It is common for both the client and therapist to be working towards achieving this aim. For example, in the case of an ecotheraphy gardening project the aim might be to develop a community garden. In recreation activities the specific environment, types and frequency of social interaction and purpose of the chosen activity are all driven by the participant. The evidence for ecotherapy Currently, much of the evidence showing the benefits of ecotherapy comes from qualitative data. For example, one study interviewed people referred to mental health services to understand the effects of ecotherapy. The programme reportedly improved physical and mental health, and provided daily structure and routine. It also allowed participants to learn new skills and socialise. But, there was no statistical data to support these findings. This means the study’s findings were based solely on the reported experiences of the participants, which might not provide an accurate picture of the effect ecotherapy would have on the wider population. Despite this, research into ecotherapy’s benefits is growing. One in-depth analysis looked at nine different ecotherapy programmes. It found that people who had participated in any type of ecotherapy programme had significant improvements in self-esteem, wellbeing and social inclusion from the start of their treatment, and also felt more connected to nature. Participants also had significant improvements in mood, with feelings of anger, tension, depression, and confusion reduced after just one ecotherapy session. Other studies have suggested reduced physiological stress, and improvements in anxiety, depression, mood, and self-esteem in people with a range of psychiatric illnesses, including bipolar disorder, major depression, and better wellbeing and increasaed social engagement for people with dementia who took part in a gardening programme. Despite increasing reports of the health benefits of ecotherapy, there is still a need for high quality scientific evidence to better support its effectiveness. However, large-scale, randomised, and rigorously controlled research is difficult, as all ecotherapy projects are unique. Each involve different activities and environments, varying exercise intensities, and participants may have a range of health needs. However, the versatility and uniqueness of these programmes might be the very thing that contributes to positive health …

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16 March 2020Reduce Stress at Work and Prevent Burnout – A Psychologist Explains How

Sarah Tottle How did those new year’s resolutions work out for you? Old habits will have already returned for many – you’re not alone if you’ve already stopped using that new gym membership. Similarly, you’re in good company if 2020 is already stressing you out. Stress, and more chronic exhaustion such as burnout, is commonplace within the modern workplace. People are sinking under the pressure of an attendance culture that glorifies being present at work at the expense of their health. But why exactly does this happen and what can you do to prevent it? Presenteeist cultures, which see employees working longer hours, have been linked to higher rates of burnout. This is the opposite of absenteeism. People attend work when sick, or even overwork, and it is a habit that is more common than we think. Employees feel they’re unable to challenge this culture because they see everyone else doing the same thing. People that go to work when ill or work longer hours than expected often work at less than their full capacity. Studies show this results in a decline in productivity. One study in the Netherlands looking at a variety of jobs found that presenteeism may appear to be profitable for companies at first because of the reduced absence of employees. But in the long term, presenteeism resulted in higher levels of sickness and absenteeism later on. Other studies have found that presenteeism can cause a decline in productivity in the individual employee by at least one third and is more costly to the employer than its counterpart, absenteeism. It is also what makes employees sick. The World Health Organisation officially classifies burnout as an “occupational phenomenon”. It is defined as “a syndrome conceptualised as resulting from chronic workplace stress that has not been successfully managed”. And it is characterised by feelings of energy depletion or exhaustion, negative and cynical feelings towards your job, and a decline in performance. Starting at the top Tackling burnout is the responsibility of both organisations and their employees. If improving your health is a priority for you, your work health plays a crucial part in this – both physically and mentally. Leaders need to lead by example. There is a trickle-down effect in leadership where subordinates copy those above them. They don’t want to appear weak and feel they need to push themselves more. If leaders start taking lunch breaks, going for a walk in the middle of the day, and leaving at a reasonable hour, that sets a good example to their team. If you’re a manager and you see more and more presenteeist behaviour, shame culture could be affecting your organisation. Consider tackling this head on. Provide fruit, encourage walks outside and tell your staff to leave on time. These are just some of the small changes you can make to help create a healthier, happier workplace. If you can, get workplace wellness consultants to run workshops for you and your team. Health starts at home If you’re an employee, you shouldn’t expect your boss to solely be responsible for your workplace wellbeing. You also need to make changes yourself. There’s no shame in returning to those new year’s resolutions you set back in January. Here are some tips to relieve your stress and lower your chances of burnout: Pick a priority. Write down exactly what you want to happen this year. Are you looking for a career change or a promotion? Do you want to prioritise your life outside of work? Once you’ve defined what you want, you can start making small changes to work towards this. Set some goals. Once you have established exactly what you would like to achieve, set some monthly objectives. Work at a pace that suits you. Achieving smaller goals can result in a dopamine boost that will increase your sense of accomplishment and motivation. Get better sleep. Prioritising rest and improving your sleep hygiene will boost your immune system. Getting disciplined about logging off electronic devices one to two hours ahead of going to sleep at night will also improve the quality of your sleep. Get more exercise. If you’re in a sedentary job, get out more. Taking a lunch break can help get the mental clarity needed to be productive and accomplish more challenging tasks. You will also avoid the afternoon slump. Help others around you. Research shows that behaviour like supporting others and giving positive feedback to colleagues can help reduce your own stress levels and the effect that your stress has on your mental health. Reducing stress at work and mitigating the effect it has on you is down to a mix of physical and mental pursuits. It’s everyone’s …

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16 January 2020Myths around mental illness cause high rates of unemployment

Bandy X. Lee Even though mental illness affects one in five adults – and depression is the leading cause of disability worldwide – secrecy and stigma around the issue continue. The problem is especially acute in the workplace. While individuals with mental illness often wish to work and are able to, their unemployment rates remain three to four times those of individuals without mental illness. I’m an expert on mental health, and I have found that to dispel stigmas surrounding mental health in the workplace, researchers like me need first to tackle several myths. 1. Everyone has different abilities Let us examine the first myth: that mental illness makes one less able to do a job. Mental disorder does not interfere with all capacities, and can sometimes improve others. One study shows that almost half of U.S. presidents suffered from some kind of mental disorder. Some have performed the most challenging tasks in history. For example, Abraham Lincoln’s severe depression is said to have made him more compassionate, while Theodore Roosevelt’s hypomanic moods made him an exuberant and influential personality. There is plenty of evidence that, given the right supports, people with mental illness can be successful at work. Conversely, individuals do not have to have a mental illness to lack the mental capacity to do a job. 2. Mental versus physical illness The second myth is that mental illness is associated with moral failing, unlike physical illness. In our own lifetimes, we may remember the stigma and secrecy that surrounded cancer and AIDS. Scientific research and education helped these prejudices give way to understanding. The more we know, the more we understand that mental disorders are not moral failings or subjective complaints that people can simply “snap out” of, but are serious, debilitating and deadly medical conditions like any other. Within medicine, psychiatric diagnoses are some of the most reliable. And while there are no blood tests, there are standardized scales that can be just as dependable for diagnosing and monitoring prognosis. 3. Mental illness does not equal violence The third myth is that those who have mental illness are dangerous. Media and public perception continue to perpetuate this myth, even though large-scale studies have shown no difference in levels of violence from the general population. People with mental illness are actually more often victims of violent crimes than perpetrators. In 2017, after a mass shooting in Texas, President Donald Trump stated that “mental health is your problem here … this isn’t a guns situation.” He reissued similar statements after other mass shootings in Parkland, Florida; in Pittsburgh, Pennsylvania; in Thousand Oaks, California; in El Paso, Texas; and in Dayton, Ohio. This increases the victimization of mentally ill people, as it augments the suffering of those already afflicted by stigma. 4. Challenging stigmas Finally and sometimes fatally, the myth persists that speaking about mental illness increases stigma. Erving Goffman gives a compelling description of how stigma stereotypes a person as abnormal, deformed and dangerous. Stigma, hence, is a form of violence. It originates from ignorance or misunderstanding and harms those suffering from mental illness by depriving them of their humanity. Stigma creates for people with mental illness conditions for social exclusion, employment discrimination, victimhood to violent crime and increased suffering, which can lead to self-stigma, poor self-care and greater depression and suicide. For example, Trump recently accused Intelligence Committee Chairman Adam Schiff of being a “a maniac … a deranged human being” and “a very sick man,” but he is not the only politician to do so. Invoking mental health as an insult further stigmatizes those already suffering in harmful ways. Speaking about mental illness helps educate and dispel myths. Demystifying mental illness and distinguishing it from the person and a person’s abilities is critical to diminishing stigma and improving the lives of those already burdened with mental illness. Why people work Work is more than a means for material support. It is also a major way individuals stay mentally healthy and socially integrated. Especially for those dealing with a serious mental illness, employment is important for daily structure and routine, a sense of self, meaningful goals and opportunities for friendships and social support. The workplace is therefore an important setting for speaking about mental health and illness. Breaking the silence can be beneficial for removing barriers to seeking treatment, staying well and staying employed. Employers already bear much of the burden of mental illness. As 85% of employees’ mental health conditions go undiagnosed or untreated as of 2017, employers subsume more than US$100 billion in lost revenue and 217 million lost workdays each year. Prejudicial attitudes also exclude needed talent in the workforce. Fear of discrimination leads many not to seek care, despite the availability of successful treatments. Exclusion from the workforce can result in material deprivation, loss of self-confidence and self-identity, and isolation and marginalization that are key risk factors in mental health. High lifetime unemployment even lowers life expectancy, presumably as a combined result of stress, depression, reduced health care and loss of social networks. Workplace interventions to interrupt the secrecy and stigma surrounding mental illness can be effective. Some programs might involve psychoeducation, increasing mental health literacy, workshops, online courses that target prejudicial attitudes and behavior, and crisis intervention training. Awareness of inequalities with respect to race, gender, age, sexuality, class and other related factors, as well as the benefits of diversity, have grown recently, but society has a long way to go with mental …

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16 January 2020Hangovers: this is what happens to your body when you’ve had one too many

Hal Sosabowski Having a few drinks at Christmas is, for some people, as much a part of the festive tradition as presents, decorations or carols. So if you find yourself nursing a hangover on Boxing Day, you might be interested to know what’s actually going on inside your body and why you feel so bad. We tend to drink because in low doses alcohol is initially a euphoriant, it makes you feel happier. It does this by causing the body to release dopamine and endorphins, chemicals that stimulate the brain’s reward system. But, after a while and as you drink more, it ultimately suppresses some brain activity and slows down your heart and breathing. The effects of the initial intake of any alcohol is the first of many stages of narcosis, the last of which is death. There just happens to be a large window between an effective dose (which has you thinking you are far more witty and handsome than you actually are and, later, running down the street with a traffic cone on your head) and a lethal dose (which has you on a mortuary slab). Note that even before you arrive at the typical drink drive limit, you might experience excitement, uncoordination, impairment, speech slurring, swaying and loss of inhibition. And yet you’ll still legally be able to drive a car. Small amounts of alcohol affect the limbic system in the brain, which result in aggression and the Friday and Saturday night melees common in many town centres. Alcohol is also a vasodilator, which means it widens blood vessels, diverting blood from the body’s core to its extremities. This results in the characteristic flushed cheeks you can get from consuming alcohol and also the red nose often sported by dyed-in-the-wool drinkers. Initially, drinking alcohol is self-reinforcing. What might seem a good idea initially seems an even better idea after you’ve had a few. Alcohol is absorbed quicker than most things since some is absorbed in the stomach (rather than the small intestine). It then spreads throughout the body and is distributed to all organs including the brain and the liver, where the body makes a valiant attempt to break down and dispose of the alcohol. To do this, the liver produces enzymes, small molecules that help either make or break down important molecules. In this case, the enzyme alcohol dehydrogenase breaks down the alcohol (ethanol) into acetaldehyde (ethanal), which is then further broken down into acetic (ethanoic) acid and then to carbon dioxide. Energy is also released at all stages of the breakdown, which explains why heavy drinkers can sometimes be overweight. In fact, long-term alcoholics often get most of their calories from alcohol and eat very little. This can make them overweight but curiously undernourished because they are consuming empty calories and no vitamins or protein, which can produce a general appearance and feeling of illness. Why you vomit The first stage breakdown product, ethanal, is an emetic, which means it makes you want to vomit. As you drink and become more euphoric, your blood ethanol level is being monitored by the area postrema, the part of your brain which checks your blood for things that shouldn’t be there. If you eat some food which causes vomiting and diarrhoea, it’s your postrema that has instructed your body to get rid of the offending comestibles. Ethanal has the same effect. The postrema works to very fine tolerances, and as soon as your body contains enough ethanal, and the threshold that nature has set is reached, the postrema instructs your stomach to contract and makes you sick. Trying to stop this is like trying to hold back the tide. You may have noticed the very short time between drinking enthusiastically and realising that it’s a question of when, and not if, you are going to vomit. Disulfiram (Antabuse) is a drug used to treat chronic alcoholism that stops the subsequent breakdown of ethanal after you drink, causing an immediate hangover and explosive vomiting. It’s effectively a form of aversion therapy. Hangover causes Unfortunately, there’s no drug to treat drunkenness itself – or a hangover. Once you are intoxicated you just have to wait it out. The liver can metabolise between 8g and 12g of alcohol in an hour and the only way to become less drunk is to stop drinking so the alcohol can diffuse out of your brain and your liver can complete the breakdown. Aside from the vomiting, we don’t know exactly why we feel so terrible when we’re hungover, but it is thought to be another effect of ethanal and congeners, the non-alcoholic chemical clutter that is a by-product of fermentation. These include oils, minerals and other forms of alcohol such as methanol (wood alcohol), which can cause you to go blind in high doses. Darker drinks have higher amounts of congeners. Red wine also causes a particularly vicious hangover since it contains a vasoconstrictor, which constricts your blood vessels and causes that throbbing headache. Meanwhile, vodka might be more forgiving since “pure” vodka is just alcohol and water. The only other thing that might help reduce your hangover after a heavy drinking session is a glass of water before bed. Alcohol stops your pituitary gland producing the anti-diuretic hormone vasopressin, which normally restricts urine production. This means you end up losing more water than you take in, causing dehydration that irritates the blood vessels, leading to headaches. Otherwise, you’ll just have to console your post-Christmas blues with roast dinner leftovers and your favourite holiday …

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16 January 2020Employee Financial Worries – The Impact on Business and How to Make a Change

Monica Kalia When we started Neyber, we set out to help employees be better with their money and knew that companies would benefit from the knock-on effect. Now, five years on, we know that we and our clients completely underestimated the impact a financial wellbeing programme would have. London City Airport (LCY) is a really interesting case in point. The international airport found that 22% of its workforce were living pay cheque to pay cheque, while 21% lacked confidence when it came to managing money. Worryingly, LCY started to believe that these negative mindsets could be contributing to employee accidents at work. And with 70% of its workforce in operational roles, this couldn’t be ignored. LCY’s aim was to embed financial wellbeing into people’s lives and it’s had impact - by increasing financial education and reducing stress, accidents at work dropped by 56% in two years and 92% of staff responded positively to the question, ‘how confident are you managing financial affairs? The financial wellbeing messages ‘went viral’ and colleagues were sharing the positive impact the new benefit had on their lives. LCY’s story is one of safety and wellbeing of its people. Yet we estimate, through one of the largest surveys of its kind, that financial worries cost UK employers £15.2 billion every year in employee absence, turnover and lower productivity. For a business of 1000 employees, that equates to a cost of £450k annually. As part of our annual DNA of Financial Wellbeing, we look into the spending habits and attitudes of over 11,000 employees and 720 employers in the UK, surveying over 42000 people since 2016. This year’s research also showed us that 20.3m British workers – 3 out of 5 people - of all income groups are affected by money worries. The research suggests that financial worries lead to a: £14.2 billion¹ cost in turnover, with 3.6 million employees (11%) looking for a new job. £516 million² cost in lost productivity, as nearly 3 million people (one in ten employees) struggle to focus at work. £478 million³ absence cost, from 1.63 million employees taking time off work (those concerned about finances have each taken an average of 2.5 days off a year). Enormous business impact, low employer priority Despite the negative impact that poor financial wellbeing has on performance and retention, most employers aren’t prioritising it - yet. It continues to surprise us that only 4% of HR professionals listed financial wellbeing a top priority in 2020, but perhaps even more surprisingly, senior leaders were more than 3 times more likely to prioritise financial wellbeing than HR, the department usually over-seeing wellbeing. However, there is positive uptake with employers implementing financial wellbeing strategies, even if they’re not confident about them. Seventy-three per cent of employers have a financial wellbeing strategy for staff, but just 40% feel theirs is well-developed (up from 64% and 30% respectively in 2018). For an employee benefit that’s still relatively new, the take up of financial wellbeing strategies is encouraging, but there’s still some way to go before most employers say their strategy is good. Indeed, 46% of respondents say that if an employee came to them with concerns about their personal finances, they wouldn’t feel equipped to offer support, and 42% don’t see it as part of their remit to offer support on financial matters. From our perspective of partnering with over 450 UK employers, it is clear that employers who make time to implement a holistic financial wellbeing strategy see the greatest improvement in overall absenteeism, turnover and engagement - regardless of industry or sector. Financial wellbeing employee benefits range from providing a pension scheme to employee share plans, to financial education and retail discounts, with a pension being the most common. Employers are less likely to provide newer financial benefits such as savings accounts, early salary access or salary-deducted lending which is what employees want from their employers. My view is that HR and senior leaders are not currently connecting the dots when it comes to the impact of poor financial wellbeing on business performance. The reality is that improving employee financial wellbeing can help senior leadership achieve their top business priorities – increased productivity, cost reduction, retaining and attracting staff and employee mental wellbeing. All of these ultimately lead to the growth of the business. When you consider the employee perspective, you see the issues. The DNA of Financial Wellbeing showed that financial worries remain employees’ top concern, with three in five individuals feeling the strain. What’s more, they’re worrying about their later life and retirement too – this is their second biggest concern. Those impacted are not just lower-paid; people with the highest salaries are worrying too. Although money worries do decrease with income, almost half (46%) of employees earning over £70,000 annually are affected. Worryingly, there is a difference in perspective though between employer and employee. Fifty-six per cent of employers feel their organisation is good at providing a supportive environment for financial health – yet just 33% of employees agreed. Indeed, one in five employees said they have felt depressed because of financial worries, one in three have felt stressed, one in three felt anxious and one in four have lost sleep. Five wellbeing groups−where are your employees now? We have developed a tool that assesses people’s habits and attitudes towards spending, budgeting and saving. This puts them into one of five wellbeing groups and each group has different characteristics and priorities. For example, group one, ‘Get Started’, includes people who almost always run out of money before payday and rely on high-interest credit to cover everyday costs, whereas group 5, ‘Plan Ahead’, includes people who are financially comfortable, with a sufficient savings buffer in place, and able to invest and save for a comfortable retirement. The further employers can move employees up the spectrum to ‘Plan Ahead’, the greater the impact on productivity, retention and absenteeism. Employers can help their business and their people and there are five core steps to build a financial wellbeing strategy that works: Understand employees’ needs. Every organisation is different and you need to understand your workforce to create an approach to financial wellbeing that responds to their specific needs and circumstances. The importance of understanding the relationship with, and approach to, finances taken by employees cannot be underestimated. Identify what you’re trying to achieve. If you implement a financial wellbeing strategy because it’s another employee benefit to add to your list, you won’t see results. There needs to be a clear set of objectives and an active commitment. Ensure senior leadership engagement. Without their buy-in, it’s very difficult to lead a significant change in the business. Strong support from the board helps, plus make sure line managers are aware of what’s on offer so they can promote it with staff. Embed financial wellbeing in your culture. You won’t see results overnight but using different channels to communicate and implement the strategy will support your strategy. Be open on the issue and supportive of people actively looking for help. Allow conversation to build. Measure, learn, adapt. Implementing the plan is only the start, make sure you have measurable and realistic targets that can be tracked so you can learn and adapt. Addressing poor employee financial wellbeing can help employers achieve their key priorities. The good news is that, much like mental wellbeing 5 years ago, the financial wellbeing space has matured with many employers moving on from the original question of “should we implement a strategy?” to “how do we best do this?”. Providing support that is relevant to the differing needs of employees plays an enormous role. Financial wellbeing is not just about paying off debt, but about ensuring employees feel in control and confident about their future as well. There is such great potential for a well-rounded financial wellbeing strategy to help employers galvanise their workforce and achieve business objectives. References Assuming actual turnover of 12.9% at average replacement cost of £30,614 Assuming only 1 hour per month of lost productivity (1.5 days/year) at the average daily wage of £117 An average 2.5 days off at the average daily wage of …

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16 January 2020Alcoholic? Me? How to Tell If Your Holiday Drinking is Becoming a Problem

Sara Jo Nixon It’s the most wonderful time of the year, when holiday parties collide with collegiate and professional athletics events. What do they all have in common? Booze, lots of it, and often free. It’s no wonder the lead reindeer has a red nose. Of course, drinking isn’t limited to a single season, but it holds a prominent place during the holidays. Across a few short weeks, consumption of spiked cider, boozy nog, wine, beer, cocktails and variations thereof may be higher than at any other point in the year. One industry study suggested that drinking doubles at this time of year. During this party time, we see up close the drinking habits of our partners, co-workers, relatives and, of course, ourselves. This holiday season, you might take notice of just how much you drink. You may start to question your motivation for drinking. Or wonder about the long-term effects. While it might be tempting to dismiss these unsettling reflections, as director of the University of Florida Center for Addiction Research and Education, I encourage you not to. How many is too many? About one in eight U.S. adults met criteria for an alcohol use disorder in 2013 – the most recent year for which we have data. Compare that to just over one in 12 in 2002. That’s a nearly 50% increase. Alcohol misuse can lead to interpersonal violence and physical injury and worsen medical and psychiatric conditions. Besides its impact on health and well-being, alcohol misuse costs the U.S. an estimated US$224 billion a year in lost productivity, health care costs, criminal justice costs and others. More than 75% of those costs are associated with binge drinking. But these statistics don’t answer the question I get most often from friends, family, casual acquaintances and even strangers at parties or on cross-country flights. What everyone wants to know is, “How much can I drink without being an alcoholic?” The answer is, “It depends.” For starters, stop calling names To effectively address the question, we must rethink our use of the term “alcoholic.” People have disorders; they are not themselves these disorders. The distinction is not merely a matter of semantics. It is fundamental to eliminating the stigma of substance use disorders and other psychiatric conditions. Still, the more appropriate question, “How much can I drink without developing an alcohol use disorder?” gets the same answer: It depends. The amount that a person drinks doesn’t directly determine an alcohol use disorder diagnosis. But how can a “drinking problem” not have a definitive cutoff? That’s because two people could drink the same amount and experience completely different consequences. So, the diagnostic criteria for alcohol use disorder focus on those consequences, rather than number of drinks imbibed. For example, inability to control your drinking, no matter how much you drink, is a red flag. Having cravings for alcohol is another one. Does drinking interfere with your work, school or home responsibilities? Do you drink in situations in which you know it’s risky to do so? Of course, the more you drink, the more likely it is that you will experience negative consequences. Risky business Most drinkers do not develop a disorder. But that doesn’t mean you’re off the hook. Research shows that Americans are drinking more and for longer each time they drink than ever before. And, adults are continuing to drink into older ages than ever before. Women, in particular, seem to drink more as they age. A significant percentage of drinkers over age 55 often exceed the National Institute of Alcohol Abuse and Alcoholism’s suggested guidelines for moderate drinking without necessarily meeting criteria for an alcohol use disorder. Whether you have a diagnosable disorder or not, all this drinking can cause problems. One of those problems is driving. People mistakenly think of this as a young person’s problem. But about one in four adults 45 to 64 and another one in 12 over age 65 report driving after drinking in the previous month. At blood alcohol concentrations equivalent to one or two drinks, older adults show notable shifts in cognitive performance, neural activity and driving strategies compared to younger ones. Putting all this in the context of the holidays, it’s not just the pervasive presence of booze that makes us drink. It’s the party culture. If you’re seen without a drink, you are often encouraged to take one. If you lose track of your drink, you get another (full) one. This excess may meet criteria for a binge drinking episode. For women, that’s four or more standard drinks in a single occasion. For men, it’s five or more. And, as for “standard” drinks, we all know that many of us are typically pouring ourselves two to three times the standard in every glass. Binge drinking, too, is increasing in older adults. And that matters because it has an immediate impact on driving abilities, fall risk and prescription medications. Should I take action? If your alcohol use is gnawing at your conscience, you have options. Talk candidly with a trained professional about your drinking. Access the National Institute of Alcohol Abuse and Alcoholism website, where you can assess your drinking and seek help. If you believe a friend or relative has a problem, talk with someone who can help you identify next steps. Here are some ways to be a safer drinker: Before that party, eat something, even if you have to eat it in the car. Make your first drink nonalcoholic. It keeps you from gulping down the first “real” drink and allows your “car snack” time to settle. Alternate alcoholic and nonalcoholic drinks. Eat (actually, graze) throughout the evening. Assuage guilt about calories by prioritizing fitness. Disregard peer pressure. Susceptibility to it may lessen with age, but seldom vanishes. When you reach your limit, don’t be swayed. To escape from an awkward conversation, don’t make a beeline to the bar. Take an indirect route through the room, mingling, checking out decorations. Take a ride-share home or to and from a party. If you think your holiday drinking could be a sign of a year-round issue, discuss it with a medical or behavioral health provider. There are a variety of options, including the support and help of Alcoholics Anonymous, which is free. Online AA meetings are also available. For more information, …

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16 January 2020How to Use Habit Science to Help You Keep Your New Year’s Resolution

Wendy Wood More than 80% of people who make New Year’s resolutions have already given up on their goals by February. While there’s a lot of resolution advice on the internet, much of it fails to highlight the crux of behavioral change. To make individual decisions – whether it’s what to wear or which gift to buy for someone – you draw on brain systems involving executive control. You make the decision, add a shot of willpower and, voilà, it’s done. But most resolutions don’t involve a single decision. Eating healthier, exercising more and spending less all involve habitual behaviors that involve neural circuitry tied to unconscious thought. Take eating. You can decide you want to eat healthier, but the memories of your eating habits persist. At around 11 a.m., you start thinking of muffins, your go-to morning snack. At 8 p.m., you automatically think of ice cream, your usual dessert. This is the way habits work: Certain contexts, like times of the day and locations, bring to mind thoughts of certain rewards – like the tasty foods you tend to eat. You can exert some willpower and stop yourself snacking over the course of one day. But denial can backfire: By quashing a desire, you give it extra fuel to plague you in the future. Over time, we tend to give up. The key to mastering habits is to understand how difficult it is to simply will them away. But you can deploy a kind of “reverse-engineering” based on the science of habits. The facts of friction One way to reverse engineer bad habits is to create friction. Physical distance is a simple source of friction. A 2014 study involved a bowl of buttered popcorn and a bowl of apple slices. One group of participants sat closer to popcorn than the apple slices, and the other sat closer to the apple slices. The first group ate three times more calories. The second group of participants could see and smell the popcorn, but the distance created friction, and they were less likely to eat it. For your own eating habits, the strategies can be as simply as putting junk food out of sight – off kitchen counters and into the pantry, so it’s slightly more difficult to access. If you want to cultivate good habits, you can diminish the friction for the new behavior. For example, researchers looked at the GPS data of people with gym memberships. Those who traveled about 3.7 miles to a gym went five or more times a month. However, those who had to travel around 5.2 miles went only about once a month. Again, the strategy is obvious: Reduce friction to working out. Choose a gym that’s on your way home from the office. Keep your gym bag always at the ready. My son, an avid bike racer, puts his indoor bike trainer in the middle of his living room before leaving for work. When he gets home, he finds it’s usually easier to do his planned workout. Out with the old cues Another strategy to reverse-engineer your habits is to change the cues that activate them. Cues can include the time of day, a location and the routines associated with a behavior. If you regularly make coffee, your cues might be entering your kitchen shortly after waking up and seeing your coffee machine. Cues change naturally when you start new relationships, change jobs or move. These offer a window of opportunity to act on your goals and desires without being dragged down by the cues that trigger your old habits. For example, researchers found in a 2017 study that professional athletes whose performance had declined often improved after being traded to or signing with a new team. Another study found new residents of a small British town with strong environmental values mostly took the bus or cycled to work. But people who were not recent movers mostly drove, even though they held similar values. When cues change, it becomes easier to switch up your habits and routines. Say you want to eat healthier. Try taking a new route to work instead of the one that takes you by the café where you buy double cream cappuccinos. When you’re chatting on the phone, do it in the living room instead of the kitchen. Even in food-rich contexts, cue control is possible. A 2012 study found that overweight patrons at all-you-can-eat buffet restaurants were more likely to sit facing the food, while thinner people tended to sit with their backs or sides facing the buffet. Thinner people were also more likely to put napkins on their laps, a minor way to add friction to getting more food. Breaking out of bad habits isn’t easy. It takes time and repetition. But as you work toward forming better habits, you can, at the very least, incorporate these simple reverse-engineering strategies to help you avoid becoming one of the 80% of people who throw in the …

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16 January 2020The best way to ditch bad habits: what science can teach us

Ian Hamilton and Sally Marlow It’s a new year and many people are in the mood for making a fresh start. And that often means giving something up (cigarettes, alcohol, junk food). Unfortunately, the odds of sticking with new year resolutions are not good. Come February, 80% of people will have given up giving up. So what can we learn from the 20% who make it? Some might just be lucky, but most – whether they realise it or not – will be using techniques based on scientific evidence. While you might feel you have little in common with people who overcome drug dependency, you can benefit from the techniques that have been shown to help this group. The two Ps Perseverance underpins most stories of successful change, and it can take anywhere from six to 30 attempts to quit for those dependent on drugs to become abstinent. While these numbers might seem off putting, it’s important to be realistic about the need to persevere. Incremental change is known to be superior to overly ambitious targets – appealing as they might be. This leads to the second “p” - planning. Conventional wisdom suggests that planning improves the chances of success, but there is evidence that unplanned attempts to quit smoking can be just as successful. Good news for anyone embarking on an impromptu attempt to change. So although spontaneous attempts can be successful for smokers, picking the right day to start changing other habits is likely to play a part. We know that motivation and energy fluctuate, so think about when you will have maximum levels of both. Starting well gives the initial encouragement needed to get to day two. Learn from lapsing Having a lapse shouldn’t be viewed as a failure or used as an excuse to give up. It can be tempting to view change in a binary way - success or failure. Instead, view a lapse as an opportunity to gain insight, reflecting as honestly as possible on why the lapse happened and how this could be avoided or counteracted on the next attempt at change. Research has repeatedly shown us that these processes are crucial for changing ingrained habits, so much so that in the world of addiction, treatment is often referred to as “relapse prevention”, to acknowledge that treatment is as much about preventing the negative as it is accentuating the positive. High levels of self-efficacy (a belief and confidence in personal ability) when trying to change behaviour predict ultimate success. Factors that increase self-efficacy include self-talk (“I can do this”), previous success at changing other behaviour or habits, and affirmations from others. Cultural differences can influence how comfortable and skilled an affirmation is. The way Americans routinely affirm each other is in contrast to those in the UK who tend to be suspicious of affirmations. Believing change is possible can be undermined by “anticipatory anxiety” – when a person expects and fears withdrawal symptoms when changing a habit, such as smoking. The anticipated discomfort is usually greater than the actual experience but can paralyse any attempt to test reality. Rather than focusing on what you are losing by giving up smoking or alcohol, think of what you will gain (more money, better sleep). A useful exercise to help assess personal benefits is the decision balance …

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16 January 2020One size no longer fits all: Creating a Flexible Future in the World of Employee Benefits

Ricardo Almeida You’ll no doubt be all too aware of just how important employee benefits (EB) are to any business when attracting and retaining talent. Along with salary and pension, insured benefits like life, health and disability insurance can be the difference between keeping an employee engaged and losing them to a competitor. It can also be the deciding factor for a candidate when choosing a company to work for. The sheer complexity of running global EB programmes across multiple regions and countries means that employers have traditionally favoured standard ‘one-size-fits-all’ packages, often based solely on an employee’s seniority or longevity within the organisation. Multinationals have sought to achieve economies of scale by delivering standard EB programmes on a global or multi-country basis, no matter what is actually required by different employee groups or different cultures. Yet, over time, it has become increasingly clear that one-size-fits-all strategies are no longer appropriate and that there is a growing need for flexible, adaptable benefits solutions to meet changing trends in the workplace. The many drivers for flexible benefits Along with effective workplace cultures and strong employer brands, employee benefits are used as a differentiator for organisations looking to attract and retain top performers in an era of global skills shortages. The effort-reward imbalance model shows organisations that fail to reward employees for high effort bring out negative emotions and sustained stress in the employee, while the opposite is true for employers who reward their teams fairly for the contributions they make. While attraction and retention are important, there are many other factors that are driving the change towards flexible benefits. One of these factors is the way people are working, and employers need to consider this in their organisational structure and processes, as well as in the benefits they offer. While full-time employees value remote and flexible working patterns that fit around their commitments outside of the workplace, arguably the bigger changes are taking place for part time and non-permanent workers. The so called professional ‘gig economy’–where a growing number of people work on a contract or self-employed basis–has led to more employers than ever choosing to use temporary staff for specific or complex projects. Catering to the benefits needs of these contingent workers is an increasingly significant challenge for global employers. Population trends are also having an impact on EB programmes, which now need to cater to the different requirements of four–or even five–generations in the workforce. With millennials (those born between 1981-1996) set to make up three quarters of the workforce by 2025 it pays to understand what they–and the next cohort, Generation Z (born 1997 onwards) –will expect in the way of benefits and how they will expect those benefits to work for them. Key to the success of this will be recognising the need for flexibility rather than stability. Younger generations are interested in choosing benefits that suit their personal lifestyle now rather than waiting to ‘earn’ standard benefits packages further into the future. Understandably, older employees are likely to be more focused on health insurance and retirement plans. Gender specific benefits A similar picture emerges when we consider why flexible employee benefits are greatly valued based on gender. In general, women are taking a growing proportion of leadership roles in organisations as well as working for longer. Life stages and medical conditions specific to women, such as fertility problems or breast cancer, should be addressed by health and wellness initiatives and yet currently, as a rule, are not. And this is backed up by the thinking of employees. According to research from MAXIS GBN, 56% of people believe that fertility treatments should be wholly or partially funded by an employer.¹ And while social attitudes are changing, women are still viewed as primary care givers for children and elderly relatives, and so welcome benefits that cater for a more flexible work pattern. Building on this theme of change, multinationals are beginning to offer even more new and different benefits to cater for the changing needs of their workforces from surrogacy expenses, help with adoption to transgender insurance policies. Multinational technology companies are leading the way by innovating in this area; by offering new benefits packages that cater to the changing medical needs of their employees they are able to attract a diverse workforce in a fully inclusive environment. This ‘Silicon Valley effect’ is paving the way for multinationals the world over to think differently about the benefits they are offering and consider that they may need to adopt a more flexible approach. Delivering flexible global benefits programmes globally While recognising the need for flexibility is all well and good, designing and implementing flexible programmes is not quite that simple. The transformation from standard to tailored and flexible EB programmes relies heavily on technology that keeps track of costs, measures effectiveness, and ensures the right benefits are allocated to the right people. The sheer power of cloud processing and artificial intelligence (AI) is driving trends and progress. Near limitless number crunching capabilities are now available, so employers can successfully price risk, work through benefits variables, and report on ‘what if’ scenarios as they have never been able to before. One of the fastest growing developments in EB delivery is the availability of online benefits platforms. These cloud-based platforms bring together all an employee’s benefits into a single application, which can be accessed from any device, anywhere in the world. Many have the capability to provide a subscription based or ‘build your own’ benefits package, where employees have a set amount of money to use to choose from a range of benefits–making it abundantly clear where their priorities lie. Technology enables organisations to make this kind of flexible offering viable, without risking overspending or using thousands of work hours to manually calculate benefits packages. Other ways employers are delivering flexibility include: Topping up with voluntary benefits. Enabling employees to choose voluntary benefits to top up, or add new options, using techniques such as salary sacrifice or salary exchange. In this case employees give up part of their salary in return for benefits that may represent more value to them like childcare vouchers or higher value pension payments. E-health solutions. Technology now enables employers to provide previously inaccessible services and allow different coverage to employees depending on their current needs, in the form of apps and other handy tools. Examples of these include virtual GP and telemedicine services, and virtual fertility clinics. Widening the scope of medical coverage. Employers can help to dictate which medical treatments are made available as standard to their employees. On top of this is an opportunity for employers to help improve long term health and happiness in offering more proactive and preventative health benefits like DNA testing. Managing costs in a flexible future A main driver for centralised EB programmes has been the need to control spending, so how does tailoring benefits translate in terms of cost? Employers are facing the conundrum of offering flexible, tailored, appropriate benefits that help to attract and retain the best talent, without it costing more than ever. The power of data analytics, however, means organisations can now understand where their EB budgets are being spent and where they can make reductions without jeopardising value. Also, by reinsuring their EB via a captive, multinationals can have greater flexibility and will have access to more data to understand their spend, helping manage risk and ultimately controlling cost. 37% of EB professionals surveyed by MAXIS GBN also believe that costs could be lowered by offering flexible benefits.² When you consider the advances in technology and data analytics, you start to see how, over the longer term, flexibility could be cheaper and deliver better value. If staff can be actively engaged, choosing benefits to suit their lifestyle, then they will feel individually rewarded and deliver more for their employer. In addition, one of the best ways to understand and potentially control costs is by harnessing the power of health and wellness data. Understanding the true impact targeted wellness campaigns can have on employee health and the cost of medical claims means multinational employers have a great opportunity to improve productivity and save money, by implementing more proactive and preventative health benefits and programmes. Conclusion New business models, cultural shifts in the workplace and wider society and changing employee expectations mean EB strategies are, by necessity, changing. Employee benefits professionals say that their multinational employers plan to adopt more flexible strategies, with almost half of those surveyed believing that high quality recruits value schemes designed around individual needs.² Crucially, by offering employees more tailored EB packages, they may well save money in an environment dominated by avoidable claims and rampant medical inflation. But it is only by harnessing the power of technology that global organisations will be able to deliver a strategy that meets the more varying needs of multiple generations of employees, across regions, while still balancing this investment against the potential cost to the business of failing to attract and keep the right people. No one denies it’s a difficult balance to achieve. However, while building an optimum EB platform is set to be a never-ending journey, all the evidence shows that one size definitely no longer fits all in global employee benefits–so it should be a journey worth making. To find out more about this all-important topic, download MAXIS GBN’s paper “MAXIS GBN Global Perspectives: in the changing world of employee benefits, does one-size still fit all?” References MAXIS GBN research, conducted by Citigate Dewe Rogerson, May 2019 MAXIS GBN Global Perspectives report – May …

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16 December 2019Exclusive Interview – Dirk Hellmuth & Cyril Samson

On Allianz Global Benefits’ 5th anniversary, Dirk Hellmuth, CEO and Cyril Samson, Managing Director, take stock, review the achievements and successes and speak about where they want to be in five years’ time. Global Benefits Vision: Let us start with the highlights of your career(s), with emphasis on global employee benefits or on related fields. Dirk Hellmuth: I have more than 25 years of experience in local and global employee benefits. I started my career at Generali Group where I had several positions in sales, the last one as member of the board of managing directors of Generali Employee Benefits Unit. Based in Frankfurt, Germany, I was responsible for the German-speaking areas and the Central Eastern Europe region. In 2002 I joined Allianz as manager for servicing international corporate clients within the employee benefits specialist department of Allianz Lebensversicherungs-AG; it was called All Net at that time. In 2005 the department was spun-off into a legal entity called All Net GmbH. This was the start of our international activities that led to the launch of the current unit Allianz Global Benefits GmbH in 2014, for which I took over the role of CEO. Cyril Samson: I started working for Allianz 23 years ago, in 1996, directly in the area of global employee benefits. This was the time when All Net was created. I left the Group to head the International Employee Benefits Unit of Gerling Group in Cologne, Germany and re-joined All Net in 2004 as managing director with main focus on key accounts in France and Africa. In 2013 I took on the global coordination of life and asset management, organizing and structuring made-to-measure pension solutions for multinational corporate clients. Finally, I was appointed Head of Sales in 2017. GBV: Let’s move on to recall Allianz Global Benefits’ history since 1996 in group insurance and in global employee benefits. DH: It has, in fact, been a longer journey: From 1996 to 2004 All Net was predominantly servicing multinational companies that were headquartered in the Group’s flagship countries such as Germany, Italy and France – and with focus on pooling and local employee benefits plans. Realizing its strong growth potential, we successfully launched our captive program in 2008. To be honest, however, I have to say that the servicing approach was not completely developed at that time. We switched to much more proactivity somewhere between 2010 and 2013 by getting officially mandated by Allianz to set up a global network and to offer corporate life, pension and health solutions for multinational corporations around the entire globe. This was crucial for our development to where we stand today. We adopted a really dynamic approach in the years 2016 and 2017 with a clear understanding of what our value proposition to the market should look like and with the aim to offer our customers the full range of global solutions available in employee benefits. Thereby, our special focus in this period was on the new global pension and global underwriting solutions. As from the beginning of this year, we have started working on innovative solutions with focus on delivering advanced digital experiences to our customers. We have been strongly investing in digital reporting, data analytics, customer interactivity and in the offer of flexible and holistic solutions related to global employee benefits problems. We see this as our journey from being a reactive service provider to becoming a flexible, innovation-driven service partner. GBV: Are there any major achievements since the launch five years ago that you would like to highlight? DH: What I consider a major achievement is that we managed to position ourselves as a global line within Allianz Group, and more importantly, that we are also perceived so by the market. A second accomplishment in the last five years is the steady increase of technical features of both our risk management and pension solutions. GBV: What are Allianz Global Benefits’ currents assets in benefits and in global benefits: relationships with insurance carriers, countries, products, teams, structure/organization? CS: When we talk about the network, we clearly speak about people. With around 350 employee benefits experts worldwide, located within our network partner companies, we are clearly a people business. Currently our network includes over 110 insurers in more than 95 countries. Next to this there is the network’s core team of further 40 employees. We have sales directors and sales account managers; supported by products & solutions, tender and network management, distribution, finance, data & digital solutions, and marketing & communication. We are located in five regional hubs: two in Germany, one in London, U.S. and Singapore respectively. 65 percent of our network is Allianz-owned. To ensure consistent standards of quality throughout the entire network, our network insurers undergo a clear qualification and onboarding procedure. It means that they must be top-notch in the corporate life, pension, and health segment. It also means that we carefully check if they fit into the holistic approach we offer to our multinational clients. Our aim is to ensure excellence in service delivery on a global level, so it’s about quality rather than quantity and about long term partnerships. GBV: I had a question about the expat business but perhaps you can cover that by commenting about your product listing? DH: Allianz Global Benefits offers the full spectrum of employee benefits solutions currently available on the market: This means solutions for corporate life, accident, disability, health and pension. Furthermore, we offer the complete range of global employee benefits programs for all relevant stakeholders in multinational companies: pooling, global underwriting, captive and global pension. For international health solutions, and specifically the coverage of expatriates, we have a very strong relationship in place with Allianz Care. GBV: In terms of protection products, you do have pooling, global underwriting, and captives; perhaps you’d like to elaborate a little more on what you do in pensions? CS: Indeed, we support multinational clients with corporate pension solutions in about fifty countries. Together with our local partners we help our multinational clients to look at pensions on a local basis, especially when it comes to new regulations. In these cases, we proactively inform our clients and present them our local pension solution. We also work on top of national solutions. For this we have the support of one of the world’s largest life insurers – Allianz Lebensversicherungs-AG – with more than Euro 250 billion in assets. We use this strong balance sheet to take over employee benefits risks and to support our local partners when they deal with large multinational corporations. We are currently facing very low returns and interest rates in the pension business, leading to a lot of switching from guaranteed products to variable and non-guaranteed products. In the last couple of years we were able to acquire a number of national champions in Europe as clients; one example was in France where we were able to create the first sizeable cross border de-risking case: the transfer of Euro 755 million of pension liabilities to the balance sheet of Allianz Lebensversicherungs-AG in Germany. So the coordination was done by Allianz Global Benefits, implemented by Allianz Lebensversicherungs-AG and Allianz Pension Consult in Germany, and by Allianz Vie in France. An additional way to offer service in pensions is to provide our clients with a centralized overview of the local pension plans they have with us globally, including information about premium, covered groups, type of coverage, and so forth. This coordination and reporting solution helps multinational corporations to improve the governance for their pension management. It needs to be said again: protection, including health, and pension are the two pillars of Allianz Global Benefits. We serve the clients both ways, which means that when we discuss protection with our clients, we also discuss pension; and when we discuss pension, we also include protection. GBV: What are Allianz Global Benefits’ current key numbers and relevant KPIs? DH: To give you some figures we have over 300 MNC clients, as leading employee benefits captive network we have 27 global captive clients, 89 pooling clients and 3 global underwriting clients. We are market leader and first mover in global pensions – with two major cross-border de-risking cases in this area – and we are market leader in the implementation of local employee benefits plans for MNCs. GBV: What’s your overall vision for Allianz Global Benefits in Global Benefits, and what is your strategy in employee benefits/global employee benefits? DH: We aim to become the best corporate risk and pension solutions provider worldwide. I believe that Allianz Group has all the different components in place to offer innovative employee benefits solutions now, and also in the future. It is our job, as Allianz Global Benefits, to team up for excellence and to organize the implementation of the solutions. This involves listening to multinational corporations and their employees, learning about their challenges, understanding what they are looking for, working on quality solutions together and, last but not least, executing on the promise we make. CS: In the end, employee benefits are made for employees and our mission statement to our multinational corporate customers is that we secure the future of their employees around the globe. It is crucial to keep our promise to the employer! Employees should know that working with Allianz means that the promises made to them are delivered. Therefore we strive to pay maximum attention to service quality, making sure that all the elements of the agreement work properly. GBV: Allianz has an extremely strong presence in property/casualty around the world. Are there any specific actions to drive cross-selling from a P/C or other portfolio? CS: Within Allianz we have created a One Allianz approach, a strong and close strategic partnership with the other Allianz global lines; among them Allianz Global Corporate & Specialty and Allianz Partners. This approach is key to our network organization and the internal community has a very good understanding of what our multinational corporate clients would like to get from the Allianz organization as a whole. Here, the aim is again to reinforce long-term partnerships with our major clients in all business segments. DH: Yes, and these actions build on our Allianz culture towards more agility, customer orientation and collaboration. This mindset is lived in the company and also externally in meetings with multinational corporations where very often representatives of two or more global lines participate on behalf of the Allianz Group. This is something corporations like to see; that the left hand knows what the right hand is doing and they get this feeling when they see the entire portfolio that they have placed with the Allianz group. That is a really cool thing! GBV: Do you handle SME/SMB in a specific way? DH: This is a good question. For historical reasons, global employee benefits programs have been focused on offering predominantly tailor-made solutions to very large companies. However, we also see the need to work on more intuitive product solutions for mid-size companies, mainly due to limited resources within their HR departments. We are in discussion with several of our network partners regarding this and already have mid-sized solutions running in some countries. Our aim is to extend our offer towards this group of companies in the future. CS: Also, we are aware of the existence of so-called “rising stars”. Take Google for instance, 20 years ago one would not have anticipated that the Google would be what it is today. We aim to identify these rising stars in every country we operate. Many are in fact self-insured, some bring innovations that may matter to our own industry, some bring new ideas. Our concern is to treat them a bit differently than normal SMEs and also offer them tailor-made solutions. GBV: What do you regard as the main trends and challenges in the global employee benefits industry? CS: Compared to the first days of pooling, the business has become much more sophisticated. Also, the current trend is clearly towards more risk management. Today, clients consider employee benefits to be part of their global strategy or global governance. They expect to be able to choose from the different employee benefits solutions that are available, settling for those that fit into their own strategy and decision capacity in a flexible and simple way. It is crucial for networks to be able to offer all the solutions in order to prevail in the future. I think what is important to understand is that the business is partly organized by the providers, but also by the brokers, the consultants, the clients themselves and their employees. And, as said before, there is a very clear pressure from employees for simplicity and better understanding. DH: I fully agree with what Cyril said. Ageing workforces, cost pressure, globalization and digitalization – all this leads to the fact that clients are looking for solutions that are easy-to-understand, as well as simple products and processes. Furthermore, they expect to get guidance from our side on what they have to do in the area of employee benefits. Advanced technology in data analytics and sophisticated reporting tools are key to be successful in the future. Clients need to experience that we, together with them, are able to reduce complexity on both local and global level. This is one of the real values of working with an international network such as Allianz Global Benefits. GBV: With respect to pooling, after 50+ years, only 3,000-4,000 pools are in existence today, vs. 80,000-90,000 multinationals. We are still at a very low penetration rate. What is your opinion about this fact? DH: Many enhancements were made in the pooling offer throughout the years. Nevertheless it seems that the other risk management programs support the needs of multinational clients and their increasing governance requirements better, whether for risk retaining, reporting or cost reduction. Furthermore, employee benefits have shifted from purely being HR’s concern towards being looked at from a risk management, finance and procurement perspective. This has generated a special demand that cannot be covered by pooling alone. It is therefore comprehensible that the pooling market has not grown in the last decades. Pooling remains a popular option for multinational corporations – it is the ideal solution for multinational companies looking for an entry-level program to manage employee benefits on a regional or global level. After gaining a certain maturity – an increase in size, a change in risk behavior or an increased data availability – a pooling program can pave the way for a client to switch to the other risk management programs, a global underwriting solution and subsequently at a later stage, a captive solution. GBV: EB captives appear to have taken off in the past five years. How do you explain this fact? DH: I see several points here: Due to globalization and increased corporate governance requirements, multinational corporations started to consider the idea of centralizing the control over the global employee benefits spend. Employee benefits were placed into a global perspective and even further into a risk management context. On corporate side this means that HR and finance are coming together to jointly look at this issue. P&C captives have been opened for employee benefits business and corporations are using the already existing infrastructure in the P&C captive for the optimization of their employee benefits business in the captive as well. There has been a lot of investment in this area from corporate side in the last years and I strongly believe that the number and importance of captives will further increase in the future. CS: We started the captive business some ten years ago, and now we have 27 captives running. The collaboration of risk managers and HR, supported by procurement or not, allows us to deliver on our promise to achieve high information levels and economies of scale through taking risk into the captive. Many multinational corporations in the past five years have been considering captive as a possible solution to manage their employee benefits by looking at the impact of this solution for their company, assessing their interest of putting risk in an existing captive or creating one. Maybe a short comment on medical business at this point: When we initially started captives, we were quite reluctant to include medical business into a captive. We soon realized that a captive actually seems to be a quite interesting option because it offers information on a regular basis – quarterly most of the time – and this information has a lot of value. Clients get an early glimpse of the trends in medical costs in the different countries, medical inflation, medical consumption in the future, etc.. This ensures better management of medical plans, making captives a very important tool in terms of risk management. The latest trend we see at the moment in some parts of the globe, is an interest to also put defined benefits risk into the captive – that is, longevity risk from a pension plan. We are seeing some options for organizing this through swaps that have been transferred to captives, or reinsurance direct to the captive. This is also something consultants are looking at very carefully at the moment; to determine whether they have some interest in terms of cost of capital or mitigation of risk to put such a risk into a captive next to life, disability, and medical risks. GBV: There is no association of global EB providers and numbers are hard to come by. What is your position/opinion in this respect? DH: For me, direct contact to the market, to customers and brokers is more important than an association of peers. Also, I think that there are already a number of successful client and broker associations in place that bring all players of the employee benefits industry together, both on local as well as global level. GBV: How do you see the future of social security and what impact on employee benefits? DH: Social security systems all over the world are coming under increasing pressure; we read about it in the papers every day. Our purpose is to secure the future of the employees of our multinational corporations around the globe - employee benefits will matter even more in the future than now. CS: I think it’s important to understand that social security systems are, as you know, very different around the globe. If you create a table where on one side you have the sustainability of the social security systems, and on the other axis, the adequacy of the social security system you will see that you don’t receive a clear global country overview. Some systems are sustainable but not adequate, some are adequate, but not sustainable and this uncertainty is exactly what clients are afraid of. This is where we come into play. We inform our clients about the employee benefits solutions that Allianz can offer in the eligible country, given that the respective states enable us to do so. We are aware of the fact that medical and pension may also become real social security issues in the future. Therefore, our offering is always based on these two pillars: protection and pension. GBV: What is your goal for the next twelve months: Where do you expect Allianz Global Benefits to be end of December 2020? DH: We will be launching a new corporate client portal still this year. It is an operations-driven initiative and concerns the enhancement of our reporting system by the building up of a new portal - a key client touch point with easy access. With focus on health, it will include very dynamic reporting functionalities and offer enhanced delivery of data analytics and insights to our customers. In the next twelve to fifteen months, we aim to create more simplicity in our business segment. We know about the complexity of e-business related topics, nevertheless, we want to offer our clients more simple and intuitive products, with full transparency about what they have covered on a worldwide basis and in an understandable language. It is about not only meeting customers’ expectations, but exceeding them. GBV: Where do you want to be in 5 years’ time regarding your customer model? DH: Next to achieving simplicity, we aim to become a more customer centric organization; a global employee benefits network that offers a multiplicity of corporate life, pension and health products, processes and tools around what multinational corporations need. We aim to top our competitors, transform our organization to become digital and scalable, and last but not least, rebalance our portfolio toward the most attractive geographies and business segments. We are just at the beginning of our journey. So outperforming, transforming, and rebalancing – this is the overall Allianz Group strategy in order to provide best value for customers. GBV: What will the future employee benefits universe look like and what will be the biggest challenges you think you will be facing at Allianz Global Benefits and in the industry in general? CS: Serving customer needs is key to being successful, and when I speak about customers I mean the corporates and their intermediaries. This is the real driving force of our work - their desires, their needs. Furthermore, our products, services and processes should be simple and efficient for both employers and employees. This is the course we want to take. DH: People’s work and life realities are changing: Globalization demands an increased mobility of people, people will have to work longer – and will live longer, millennials start their work life with totally different visions and desires. This has to be considered for the planning of employee benefits. Just offering financial rewards will not work, same as a one size fits all approach to employee benefits will not. It is about understanding the workforce desires, offering flexible overall packages that deliver real value to a diverse workforce, allowing employees to choose the benefits that best fit their needs and embracing new technologies to create a real added value for the employee and the employer. We see a rising importance of physical health and mental wellbeing, and our consumers get smarter and more independent in decision making. A clear global employee benefits strategy, executed locally, is key for an employer to adapt to these trends. For Allianz Global Benefits this means to be able to manage risks and to be ready to jump on new opportunities. It means to build simplicity around products and processes and last but not least to be the trustworthy partner for innovative and enhanced employee benefits solutions on local and cross-border level, wherever …

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16 December 2019Allianz Global Benefits’ Perspective on the History of Pooling

By François Jacquemin and Michael Scheu Allianz Global Benefits is the global employee benefits network of the Allianz Group specialized in implementing local employee benefits products, insurance solutions and services into global programs. The headquarters of the network is based in Germany and operates a strong global network of more than 110 Allianz subsidiaries and selected external insurance partners in over 90 countries. Leveraging on the geographical scale, the expertise and the customer centricity of its network partners, AGB addresses the needs of multinational companies of managing employee benefits globally.  AGB is a one-stop solution provider, this means that our clients can expect the full range of corporate life, accident, disability, health, pension and asset management solutions tailored to their needs. The high quality of local employee benefits plans provided by our local insurers is the backbone of our global solutions that include Multinational Pooling, Global Underwriting, Captive Reinsurance and Global Pension. Our aim is to provide multinational companies a truly flexible and holistic set of solutions for their global employee benefits programs delivered by the world’s most trusted financial service provider. The beginnings of the Allianz Group employee benefits network date back to 1978, when four leading European life insurance companies – Allianz Lebensversicherungs-AG in Germany, AMEV-Utrecht in the Netherlands, Royale Belge in Belgium and Eagle Star in the UK - founded the AREA Benefits Network with headquarters in Brussels. Allianz’ business with companies, so-called “group insurances”, had been booming in Germany as a consequence of the statutory provisions of 1974 on the vesting of company old-age pensions. The late 1970s were also marked by internationalization and an increasing number of companies operating abroad. Offering German companies with international operations a wider service was the reason for Allianz to expand its involvement in the joint project with the other four insurers. The idea of AREA was to enable multinational corporate clients to provide company benefits in their respective countries by combining national group insurance contracts of these companies into a worldwide risk network – in other words to provide “pooling”. The cooperation network allowed Allianz to respond to emerged client needs, in particular the ability to offer employee benefits via its partners abroad while achieving cost savings and profit-sharing. The pooling solutions were based on the concept of economies of scale by combining independent benefit group contracts under-written by AREA partners in different countries to deliver an international dividend to the client at the end of a calendar year. Depending on their size, multinational corporations had the option between an own pooling arrangement or the participation into a pooling arrangement together with other multinational companies, a so-called multi-employer pool. The idea of profit sharing in the field of employee benefits was still an innovative one at that time, the birth of pooling having only taken place in the mid-sixties. In a period characterized by predominantly very regulated insurance markets, pooling often enabled cost reductions for internationally operating companies that could not have been achieved on a single country level. One has to bear in mind that at that time international accounts were solely calculated on paper and data sharing between the different parties was carried out via fax or via mail. In 1994 Allianz decided to leave AREA to found its own employee benefits network. Since the mid-1970s Allianz had constantly reinforced its activities abroad and therefore increased its worldwide presence. While the share of foreign business was still small around 1970, less than 3 percent, already 20 percent of premium revenues came from abroad in 1984. In 1989 Allianz could list 158 companies on its world balance sheet, the foreign share of the group’s total turnover now amounting to about 40 percent¹. The rationale for an own network was to use the company’s global footprint as well as vast knowledge to serve the needs of multinational companies from within the Group. Cooperation with selected external partners were entered in some markets in order to ensure a comprehensive and seamless group insurance coverage for companies wherever they were located. All Net, the Allianz International Network for Worldwide Employee Benefits was then subsequently founded in 1996 in order to assist corporate clients with employee risks and savings and to take advantage of buying requirements of large multinational clients. With a network coverage of around 40 countries, the All Net Central Unit was based in Stuttgart, close to the German life unit of the Allianz Group, with regional hubs in Trieste and London. The network’s members included the life insurance operations of Allianz, AGF (France) and RAS (Italy), as well as other well-known names as Sun Life (Canada), Meiji Life (Japan), Tryg Baltica (Denmark) and later in 1999, AEGON Levensverzekering N.V. (Netherlands). By end of 1999 the network could announce a significant growth of new business as well as partnership capabilities, with 78 network partners in more than 60 countries. Renowned insurance partners joined the network in the subsequent years, The Hartford for the American market in 2008 and Legal & General for the UK in 2010. It is in the 1990s that the slogan “Think global, act local” appears for the first time. All Net’s primary proposition was to assist its international clients with the worldwide coordination of their employee benefits plans with the main focus on pooling solutions. This strategy was in line with the market needs as multinational companies of all sizes were increasingly becoming more international and therefore looking for information on local employee benefits as well as options to better manage claims and reduce their costs in this area. All Net provided global solutions for third country nationals and expatriates, customized reinsurance and risk management solutions for international companies - captive solutions were successfully introduced in 2009 - assistance to new and start-up companies in coordinating employee benefits programs worldwide, information on products, practices and changes as they affected clients in the local market. With a clear focus on risk management solutions, innovative pooling arrangements (All Net Secure Systems 1-3) were developed depending on the companies’ size of group contracts. Pooling at a glance The next milestone from an historical perspective was the Allianz Group’s launch of Allianz Global Benefits five years ago, in 2014. The purpose was to globally coordinate the provision of employee benefits solutions and to respond to the increasing market trend of multinational companies shifting from looking at employee benefits at a country level towards more centralization. It made sense to offer solutions and service through a global business line as the market had become even more international with an increasing demand from customers for multinational solutions. Clients could benefit from tailor-made solutions reflecting the individual situation, optimized employee benefits schemes across countries, a clear overview of the worldwide employee benefits and a more advanced, international risk management perspective. All Net and its existing global and local network of Allianz subsidiaries and selected external partners were integrated into this new unit. Its offering included the full range of corporate life, health, pension and asset management solutions available within Allianz Group with one face to the customer. New features, which were set up with the launch included the cooperation with other Allianz Global Lines (e.g. Allianz Global Corporate & Specialty and Allianz Global Investors) as well as the expansion of the existing cooperation with global broker firms. For instance, a cross line collateral solution was developed to cover large risk and employee benefits, demonstrating Allianz client-centricity. Looking again at the partner structure within the network one can observe that the ratio of external network insurers has continuously increased in the course of the years, from 15% in the beginning to 35% today. The strategy behind this is to grow with the need of our clients independently if Allianz has an own subsidiary in the specific country. To allow such geographical grow the aim is to cooperate with leading local market insurers to provide multinational corporations and global brokers with the best products and solutions available on the market. The most recent additions to the network include SSQ Insurance in Canada, Aseguradora General in the Central American Region and last but not least a full cooperation with the AIA Asia Benefits Network (AABN). Today, Allianz Global Benefits offers multinational companies the most appropriate international programs for their specific needs, which are Multinational Pooling, Global Underwriting and Captive Reinsurance. Pooling is one of the options - the global program has been continuously improved to suit multinational corporation’s changing requirements. Having started with two pooling options in the times of AREA the program was further enhanced with the founding of All Net to three options, the so-called All Net Secure Systems 1-3. The idea behind this was to give companies the opportunity to not only choose the right pools depending on the size of their group contracts but also the level of risk that the company felt comfortable with. Responding to the market needs for cost reduction, pooling clients were able to substantially reduce their annual costs of insuring their employee benefits, as a general rule group life and accident benefits producing a greater dividend return than medical or disability. In addition to the Stop Loss Cover, a yearly account guarantee and essence to every pooling arrangement since its establishment, the risk management tools were enhanced by new features: Catastrophe Cover to cover the pool balance in case of three or more claims in any single event exceeding the defined retention High Claims Cover to cover the pool balance in case of high employee benefits risks with the possibility for the client to select the level at which high claims are capped before they are charged to the pool Limited Loss Carry Forward Cover as extended account guarantee by looking at the experience over a three year accounting period and the possibility to carry forward results within this period The international risk management program that is offered to multinational corporations today is still based on the consolidation of local employee benefit plans into one pool for experience sharing purposes. The feedback from the market in the course of the last years has motivated us to include more desired client and broker risk management experiences in our pooling proposition and to further add options to our program. This is reflected by the market trend to stronger link employee benefits to risk management and viewing employee benefits not only as costs but also as a liability or a possible opportunity. The advantage for multinational companies of linking employee benefits to risk management is the realization of long term results, including the optimization of cash flows and the creation of sustainable business. Allianz Global Benefits addresses the diverse risk management needs of its customers and is currently offering five different pooling systems. It ensures that multinational companies of all sizes can benefit from pooling, the choice of the right pool depending on a number of factors, including size and composition of the pool in combination with a company’s risk profile. The loss protection of the pool includes the following risk management tools: Three Year Stop Loss makes it possible to look at the experience over a three year accounting period Stop Loss 125 allows, in the event of an overall loss, to carry forward a year-specific loss up to 25% of the pooled premium and balance it with positive results in subsequent years An additional feature of the current pooling program involves the definition of aligned and increased regional free cover limits. These depend on the market’s maturity and differentiate between super mature, mature and emerging markets. For multinational companies, this means reduced complexity and smoother onboarding processes during the implementation of a pooling program. The pooling program approach of Allianz Global Benefits was set up in line with the Group’s values regarding compliance and transparency and allows multinational com-panies to oversee their employee benefits risk situation firm wide. It follows a clear and customer focused value chain, comprising the following steps: IDENTIFY the subsidiaries that are already insured by our network insurers ASSESS the overall potential for a multinational pooling program ILLUSTRATE the pooling solution that is best suited including potential savings IMPLEMENT the program in close collaboration with the corporate client MANAGE the transition of business into the pool EVALUATE the development of the program via annual consolidated reports Pooling systems requirements Whereas our predecessor, AREA, started as a pure pooling network, Allianz Global Benefits has expanded its offer and today offers multinational companies a complete range of global employee benefits programs for all company key stakeholders. This includes three types of risk management programs: Multinational Pooling – a risk sharing program that allows multinational companies to share in the results of local employee benefits plans across the globe Global Underwriting – a risk transfer program with centralized underwriting of local employee benefits plans to take advantage of global economies of scale Captive Reinsurance – a risk management program that reinsures local employee benefits plans into a corporate’s own captive insurer Pooling as entry-level program Comparing the three risk management programs, one can observe that pooling is becoming a saturated market with limited impulses. This is in line with the results from a client survey conducted by Allianz Global Benefits three years ago. Only 7% of all potential clients were further considering pooling in the future. It seems that, despite the enhancements made in the pooling offer throughout the years, the other risk management programs seem to offer integration that support the needs of multinational clients and their increasing governance requirements. Whether for risk retaining (increased risk retaining as risk retaining options that pooling offers are modest), reporting (quarterly reporting available instead of the annual report within pooling) or cost reduction (the offer of discounts instead of dividends in the case of global underwriting). This is also justifiable as employee benefits have shifted from being a pure HR topic towards being looked at from a risk management, finance and procurement perspective. Ideas related to the P&C area, such as central buying, found their way into the employee benefits world, generating a special demand that cannot be covered by pooling alone. Therefore it is comprehensible that the pooling market has not grown in the last decades. Nevertheless, pooling remains a popular option for multinational corporations – it is one tool of many to optimize their global employee benefits on a worldwide level and the ideal solution for multinational companies looking for an entry-level program to manage employee benefits on a regional or global level. Once a pooling program has gained a certain maturity - an increase in size, a change in risk behavior or an increased data availability - it can pave the way for a client to switch to the other risk management programs, a global underwriting solution and subsequently at a later stage a captive solution. Evolution steps We are eager to see and contribute to the evolution of the employee benefits risk management programs in the coming years and looking forward to this journey together with our clients and pooling consultants across the world. The fast-changing world, including short life cycles of projects, does not allow to set roadmaps for 10 years anymore. It demands for solution providers to be agile and ready to jump on new opportunities. We consider pooling as one of the key programs to service multinational companies in the long term and therefore an important component of our holistic offer: The program is an appropriate entry port to global risk management programs and valued by many multinational companies as it fully addresses their needs for transparent reporting, financial savings, global partnership and risk management. The major challenge – that we are ready to meet – will be to even more tailor the product around the clients’ needs and enhance their experience with data, reporting and service. In a long term view, data management and advanced technologies will push for more transparency for the clients within the program. Allianz is strongly investing in state-of-the-art data analytics in order to transform the organization to become simple, digital and scalable. Will big data and the subsequent possibility of stronger upfront steering allow for pooling to be replaced by global underwriting? Or will we see more combined approaches? Either way, we at Allianz Global Benefits feel prepared to meet the future demands and expectations of our clients. Due to extensive investments in the current setup of our global programs we have successfully bridged the gap between desired client experiences and the original pooling concept. We have constantly evolved our offering which today includes all risk management programs available in the employee benefits market.  References Allianz. The Company History 1890-2015, Barbara Eggenkämper, Gerd Modert, Stefan …

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15 December 2019Are ‘vaping’ and ‘e-cigarettes’ the same, and should all these products be avoided?

Allison Kurti As concerns over vaping continue to grow, researchers and public health officials are investigating the causes of more than 40 deaths and 2,000 illnesses. It’s confusing even for experts. The term “e-cigarette” refers to a battery-powered device used to inhale an aerosol that typically, but not always, contains nicotine, along with flavorings and other chemicals, but not tobacco. The National Institute on Drug Abuse (NIDA) and the Centers for Disease Control and Prevention recognize e-cigarettes as a broad category that includes a variety of different products that operate similarly and contain similar components. So, “e-cigarettes,” “vapes,” “vape pens,” “Juul,” etc., all refer to the same class of products, with “e-cigarette” being the product itself, and “vaping” referring to use of the product. The devices can have different uses. Although e-cigarettes in the U.S. are regulated as tobacco products rather than smoking cessation tools, Juul – the biggest maker of these devices – has marketed its product as a way for smokers to quit tobacco, with its website saying that its products are a “satisfying alternative to cigarettes.” There are other vaping products, however, that are designed more to inhale THC (Tetrahydrocannabinol). What is the cause of vaping-related lung injuries? The lung illnesses and deaths associated with using these products are sometimes referred to as “e-cigarette, or vaping, product use-associated lung injury” or EVALI. We know that 84% of those who have died reported vaping THC, either exclusively or in combination with nicotine. Many obtained their product that contained THC, the psychoactive ingredient in marijuana, through informal sources such as friends or in-person or online dealers. CDC laboratory testing of fluid samples from EVALI patients has found vitamin E acetate, a synthetic form of vitamin E, at the primary site of injury within the lungs. More research is needed, however, to rule out other chemicals that might also be associated with EVALI. Although more testing is needed, vitamin E acetate appears to be much more common in products that contain THC. Those in the legal marijuana industry say vitamin E acetate is used on the marijuana black market to stretch the THC oil in e-cigarettes because it has a similar appearance and is much cheaper. One recent report found that among EVALI patients in Utah, 17 out of 19 (89%) of THC-containing products had vitamin E acetate, whereas 0 out of 20 (0%) of nicotine-containing products had it. The CDC recommends that people not use vaping products that contain THC. The American Medical Association has called for a ban on all vaping and e-cigarette products that are not deemed tobacco cessation products. No vaping or e-cigarette products currently on the market are considered tobacco cessation …

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15 December 2019Exercise Before Breakfast Works Best

Rob Edinburgh Exercise is recommended for people who are overweight or obese as a way to reduce their risk of developing type 2 diabetes and cardiovascular disease. But people don’t always have time to exercise as much as they would like, so finding ways to increase the health benefits of exercise is important. Our latest research has found a way to do just that, and it’s to do with timing. This means you might be able to get away with doing less exercise if other commitments, such as family and work, always seem to get in the way. To explain how this works, it helps to know a bit about insulin. Insulin is a hormone that helps control blood sugar levels. One of the main effects of insulin after a meal is to allow sugar in the blood to be transported into muscle, where it can then be stored or used as a fuel for energy. When people don’t exercise enough and become overweight or obese, their bodies have to produce more insulin for the hormone to have this important effect. In other words, they become less sensitive to insulin. This is one of the reasons why being overweight increases the risk of getting type 2 diabetes and cardio-vascular disease. One of the main health benefits of exercise is that it improves our response to insulin and we can better control our blood sugar levels – even if we don’t see this change happening. It is now becoming clear that when we eat in relation to exercise could be important for this insulin response. Our study looked at the responses to six weeks of exercise, which was supervised cycling for 50 minutes, three times a week. In one group, overweight or obese men exercised before breakfast (fasted state) and showed an improved insulin response after the training. That is, they had to produce less insulin to control their blood sugar levels. This suggests that they had a lower risk of diseases such as type 2 diabetes after the training. But the men who performed the same exercise after eating breakfast did not show an improved blood insulin response. The men who exercised before breakfast also burned about double the amount of fat during exercise than the group who exercised after breakfast. Current evidence suggests that this increased fat burning during exercise may explain why that group showed improved health benefits. But don’t expect to lose more weight A common misconception about exercise in the fasted state is that the increased fat burning will lead to increased weight loss. But for weight loss, the important factor is energy balance. This is the amount of energy eaten as food and drinks minus the amount of energy that is expended by the body, partly through exercise. There is some evidence, that, over a short period (24 hours), skipping breakfast altogether and doing exercise may create a more negative energy balance, compared with eating breakfast and doing the same exercise. Yet evidence also suggests that when it is only the timing of meals in relation to exercise that is changed (not skipping breakfast), the amount of weight lost will be similar even if fat burning is different. So increased fat burning during exercise does not lead to greater weight loss, unless the energy balance (for example, energy intake or energy expenditure) is different. It is now important to repeat the study in women, although it is likely that the same effect would be shown with exercise before versus after breakfast. This is because for men and women eating breakfast before exercise reduces fat burning during the exercise. This research was also for moderate-intensity endurance exercise, such as cycling and jogging, and the results don’t necessarily apply for high-intensity exercise or weight lifting. Finding ways to increase the health benefits from exercise may help to reduce the increasing prevalence of diseases such as type 2 diabetes. The new research suggests that for your health it could be better to move your feet before you …

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15 December 2019Controlled Breathing for the Rest of Us

David Shearer Professional sport is full of stories of elite athletes “choking” emotionally and mentally under the pressure of competition. One famous example is golfer Greg Norman, who was leading the 1994 U.S. Masters by six strokes at the beginning of the final round, but then lost by five strokes to Nick Faldo. And England football teams are well known for their struggles in penalty shoot outs. But the occasion I remember most vividly was watching the late, great Jana Novotna facing Steffi Graf in the 1993 Wimbledon final. Having dominated the match, and leading the final set 4-1, Novotna served a double fault. After this simple error, Novotna’s match fell apart, and she ended up quickly losing the set 6-4. It was as if someone had flipped a switch, turning her from elite professional into nervous club player. Many of us who have played a sport can sympathise with the phenomenon of choking. And as a sports psychologist, I am interested in what happens mentally during those crucial moments before catastrophic drops in performance. Understanding the processes and factors involved could allow us to develop ways to help athletes avoid choking, or regain control after it takes hold. Researchers have shown how performance anxiety can be split into a mental (“cognitive”) component, represented by worry (“I am worried that I may not perform as well as I can”) and self-focused attention (“I am conscious of every movement I make”), and a physiological anxiety represented by arousal (fast heart rate) and tension (feeling on edge). The ability to respond positively to anxiety reflects the level of control the athlete feels they have over a given situation, and their own response (“I believe I have the resources to meet this challenge”). This perception of control is important, because it reflects whether athletes see the situation as a threat or a challenge, which ultimately might change the way they perform. Many anxiety interventions focus on ways in which we can control our physiology to ensure that athletes keep a “cool head”. The simplest of all relaxation strategies is slow diaphragmatic breathing, similar to that used in meditation and yoga. We now know that breathing in this way can have a number of benefits. The most obvious benefit is the immediate effect upon our physiology. If you feel yourself becoming stressed, you will notice how your heart rate increases and your breathing becomes more shallow and sporadic. Concentrating on your breathing and aiming to slow it down will reduce your heart rate and make you feel more calm and in control. This type of breathing allows us to “hijack” the body’s natural blood pressure regulation system and to increase our heart rate variability (HRV). HRV is the varying interval in our heart rate, where an increase is reflective of a greater capacity to deal with stress. This is because our heart is required to adapt appropriately and quickly to environmental demands (from a state of rest to a “fight” response, say), in order to drive other physiological systems such as the delivery of oxygen to the muscles. If your heart can go from slow to fast and back again quickly, you are more adaptable to the demands you may face, moment by moment. Breathe to win In our work with elite athletes, we use a technique called HRV biofeedback. For this, we ask athletes to pace their breathing at around six breaths per minute, while providing visual feedback of the effect this has on the heart. This breathing rate automatically results in a synchronisation between breathing and heart rate, such that our heart rate increases on inhaling, and decreases on exhaling. This coherence, technically known as “respiratory sinus arrhythmia”, naturally increases heart rate variability, while decreasing blood pressure and lowering our average heart rate. Our aim in using HRV biofeedback is to teach athletes to control their breathing without a visual guide. Then, when they feel under pressure, they have a go-to intervention which helps them return to their ideal performance state. It also allows them to focus on what is important in the environment and in their mind – positive, logical, helpful and controllable thinking. Our athletes have found this technique helpful, both preparing for, and during competition, and we are beginning to use it in very specific contexts such as the “taper” period in elite swimming. The taper period is the final training phase (two to three weeks) before an important competition such as the Olympics, where athletes reduce the volume of training they are doing. This a period of emotional turmoil for swimmers – and we are looking at how we can address this with HRV biofeedback. But the benefits of HRV biofeedback are not reserved for elite athletes. Modern life is stressful for everyone, with many sources of hassle at work and home. Evidence indicates that adopting a regular, long-term schedule of breathing practice at around six breaths per minute for 10 minutes every day could help improve the body’s ability to manage stress. Simple breathing pacer apps on smartphones, or cheap heart rate monitors, can be used to practice becoming more aware of your breathing, and controlling your heart rate. In times of pressure and amid the stresses of modern life, anyone can breathe to …

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15 December 2019To Lose Weight, Eat Less or Exercise More?

Juan Ignacio Pérez Iglesias I tend to be overweight, and for the last few years my blood glucose levels have been putting me on the brink of Type 2 diabetes. I love my food, and it is often part of my social commitments. I’m a Spaniard, so there’s also the occasional tapas and glass of wine, or maybe a martini on Saturdays. As a physiologist, I know I need to take steps to control my blood glucose and weight. So early every morning, I spend a considerable amount of time pedaling away on a stationary bike. When I started this morning activity, I lost several pounds in the first two or three weeks. Then I increased my cycling time, from 40 to 60 minutes a day, and lost another few pounds. Now, however, I’ve been following this regimen for nearly two years, and my weight has obstinately refused to go down. No matter how much I exercise, it barely drops. I can’t spend any more time pedaling. The day isn’t long enough. Neither is the night. It is discouraging to get on a bike early in the morning, pedal away madly for over an hour and weigh the same as before. The only thing I manage to do during the work week is knock off the weight I put on over the weekend. The apparent lack of physiological logic in all this irks me. In my lectures at Spain’s University of the Basque Country, the syllabus covers energy balance — the difference between your energy input, or calories consumed, and your energy output, or calories burnt. I teach students that when activity increases, the metabolic rate rises. So if the energy absorbed in the form of food is constant, more metabolic activity should bring about a reduction in the energy available for growth, even to the point of negative growth – that is, weight loss. Right? Why isn’t exercise helping me lose weight? Science has struggled to provide a satisfying and consistent answer to this common frustration. According to anthropologist Herman Pontzer of Duke University, when physical activity is increased in the long term, daily energy expenditure also rises – but less than one would expect. Even as activity increases, the body’s total daily energy expenditure rises more and more slowly, until the number of calories burnt daily becomes virtually constant. In other words, the body adapts to changing circumstances. If expenditure is more or less constant, then, the body compensates for increased physical activity by reducing the energy it spends on other, nonessential functions. Pontzer’s hypothesis, which was developed working alongside a team of doctors, would explain why I tend to feel cold – even on very hot days – and why I feel colder on mornings when I’ve exercised intensively. What I make my body pay for in exercise, my metabolism “charges” me for by reducing heat generation. So while moderate physical activity leads to a reduction in nonessential physiological activities, the reduced functionality triggered by high levels of physical activity may actually be harmful to human health. Research shows that heavy physical activity can alter the ovarian cycle in women, diminish sperm production in men, lower levels of sexual hormones in the blood and reduce sex drive. Under conditions of very high activity, the effects on reproductive function become more obvious – consider the delayed onset of puberty in young gymnasts, for example. The immune system suffers, as does the body’s ability to repair damaged tissue. So while it is healthy for many reasons to regularly engage in moderate physical activity, that activity does not have the slimming effects often attributed to it. And increasing the amount you exercise won’t change that. How to lose weight You don’t want to hear this any more than I do, but controlling calorie intake – difficult as that is – is a more effective way to control body weight. The body adapts to a lack of food, as it does to increased physical activity. In this case, it saves energy by reducing the speed of various physical processes, including metabolic activity – but not enough to offset the reduction in calories. When you eat less, body temperature is also affected: Reducing food intake tends to make people feel colder. Eating less entails a slower physiological life and, to a certain extent, a more efficient one – that’s why, scientists are fairly confident, eating less is tied to longevity. It’s not my place to advise anyone on their habits. But here’s how I’ve chosen to change my behavior based on this information. First, I eat less than I used to and am more careful about what I eat. But I confess that I still overindulge occasionally. I’ve also moderated my physical activity. These days, I do about 100 miles a week on the stationary bike and walk whenever I get the chance. So far I have not found life unbearable. Type 2 diabetes is still hanging over my head like the sword of Damocles, but I’m confident I’m on the right …

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15 December 2019What the Trump administration gets right about hospital price transparency

Neeraj Sood New federal regulations finalized Nov. 15 require hospitals to make public all the prices they negotiate with insurers and health plans, starting in 2021. The aim is to untangle the hospital marketplace with a wave of consumer-friendly information that will promote competition that leads to lower costs. Hospitals are not happy, but advocates of well-informed, patient-centered health care should be cheering. I am a professor of health policy at the Price School and Schaeffer Center at USC and have published several papers and worked with startups that aim to improve price transparency and consumer decision-making. I’m among those cheering. Hospitals already post online their so-called standard or “chargemaster” rates for the thousands of codes used in their billing systems. Almost nobody actually pays these rates; they are intentionally inflated prices that give hospitals an edge in negotiating with insurers. Under the new regulations, hospitals, which account for about one-third of all health care costs, also have to divulge the actual rates paid by health plans and insurers for those same codes. To help consumers make apples-to-apples comparisons, hospitals will be required to go beyond the individual codes and post their negotiated rates for a list of 300 so-called “shoppable” services that consumers might examine before selecting a provider. This requires hospitals to link services that usually accompany each other, such as laboratory and pathology charges along with surgery. As for insurers, there is still a two-month public comment period before new regulations become final. As drafted now, the new law would force insurers to disclose negotiated rates, as well as rates paid for out-of-network treatments. They would also have to give cost information to consumers in advance. This is one of the moments when regulations free a marketplace rather than restraining it. I believe health care desperately needs the cleansing effects of transparency, which can help reduce spending without hurting quality or access to care. It can also help reestablish faith from consumers, who believe that they are getting ripped off by unknowable forces in an industry that has outsized effect on their lives and finances. A win for consumers, but fear from providers The new regulations from the Centers for Medicare and Medicaid Services will by no means be a cure-all. But they take several important steps toward rebuilding trust in the health care system. To those who are ready to give up on market forces in health care, the regulations may be seen as too little, too late. They argue that consumers in high-deductible health plans, who presumably have the greatest incentive to find lower cost services, rarely shop around. That is true, but that is largely because consumers don’t have the information they need. These regulations will help consumers do what they already want to do. In fact, the advent of high-deductible plans under the guise of giving consumers “skin in the game” has been something of a cruel trick. They have been hit with higher out-of-pocket costs but haven’t been told how they can reduce them. Hospitals and insurers see danger in the regulations. The industry business model is built around confidential rate negotiations. Hospitals fear that revealing their lowest prices will mean having to give those prices to all payers. Insurers fear they will lose the ability to win deeper cuts than their competitors. Hospital groups are planning to go to court to block the regulations, arguing that prices stemming from closed-door negotiations are trade secrets, and that CMS lacks the authority to mandate their disclosure. No doubt transparency will be disruptive, but I believe it is a risk worth taking. Making prices more transparent saves money. The regulations will spur greater price competition and reduced prices will benefit all consumers, not just those who will shop around. We saw this when hospitals began reporting quality measures. Quality jumped despite consumers not using the information directly in making decisions. No hospital wants to be known as the lowest quality or highest priced facility. And public reporting of prices will be invaluable to researchers and policymakers on the lookout for unfair business practices. Transparency is crucial to society beyond its effect on prices. Consumers and voters know something is seriously wrong with health care prices; they just don’t know what they can do about them. In the absence of real, actionable information about prices, patients will continue to conclude that they are pawns in a system built to obfuscate who is profiting from their health care dollars. As long as that condition persists, health care will drive cynicism at large. Without transparency, providers and insurers lack proof that they are putting patients first, and that is a dangerous position …

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16 November 2019Some people benefit from being naturally mentally tough, but it can be taught to those who aren’t

Peter Clough The saying that “whatever doesn’t kill you makes you stronger” is simplistic, disingenuous, and potentially destructive. While it’s true that some who experience horrible events are stronger for surviving them, this is probably only true if they were strong to begin with. In the face of horrible events, others are more likely to be traumatised and suffer for years or decades after. Surviving repeated unpleasant experiences can lead people to develop a survivor mentality, a type of resilience which is a narrow means to an end, but does not help the development of a rounded, positive mental and emotional life. In a recent BBC interview, the writer and poet Lemn Sissa explained that while his childhood experience made him stronger, he wouldn’t wish that type of resilience on his worst enemy. The idea of mental or emotional resilience is well-established, having been first studied in the 1960s. But today the concept appears to have become a catch-all term for any issues relating to stress and anxiety. In reality, it is a rather passive concept, drawing parallels from the resilient engineering that can survive severe storms. It’s about “hanging on in there”. On the other hand, the concept of mental toughness provides a single umbrella term which, while encompassing many of the key ideas relating to resilience, offers a more positive and targeted way of helping people deal with stressful situations. The key difference is a focus not on simply battening down the hatches in the face of emotional storms, but of feeling capable of seeking out demanding environments and prospering in them. Mental toughness in this sense is a positive psychological variable related to success, with psychologically beneficial properties that extend beyond accepting and dealing with anxiety, to finding opportunities for self-development and growth. The “4Cs model” of mental toughness was developed by my colleagues and I, and is the most widely used model for defining and measuring mental toughness. It comprises four components: confidence, control, commitment and challenge. Survive and thrive Unlike resilience and some other models of toughness, the opposite of toughness in the 4Cs model is not weakness, but sensitivity. Sensitive individuals find stresses difficult to handle, but they have a unique and interesting view of the world which adds to the diversity of debate and discussion. Whereas mentally tough individuals might see the world in high definition detail, sensitive people are more likely to view it as an impressionistic abstract. Both are valid and should be encouraged and cherished. However, mentally tough individuals tend to prosper in stressful situations and so are far more likely to be in senior positions, and so set the agenda. This progression to the top often starts at school. There is clear evidence that mentally tougher pupils do better at exams and in the many other transitions that dominate many educational systems. It would be hugely beneficial if schools could provide better support to more sensitive pupils, but in these resource-diminished times this is unlikely. The evidence suggests that within a population of young people the tough get tougher and the sensitive get more sensitive as they move through life. Mental toughness can be taught Researchers including myself have argued that mental toughness overlaps conceptually with other attributes identified as being important to teach in education. For example, resilience, buoyancy, perseverance, self-efficacy, confidence, and motivation. Teachers typically have a considerable interest in fostering these positive psychological attributes, to ensure their students are successful learners and confident individuals, who achieve academically and contribute positively to society. With AQR International, I have been working with a number of schools in the north of England to help enhance pupil’s mental toughness. The aim is to improve exam performance, ease transition anxiety and, perhaps most importantly, to enhance well-being. While twin studies have suggested there is a genetic aspect to mental toughness, it is still possible to teach and develop mental toughness skills. This uses a toolkit of psychological skills training techniques, including relaxation, positive thinking, goal setting and, importantly, an accurate assessment of mental toughness with feedback. One example is Tougher Minds, a project run by the Salford Foundation and funded by the Salford NHS Clinical Commissioning Group, aimed at developing non-cognitive skills – specifically mental toughness – in three primary schools in Salford, Greater Manchester. Focusing on pupils aged nine to ten, Tougher Minds uses activities such as teaching pupils how to make positive affirmations, identifying heroes and heroines, and effective goal settings, either as the whole class, in small groups or individually. The results showed statistically significant positive changes in mental toughness, challenge, confidence, emotional control and life control scores. Many recent studies have reported a link between toughness and psychological health. It’s vital that people are not simply thrown into the deep end to see if they sink or swim. Specific and tailored interventions are the key. Researchers have noted that talk of mental toughness is part of young people’s daily speech, and as it feels less academic than some other terms, this may make it more appealing to children and adolescents – particularly those who may be difficult to reach or who need it most. …

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16 November 2019Most People Don’t Wash Their Hands Properly – Here Is How It Should Be Done

Ellen W. Evans It’s something most people do everyday, often without really thinking about it, but how you wash your hands can make a real difference to your health and the wellbeing of those around you. Washing your hands is the one most effective method to prevent cross-contamination which can cause the spread of illness and infections. And many research studies have shown how improvements in hand hygiene have resulted in reductions in illness. A look at research from around the world on the promotion of washing hands with soap, found that such interventions resulted in a 30% reduction in diarrhoea episodes and respiratory illnesses such as colds. Hand hygiene interventions at elementary schools in the U.S. similarly helped to reduce sick days associated with acute gastrointestinal illness by 31%. The impact of good hand hygiene is even greater among people that have an increased risk of infection. A study from 2007, for example, found that patients with AIDS who washed their hands more frequently got ill less often. But as our recent research shows, despite awareness of the importance of washing your hands, people often fail to do it properly. In our study, we observed how adults over the age of 60 prepared food in a domestic kitchen set up with CCTV cameras, and found that only 30% of people properly washed and dried their hands before preparing food. We found that 90% of people failed to wash and dry their hands properly immediately after handling raw chicken. And that 62% failed to rub hands, palms and between fingers when washing hands. We also discovered that 47% of people in our study failed to use soap during one or more hand washing attempt. We also swabbed the kitchen and found that those who adequately washed their hands, had significantly lower levels of microbiological contamination levels in the kitchen following food preparation sessions. Other studies have also determined that failing to wash hands adequately after handling raw poultry can transfer bacteria to domestic kitchen surfaces – such as the handles of taps and refrigerators. All of which highlights the importance of properly washing your hands. How to wash your hands The World Health Organisation recommends that to wash your hands effectively, it needs to be done with clean water and soap. Hands should be rubbed together for at least 20 seconds, followed by rinsing. Hands must also be dried using either disposable kitchen paper or a clean hand towel. The use of soap is particularly important for hand washing to be effective. Indeed, research has shown that washing with soap significantly reduced the presence of bacteria on hands. The soap doesn’t have to be antibacterial to be effective – though antibacterial soap works on reducing the number of bacteria not just removing them. And research has shown that the use of non-antibacterial soap is successful for preventing both gastrointestinal and respiratory illnesses. You should spend 20 seconds washing and drying your hands. Here’s how to do it properly: wet your hands with clean water, use soap, rub palm to palm, rub back of hands, rub between fingers, rub fingernails, rinse your hands. Then dry them using a clean towel or kitchen paper. Dry them properly too Hand drying is also very important to prevent contamination from hands to food, surfaces and equipment as the transmission of bacteria is more likely to occur from wet skin than from dry skin. So the proper drying of hands after washing should be an integral part of hand hygiene. Drying your hands properly also removes a significant number of bacteria following hand washing – drying with a towel removes pathogens by means of friction, on top of the removal of moisture. Though this means that a hand towel can become a site for cross-contamination. Indeed, in our study we found that 37% of people used the same towel for drying hands and equipment. It is essential to wash hands on occasions when they may be contaminated such as before, during, and after preparing food – particularly after handing raw meat and poultry – after using the toilet, after blowing your nose, coughing, or sneezing and after touching an animal. This is important, because washing our hands properly can mean the difference between sickness and health. And for people with compromised immune systems it can even mean the difference between life and death – so make sure you do it properly. If in doubt follow the tips above and sing “Happy Birthday” twice to allow enough time to remove and rinse away any …

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16 November 2019Mental Health in the Workplace Across the Generations

Camilla Lewis Latest figures from the Office for National Statistics show that a record 32.54 million people are in work in the UK¹; a statistic that looks fantastic on the surface and one that many will celebrate, particularly from a political standpoint. However, mental health issues in the workplace and presenteeism because of mental health is also at an all-time high, with 22% of employees going into work in 2018 despite feeling mentally un-well – up from 18% in 2016². It is possible that there is a correlation between an increasing workforce and an increase in workplace mental health issues; but there are numerous confounding influencing variables which pose a challenge for companies. The modern workplace: demographic challenges One major challenge businesses face with an increasingly large workforce is the widening of the age demographic and differing attitudes towards mental health. For the first time in history, we are seeing five generations of employees in the workforce which are socially segmented into different groups³: Individuals born after 1997, socially referred to as ‘Generation Z’, are now entering the workforce and people from previous generations are working past retirement or even re-entering the workforce after a few years after retiring. As a result, employers are facing an enormous variance in attitudes towards work and mental health as a wider age demographic go to work. Those born between 1981 – 1996 or ‘Millennials’ make up 35% of the UK workforce4, which by 2020 will rise to an astonishing 50% of the workforce worldwide5. The media portrays an image that Generation Z and Millennials are the ‘entitled generation’, highly ‘confident’ and are thought to strive for flexibility in the workplace rather than a higher salary. Despite being driven and aiming for success, anxiety and depression are widespread amongst this age demographic. Finances are a key influencing factor; millennials as a generation are struggling and are generally stuck in ‘rent traps’. Unaffordable property prices place them under enormous financial pressure, whilst they find themselves competing against the impossibly shiny social media personas of their peer groups.6. A study conducted in 2015 by American University found that Millennials are more accepting of others with mental illness, as they grew up hearing about depression, anxiety, suicide and eating disorders7. So, whilst mental health issues amongst Millennials are increasing, they are also more willing to speak about their struggles than previous generations. The positive side of social media means that there is an easy-to-access platform to speak out about discrimination and stigma in the workplace. Meanwhile, on the other side of the age demographic are the ‘baby boomers’, people born between the years 1946 - 1964 who may have neglected their mental health due to the negative association with the term for most of their working lives; research suggests that only one in five workers of this age group feel that it’s appropriate to discuss mental health8. According to an intergenerational study by Bupa, workers aged 55+ are most likely to avoid seeking help for symptoms associated with mental ill health9. Thirty-two percent of working baby boomers felt they could identify symptoms of depression and 27% for anxiety. In contrast, 56% of Gen Z workers felt confident that they could identify anxiety and 49% were aware of depression. Interestingly, from the same study two thirds of Baby Boomer employees stated that they were suffering from anxiousness, insomnia, feelings of hopelessness and continuous low mood. However, they were not able to identify these symptoms to a corresponding mental illness. This is in line with research by Ashlyn M. Avera (2017)10 who explored the differences in mental health education across Baby Boomers, Generation X and Millennials. A significant correlation between each year of life gained and a decreased ability in identifying mental health symptoms and correctly matching these to their linked illness was found; suggesting that ‘Baby Boomers’ have a lack of awareness of mental health symptoms and their associated conditions. What about the middle generation that is currently making up most of the workforce and 51% of leadership roles11? Generation X are traditionally thought of as the forgotten generation, as most of the focus has been on the retiring baby boomers and the media focuses heavily on millennials. Generation X are typically expected to take on a heavier workload and are more likely to be overlooked for a promotion. They are also sandwiched between two generations and often must take on a caregiving role for both ageing parents and their own children12. This understandably has a negative effect on mental health, and therefore this generation are at high risk of anxiety related disorders, depression and even substance misuse.13 What can employers do? Although there are significant differences in attitudes towards mental health across the various generations, there are several measures that companies can put in place which can benefit the entire workforce from a mental health perspective. Organisations need to create a culture which supports staff to understand the symptoms of mental health and allow adjustments specific to an individual’s needs. Employers who have an organisation culture of openness, awareness and acceptance are more likely to be aware of the importance of supporting mental health and wellbeing. This can be achieved by having mandatory training on wellbeing and activities to support employee resilience. Research shows that early stage supporting activities can increase Return on Investment (ROI) by 8:114. An employer can also support individuals suffering from mental health symptoms through diagnostic/screening tools or provide training to employees to spot the signs in themselves or others. This support could take the form of training, use of employee assistance programmes or discussions around workload or styles. Research suggests that ROI can increase by 6:1 using these proactive interventions. It's important that workplaces promote mental health and encourage selfcare to allow all generations to be successful in their careers. Being a company that supports mental health for their employees not only helps individuals reach their full potential, it also helps to attract and retain top talent from a pool of hardworking and dedicated individuals. This is particularly important when attracting the younger generations and encouraging future leaders to flourish. References https://www.bbc.com/news/business-46958560 https://www.personneltoday.com/hr/world-mental-health-day-presenteeism-on-the-rise/ https://www.unretireyourself.com/resources/five-generations-workforce/ https://www.peoplehr.com/blog/2016/05/13/millennials-continue-to-rise-up-the-ranks/ https://www.pwc.com/gx/en/services/people-organisation/publications/workforce-of-the-future.html https://www.nami.org/Blogs/NAMI-Blog/February-2019/Millennial-Mental-Health-in-the-Workplace http://www.themillennialminds.com/survey/ https://hrmagazine.co.uk/article-details/baby-boomers-bottling-up-mental-health-issues https://www.hrreview.co.uk/hr-news/older-employees-brushing-off-mental-health-issues/115894 https://digitalcommons.georgiasouthern.edu/cgi/viewcontent.cgi?article=1346&context=honors-theses https://www.cnbc.com/2018/04/11/generation-x--not-millennials--is-changing-the-nature-of-work.html https://www.workhealthlife.com/Article/Pdf/12553e47-32c3-42c1-9dd4-601a746282ed https://www.bbc.com/news/health-49329595 …

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16 November 2019How to Stay Fit into Your 60s and Beyond

Julie Broderick Ageing is inevitable and is influenced by many things – but keeping active can slow ageing and increase life expectancy. Evidence shows that ageing alone is not a cause of major problems until you are in your mid-90s. And strength, power and muscle mass can be increased, even at this advanced age. So here are my top exercise tips for people in their 60s and older, at different levels of fitness. For lifetime fitness fanatics If you fall into this group, you are in the minority. You are robust, likely to be a “super-ager” and you are doing wonderfully. You are certainly optimising your chance of living longer and ageing successfully. Generally, this is when you reap your reward from a lifetime of keeping active. With your healthier metabolic, skeletal, cardiovascular and immune systems you can probably outperform people decades younger. Keep up the kettlebells, spin classes, rowing, triathlons or manual work such as gardening – whatever you like to do. You can keep challenging yourself physically. Mix your routine up – a combination of aerobic and resistance work as well as an activity to challenge your balance is ideal. Maximise health benefits by swimming outdoors and as part of a community. You might want to try sea swimming – although it’s not for everybody. But watch out for chronic overloading, that is, diversify your exercise programme by incorporating cross-training. For example, if you are a runner, incorporate cycling or swimming to avoid overloading any part of your body. Recovery after strenuous exercise is slower as you age and can take up to five days. So exercise smart. For the averagely fit You are doing well, so keep going. Long-term consistency is the key for benefits. You don’t necessarily have to join a gym, just keep building meaningful physical activity into your day. For example, walk briskly to the shops to get your groceries, keep up gardening and be active around your house. Even repeating simple stair climbing is a great exercise. If you are suffering from hip or knee pain, walking may be painful, so try cycling or water-based exercise instead. Coupling physical activity with social engagement can optimise its benefits, so try yoga or a dance class. Incorporate some outdoor exercise for an added mental health boost. The main thing is to avoid long periods of sitting. Also, ideally, continue to do the exercise you enjoy. Try to steadily build up your level of aerobic exercise at a level where you build up a sweat and feel slightly out of breath. Often strengthening and flexibility exercises are neglected, so try to include these type of exercises where possible. For the unfit or unwell You may be managing complex chronic conditions, which make it more difficult to exercise. Or it may be that exercise is not a habit for you. If you have several chronic conditions, you may need clearance from a doctor to exercise and specialised exercise advice from a physiotherapist or other exercise professional. If you are experiencing three or more of the following: unplanned weight loss, exhaustion, slowness, weakness of grip and physical inactivity you may be considered frail, which will leave you vulnerable to even minor health stresses. But it is never too late to build more physical activity into your daily life. Even reducing time spent sitting and doing a little exercise will have major health benefits, doing any type of activity at all is better than none. Even chair-based exercises or practising sit-to-stand can be a great start. Feeling a bit out of breath with exercise is normal and some initial aches and joint pain are fine. But if you ever feel chest pain or severe discomfort, you need to see a doctor straight away. If you have a set-back such as a chest infection or fall which results in a hospital admission, get up and moving as soon as is safely possible. Even a few days of bed rest can result in major decreases in strength and fitness. If you have surgery scheduled, being as active as possible before being admitted to hospital and start moving as soon as possible afterwards will help your recovery. It may also prevent complications that could prolong your hospital stay. If you are diagnosed with cancer, keep active, even during treatment, such as chemotherapy and radiotherapy, and during recovery. If you have other common chronic conditions, such as heart or lung disease, keep as active as your condition allows. Just remember, whatever your state of health, it’s never too late to reap the benefits of being more physically …

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16 November 2019Four ways You and Your Company Can Make Flexible Work Better

Jane Parry The world of work is fast changing. As life expectancy lengthens and labour markets shift, our working lives have become more complicated. The old expectations about how we work have become unsustainable – not least the expectation that we religiously travel to and from a fixed location ten times a week during rush hour, with all the knock-on effects that this has for carbon emissions. Flexible work has the potential to solve many issues that see people fall out of the workforce. For employees, this means being better able to fit their jobs around other responsibilities, such as looking after children or elderly relatives. For businesses, this means retaining staff and saving the tens of thousands of pounds it costs to replace them. Yet many remain stuck in positions with rigid working hours. One of the sticking points for employers seems to be that flexible work is equated with the one or two formats that they are familiar with – most often, letting staff work from home or work part-time. So a whole battery of ways in which flexible work could be used to align with the needs of a diverse workforce gets overlooked. Recent research mapping the various combinations of flexible work found over 300 possible ways in which jobs could be organised flexibly. This includes job shares, compressed hours, term-time working, flexi-hours and tapered working. There is considerable scope to draw upon this host of working practices. Here are four ways that businesses can get flexible working to work for them and their staff. 1. Get line managers on board First and foremost, managers need training in how to manage flexible work. My own research found that line managers are the single biggest block on flexible work uptake. And even where flexible work is supported, too often it is assumed that managers know the unknowable and can just run with new working practices. But without any investment being made in managers, flexible working arrangements are set up to fail. Alternatively, the buck gets passed onto the flexible worker to make a success of a new arrangement, giving him or her one more task for their workload, and one with a high penalty attached to failure – a stressful experience in itself. Realistically, achieving this buy-in will also need some nudging, particularly for smaller businesses and sectors where there has been less flexible work. Giving managers access to success stories and practical guidance, backed up by lots of leadership and peer support, is vital. 2. Be flexible about flexibility Managers and employees need to come together in a safe space to assemble flexible working arrangements that work for everyone, with a real understanding of what is at stake and what is possible. A part of this is the need to get flexible about flexibility – recognising that circumstances change and that work arrangements may need to be tweaked or even reversed over time to ensure that they remain fit for purpose. Flexible work has been used as a management tool to achieve savings by imposing remote or zero-hours contracts on workforces, with little input from those called on to do their jobs differently. So it’s necessary to give people space to make suggestions and give feedback about flexible work. And it is also about making use of a range of flexible working arrangements. 3. Redefine productivity Flexible work demands a shift away from seeing productivity in terms of being present for fixed working hours. Indeed, the problem of presenteeism – where people feel compelled to show their face at work even if they are ill – only feeds into the UK’s productivity puzzle. Companies (and managers) need to devise better measures of output: has a project been completed within schedule, did the team work well together, is the report of a high quality? These are much more effective yardsticks of success than whether staff clock in at 9 o'clock each morning. 4. Advertise your flexibility Making flexible work available at the point of hire will widen the talent pools available to employers, as people who already work flexibly will be more likely to apply for positions where they won’t lose a valued part of their contract. The demand for such a move is significant – flexible working consultancy Timewise’s latest Flexible Job Index found that 87% of employees either work flexibly or want to But in 2019, only 15% of UK jobs were advertised as flexible. Employers who ignore this demand will be poorly prepared in the war for talent. The evidence base for the benefits of well-managed flexible working arrangements is getting more and more compelling. It offers increased retention and productivity, and drops in absenteeism. And it’s not only employers who stand to make business gains from getting good at managing flexible work, employees with a good work-life balance are more motivated and content. Plus, as the latest pay gender pay gap figures show that older workers are seeing the greatest disparities, flexible work is a key tool in creating more age-friendly and equitable workplaces. On a societal level, by organising work more thoughtfully we can make inroads into tackling carbon emissions as our car use becomes more efficient. We could see reduced demands on health and social care systems as workforce stress levels fall, and balancing care and work demands become more manageable. But we will only achieve this through good management, a fresh approach to job design, and enthusiasm from all …

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16 November 2019Why We Need A Better Understanding of How PTSD Affects Families

Hope Christie What’s the first thing that comes to mind when you hear the term “post-traumatic stress disorder”? When I ask this question in public presentations, the answers are along the lines of “the military”, “soldiers” and “war”. Then, when my next slide displays military themed images, it seems as if I have ingeniously predicted the audience’s response. That fact that people typically associate post-traumatic stress disorder (PTSD) with war presents a significant problem. Because, while public awareness around PTSD and trauma exposure is increasing, the information people have may be inaccurate or incomplete. And this risks the disorder, and those who are living with it, being misrepresented and misunderstood. As the full description spells out, PTSD is a psychological disorder that may develop following exposure to a traumatic event. This exposure is more common than people might think, with recent research suggesting that around 90% of us will experience at least one traumatic event in our lifetime. Clinically speaking, these events are defined as any event in which someone is exposed to actual or threatened death or serious injury. This could include a serious accident, or experiences of violence or abuse. But not everyone who experiences trauma will go on to develop PTSD. While it is typical that most will experience some symptoms, it is thought around 8% of people will be diagnosed with PTSD after a traumatic event. Symptoms include nightmares or flashbacks, feeling constantly on edge, deliberately avoiding reminders of the trauma and experiencing intrusive memories. There may be a change in mood, sleep difficulties, anger and feelings of being unsafe. In the first few weeks after a traumatic experience, these symptoms are quite common, and often form part of a normal recovery. But if they persist or interfere with daily functioning, psychological intervention may be required. Family impact My recent research found that PTSD can have several negative effects on parents, such as an increase in shouting or hitting children. And my in-depth discussions with parents revealed how they feel their behaviour has changed. Some spoke about feeling angrier or having a shorter temper. Others mentioned finding noisy play distressing, causing them to yell at their children or even leave the room. There was also a sense that their PTSD prevented them from doing certain family activities, such as going to shopping centres or visiting the cinema. This made them feel like they were letting their children down because they couldn’t do what “normal parents” do. But underneath these negative experiences, the underlying message from these discussions was clear. PTSD does not impair a parent’s love for their children or stop them from wanting what is best for them. Removing themselves from a noisy room was not a sign of being unwilling to bond, but an effort to preserve their child’s playtime without being yelled at. Being unable to do certain activities led to more creative thought around how best to spend time with their child. So instead of going to the cinema, they might rent a film at home and hold a “movie night” with duvets and popcorn. But as an outcome of their PTSD, parents tended to find it difficult to see the positive sides to their parenting. That said, research has found that children are often a source of resilience and a motivation to actively engage in treatment – which highlights why receiving effective formal treatment for PTSD is so important. Effective treatment PTSD often exists alongside other mental health difficulties, such as anxiety and depression. So patients may often be prescribed some form of medication, such as antidepressants, to help them cope. Although this may help the person in the short-term, evidence suggests that there is no solid benefit of drugs to help treat PTSD. Instead, receiving some trauma-focused therapy is recommended to address the root issue. Getting this kind of treatment is important because PTSD affects so many people – particularly spouses, partners and children. More informally, social support can also play a substantial role in the recovery process for someone with PTSD. This could include not being dismissive of trauma symptoms or experiences that did not originate in a war zone. So while we should not detract from the experiences of those in the military, we should be informing people that PTSD is more common than one might think. That way we can aim to help anyone and everyone who may be living with the …

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15 November 2019Issue 043,
November 2019

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28 October 2019Issue 042,
October 2019

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16 October 2019Processing Changes the Food we Eat – Here’s What That Means for our Bodies

Anthony Fardet and Edmond Rock To understand how healthy a food is, we generally look at its components – carbohydrates, fats and proteins, or the vitamins, minerals and other substances it may contain. But this purely “nutritional” vision overlooks one property that’s a key part of a food’s health potential – its structure. For example, serving a child a breakfast cereal made up of whole wheat or rice may seem like a good idea, but research shows that processing can significantly impact its nutritive qualities. Extrusion-cooking or puffing can transform wheat and rice into primarily a source of sugars that the child’s body rapidly absorbs, and many of the nutritive values of the original grains are lost. The “matrix” of a food Too long ignored by nutritionists, the concept of a food’s structural matrix is crucial to correctly assess its health potential, especially at a time when ultra-processed products have flooded supermarket shelves. The term matrix (from the Latin “mater” meaning mother) refers to an element that “provides support or structure, and serves to surround, reproduce or construct”. In the case of food, it is a kind of three-dimensional structure. Within this matrix, the elements that compose a food interact with each other, conferring particular properties. Take an almond: it is hard, brown and fibrous. If an almond is ground, its matrix changes: it’s now in the form of powder. But if the composition of ground almonds is theoretically identical to that of whole ones, their effects in the body are not the same. In particular, the nutrients are digested differently, altering the body’s physiological and metabolic responses. The matrix effect of food implies that “two foods of identical composition but with different structures do not have the same effects on health”. Put differently, for the body, a calorie of food A is not the same as a calorie of food B. What is crucial is the matrix environment of the calorie, the structure within which it is contained. In short, all calories are not interchangeable. The parts and the whole The “matrix” effect is not just about whole foods, but also about food ingredients, and even the nutrients themselves. Take food carbohydrates (also known as starches): if you hydrolyse them to create a glucose syrup and then a glucose-fructose syrup, the composition – or at least the calorie content – remains the same. Fructose has the same composition as glucose, but a different structure. However, the effects on the human body are no longer the same, because the glycemic indexes – the intensity with which a food boosts blood-sugar levels – differ. Moreover, despite a low glycemic index, excessive consumption of fructose has been associated with fatty liver disease or non-alcoholic fatty liver disease. Consequently, understanding the “matrix” effect of foods, ingredients and nutrients is essential to correctly assessing their effects on human health. Three physiological effects Because of the range of impacts they can have, the matrix of foods play a fundamental role in our diet: Our sense of satiety. The form of a food – hard, soft, friable, liquid and more – affects how much we must chew, and the more we do, the higher our sense of satisfaction and fullness. The rate of release of nutriments in the digestive tract, and therefore their availability and subsequent use by the body. How quickly food moves through the digestive tract. If we again take the example of almonds, whole ones have a solid matrix and must be chewed, making them more satisfying. Compared to ground almonds, solid ones also release less fat in the blood and do so more slowly. All three effects are essential mechanisms for long-term health. Similar differences exist for whole apples (solid matrix), apple sauces (semi-solid matrix) and apple juice (liquid matrix), and this holds true for all foods. Consequently, we should always favour a food in its solid form if it is regularly consumed. From processing to ultra-processing Modification of a food’s matrix is sometimes desirable because it makes it more digestible. However, transformations that completely disrupt its matrix to isolate its ingredients and then recombine them in artificial matrices can pose health problems. One of the main characteristics of many ultra-processed foods is not only the loss of the “matrix” effect by cracking/fractionation, but also by extraction, purification, hydrolysis or chemical modifications. Such foods are both “hyper-palatable” (which leads to overconsumption), yet they’re crumbly, soft, viscous or liquid and are thus little chewed (and therefore don’t satiate us). These two qualities are the essence of “junk food”, addictive yet empty of almost everything but calories. The example of dietary fibre is also interesting. Industrial food companies often add fibre to products that have been over-refined. However, fibres naturally present in food matrices are associated with phytonutrients, including antioxidants. By passing through the blood, these molecules potentially protect against the oxidation of low-density lipoprotein (LDL). Known as “bad cholesterol”, these oxidized LDLs can form atheromatous plaques in blood vessels, a cardiovascular risk factor. The antioxidants associated with the natural food fibres also help fight free radicals produced by colonic bacteria. With added dietary fibre, however, these positive effects are lost. Public health recommendations The explosion of chronic disease in the world may be due more to the loss of the “matrix” effect of food than to its composition. Indeed, research indicates that the degradation or artificial modification of a food’s original matrix is one of the key drivers of excess calorie intake. The overconsumption of saturated fats, salt, sugars and additives is simply a symptom of this modification. Based on the scientific evidence, it is essential that nutritional recommendations begin to take into account the “matrix” effect of foods. For researchers, this opens up a whole range of scientific exploration in the field of processes and formulations. For us as consumers, solutions are often within arm’s reach: when given the choice between whole, complex natural foods and ultra-processed products derived from them, go for the ones that are closest to their natural …

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16 October 2019There is no great salt debate: we should be consuming less

Feng He The human body needs a tiny amount of sodium to function properly and this is typically found in salt (sodium chloride). But today most people consume way too much salt, increasing the burden of cardiovascular disease around the world. Health professionals have been trying to tackle this problem for decades, but face several barriers, including research that muddies the water about what safe levels of salt intake are. This has cast unnecessary doubt on the importance of reducing intakes. But our latest research has found flaws in these studies and suggests that salt intake should be reduced even further than current recommendations. The World Health Organisation (WHO) recommends that people consume less than 5g of salt a day, but global intakes average 10g a day. Excess salt consumption raises blood pressure, which increases the risk of heart attacks, heart failure and stroke. Many studies show a linear relationship between salt intake and cardiovascular disease: as salt intake increases, the risk of cardiovascular disease and premature death increases. But other studies suggest that the relationship between salt consumption and disease is not linear. They posit that consuming both less than 7.5g and more than 12.5g of salt per day could lead to an increased risk of cardiovascular disease and early death. But there are flaws in the methods used in these studies. Cheaper but less accurate We excrete most of the salt we consume in our urine (90%). And there is a large variation in the amount of salt we consume each day, so the gold standard for measuring salt intakes is to collect urine over at least three non-consecutive 24-hour periods. Although this is the most accurate way of measuring salt intake, it is also the most expensive and is more work for both the participant and the researcher. Some studies have estimated salt intake using spot urine measurements rather than 24-hour urine collection because it is easier to do, cheaper and less hassle for the participants. Participants only have to provide one small urine sample from which daily salt intake is then calculated. The studies that suggest that the relationship between salt intake and cardiovascular disease is not linear, used data from spot urine measurements. This way of measuring, however, is not accurate as it represents salt intake from a very short period of time and is also affected by the amount of fluid the participant drank and the time of day the sample was taken. Estimates from spot urine measurements are therefore unreliable reflections of habitual daily salt intake. We found that calculating salt intakes from spot urine samples can alter the linear relationship seen between salt intake and mortality. We analysed data from Trials of Hypertension Prevention, which used the gold standard method for assessing salt intake (several 24-hour urine measurements) in nearly 3,000 adults with prehypertension (high normal blood pressure) over periods ranging from 18 months to four years. When we analysed the data, we found a direct linear relationship between salt intake and the risk of death down to a salt intake level of 3g a day. To mimic spot urine sampling, we then applied the formulas developed for these samples on the sodium concentration of the 24-hour urine samples. The results showed the same non-linear relationship that were reported in the controversial studies. This implies that their findings could be explained by the method they used to estimate salt intake, as spot urine measurements are unreliable reflections of habitual daily salt intake and it also appears that the formulas themselves are problematic. So the message remains clear: salt reduction saves lives, and the findings from studies that use a less reliable assessment of salt intake should not be used to derail critical public health policy or divert action. A gradual reduction in salt intake across the whole population, as recommended by WHO, remains an achievable, affordable, effective and important strategy to prevent cardiovascular diseases and premature death worldwide. Even a small reduction in salt intake will have an enormous benefit on people’s …

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16 October 2019How Companies Are Personalising Health

Matthew Lawrence It isn’t surprising that employers are looking for ways to improve the health and engagement of their employees when their challenges are so evident: Medical inflation rates continue to be high globally, with the 2019 global average being 7.8%, reported by Aon¹. Indeed, in many countries, this is much higher, even exceeding the local inflation rate by double-digit percentage points. Nearly 70% of all deaths worldwide are related to non-communicable diseases (NCDs) such as cancer, stroke, heart disease, diabetes and chronic lung disease, according to the World Health Organisation². Depression and anxiety cost the global economy US$1 trillion per year in lost productivity, according to medical condition-specific data by the World Health Organisation³. On top of this, the decreasing health of populations is having a big impact: not just on individuals’ quality of life but on health premiums and overall productivity. Mix all of these with factors such as ageing populations, multigenerational workforces and employees increasingly working into their later years due to lack of retirement savings, and we see that wellbeing, improving behavioural health and preventing disease has become an issue not only for governments and other health bodies, but also for employers. Indeed, outcomes of poor employee wellbeing manifests in a number of different ways, such as increased absenteeism and presenteeism, reduced productivity, increasing claims costs, poor financial wellbeing and general disengagement. Some employers recognise that employees spend a significant amount of time at work; so are well placed to support employees to be their best self, which in turn has a knock-on benefit for them. However, there is also evidence to suggest that many employers can do more than they currently are. In an Aon survey, it was found that 95% of employers see a correlation between employee health and performance and believe they have a role in trying to educate and improve poor lifestyle behaviours, yet less than half are implementing a defined health strategy4 Such support can now go beyond the traditional wellbeing models due to advances in technology. What actions can employers take? For employers committed to positively influencing employee wellbeing and promoting behaviour change, they should start with a review of their own values and ensure that their culture is truly in line with the objectives they set out. It is critical to understand what employers are really trying to achieve in this space, as some may be looking to just check a box, while others will be genuinely committed to understanding and improving their workers’ health. Stephanie Pronk, senior vice president and leader of U.S. Health Transformation Team at Aon, explains, “There isn’t a one-size-fits-all approach to health and wellbeing. Both an individual and an employer should look across a variety of issues – emotional, financial, physical and social – to create holistic approaches to improve one’s overall wellbeing.” And as wellbeing programmes continue to grow in popularity, what carries even more potential, she notes, is technology’s ability to bring these elements of health together to provide a more complete profile of an individual’s wellbeing. The global health crisis could be helped with technology – specifically, with mobile health (mHealth) solutions, which cover everything from fitness trackers to biometric sensors. The market has developed significantly over the past few years and is expected to grow even further, to be worth more than $150 billion by 2025. Technology can not only play a significant role in improving health outcomes, at the same time, the information generated from these personal devices also carries another benefit: line of sight into health-related data for both an individual and their organisation. This is especially the case when you consider that many medical conditions that increase costs – cardiovascular disease, cancer, high blood pressure and diabetes – are often manageable through changes in personal health behaviour. Applying Technology To Health And Wellbeing While wellbeing programmes once focused solely on physical health, there is now an awareness that broader issues such as mental illness, financial stress and poor social wellbeing also play a part in a person’s health. There’s also recognition that each individual’s needs are unique, so wellbeing programmes must be shaped accordingly. Thinking more inclusively about health could play a significant part in delivering more personalised health care and bettering the outcomes – and using mHealth technology could be the start. Here are some examples of mHealth tech: Personalising Health: Wearable Devices And mHealth Apps - Wearable devices and health apps will give people greater insight into their health and the tangible improvements that changes in behaviour can have on their wellbeing. Meanwhile, data collected through these devices and apps can allow health care professionals to track individuals’ and their progress toward becoming healthier. Improving Health Outcomes: Smart Reminders And Digital Pillboxes - Digital platforms can provide employees with health reminders and wellness tips or track outbreaks of diseases, such as colds or flus. Digital pillboxes can help patients track medications, ensure they’re taken as prescribed and transmit that data to caregivers. Increasing Access: Telehealth - The use of digital communications to acquire health services remotely will allow individuals to better access and manage their care. Decision-Making Through Data: Predictive Analytics - Analysing an individual’s health data can help determine which patients are most at risk of chronic conditions and which could benefit from enhanced treatments. This can then be used to shape personalised wellbeing programmes and help improve individuals’ satisfaction with the guidance they’re getting. Using mHealth to engage and promote better wellbeing The popularity of mobile platforms continues to facilitate the rapid expansion of the mHealth market, paving the way for major transformations in how consumers (employees) interact with the entire healthcare system. The breadth of what mHealth covers can be grouped into a few different categories, including disease management, cost and claims management and telemedicine. However, mHealth does not have to be complicated to be effective. From a preventative and lifestyle perspective, simple mobile apps or devices can be an effective way of engaging employees about their health, starting the journey of helping them measure key health metrics, and triggering behaviour change whilst introducing an element of gamification and social connection. What is the role of the employee? The challenge of employee health cannot be addressed only by employers. Both employers and employees need to reassess their roles and responsibilities. Employers have the responsibility to support their employees to be as healthy as they possibly can be, and it is only right and proper that employers further their efforts to encourage understanding, education, prevention and the provision of support (medical interventions and treatment) at the right time in an employee’s lifecycle. Employers can enable people to understand the health implications of their lifestyle habits and support their ability to make informed and better decisions. Technology or mHealth can be key enablers for this. However, employees also need to accept their role. They are not simply consumers of health; they must accept responsibility for their own health and wellbeing, doing their part to address modifiable lifestyle risk factors (e.g. smoking, lack of physical activity, excessive alcohol consumption, not taking time to unwind) that can all contribute to chronic disease. Wellbeing – good for the health of the business “Whether connected to workforce productivity or employee engagement initiatives, wellbeing – when done well – can extend much deeper into an organisation than cost containment alone,” says Jim Winkler, global chief innovation officer of Health Solutions at Aon. When part of a broader health strategy, employers can decrease the specific health risk factors of their workforce and see productivity gains, improved employee attraction, retention and engagement or even boosted employer brand and reputation. “Addressing health holistically and using various technologies to do so can pay off with more satisfied and engaged employees,” summarises Pronk. “And that’s good for the health of the business.” References Aon 2019 Global Medical Trend Rates Report https://www.who.int/ncds/en/ https://www.who.int/mental_health/in_the_workplace/en/ Aon EMEA Health Survey …

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19 September 2019Issue 041,
September 2019

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16 September 201911th Transatlantic Conference Report

Representatives from Europe and North America met for the 11th Transatlantic Conference from Wednesday, June 19 through Friday, June 21, 2019 in the small hamlet of Bolton Landing in the Adirondack Mountains region of upper New York state. This edition of the annual Transatlantic Conference was hosted by the U.S. National Coordinating Committee for Multiemployer Plans (NCCMP) and co-organized jointly by the European Association of Paritarian Institutions (AEIP), the Multi-employer Benefit Plan Council of Canada (MEBCO), and the World Pension Alliance, chaired by PensionsEurope for the day devoted to pension topics. According to co-organizers NCCMP, MEBCO, and AEIP, “The Transatlantic Conference is a joint effort as part of the International Consortium of Advocates for Worker Benefit Security to consider topics of broad interest to jointly trusteed pension and health plans across the U.S., Canada and Europe. The conference brings together leading experts in pension and health benefits, trustees and plan professionals from around the world to share knowledge and experiences relating to jointly trusteed benefit plans.” 19 June 2019 - Pensions Wednesday’s events began with the official welcome and opening of the day given by Michael Scott, NCCMP; Robert Blakely, MEBCO; Bruno Gabellieri, AEIP; and Matti Leppälä, WPA. The first 90-minute session was entitled Sustainable Finance & Alternative Investments and centred on the increasing focus on Environmental, Sustainable, and Governance (ESG) factors, as well as ‘green investing’. Key speakers were Edward Smith, President and CEO, ULLICO; Krisroff Wouters, Head of Pensions and Insurance Relations, Candriam Investors Group; and Carl Elia, VP of Alternative Investments, TD Asset Managers. The panel discussion was moderated by Chris Brockmeyer, Director of Employee Benefit Funds, The Broadway League. Carl Elia’s presentation, ESG Investing in Real Assets, focused on the current regulatory environment in Canada and the increased focus on sustainable investing. He revealed how TD Greystone is developing a sustainability policy that commits to reducing energy use, waste output, and generating and procuring renewable energy among other goals. Kristof Woutters’s presentation, Sustainable Investing in Europe, Latest Trends & Initiatives, showed how there are a number of initiatives and developments worldwide that are emerging from ‘niche’ to ‘mainstream’ in terms of ESG/SRI, including general initiatives such as the UN Global Compact of 2000; disclosure initiatives such as the Global Reporting Initiative and Carbon Disclosure Project; and regulatory initiatives for institutional investors. He pointed out that climate related risk is a major consideration as climate change becomes ever more economically material. Woutters also went over the impacts of various ESG approaches and discussed the approach Candriam favours. The next 90-minute session was entitled 10 Years After the Great Recession: How Have We Recovered, and What Have We Learned?, and presented by John DeMairo, President and CEO, Segal Marco Advisors. DeMairo reminded us of 2008 and 2009 when pension funds suffered the greatest losses since the Great Depression. The focus of his presentation dealt with four major questions: Have pension funds recovered? How has this changed pension fund investing? What have we learned? What supervisory tactics are now in place as a result? He began the presentation by giving an overview of the causes of the global financial crisis, the fallout, and the fixes that were made to repair the system. Ten years later, equity markets have seen significant advances, while U.S. Bond yields and returns have held somewhat steady over the decade despite lags in 2012 and 2016. The U.S. also boasts a historical optimal portfolio with overweight U.S. large cap stocks; protection and consistency in the bond market, and solid income and appreciation in the U.S. real estate market. The second presentation was given by Romain Despalins, senior statistician with the OECD. Mr. Despalins discussed the international comparisons of the impact of the financial crisis on private pensions, as well as the responses of the stakeholders in the private pension sector to the financial crisis, the trends since then, and the challenges ahead. Despalins explained that the financial crisis affected the most systems with the largest share of pension fund assets in equities, and that the impacts of the event differed by types of pension arrangements. The financial crisis also triggered an economic crisis with higher unemployment, which had a spill-over effect as members have more difficulty contributing. Responses included an IOPS study in 2018 that accounted for differences in behaviours by different strategic decisions and institutional frameworks, such as strategic asset allocation benchmark in Italy, and investment portfolios chosen by members in Chile. Other responses included more flexibility for DB plans, introduction of mechanisms in DC schemes that reduced investment risk, and alleviation of some restrictions on pension fund investments for greater diversification of pension fund portfolios (with some exceptions). Trends include positive long-term investment returns in real terms in most countries, despite the crisis, and a move by pension funds away from equity investments. The challenges ahead are still the same, however, with an aging population, low interest rates, as well as investment and longevity risk faced by pension funds and pension providers. Diversification of pension arrangements may, he said, offer protection against the different types of risk that pension systems may face. These presentations were followed by a panel discussion moderated by Monte Tarbox, Executive Director of Investments, National Electrical Benefit Fund, and Remarks by John DeMairo; Gerard Riemen, Managing Director, Federation of the Dutch Pension Funds; and Romain Despalins. The afternoon’s presentations got underway with Addressing Pension Fund Solvency with Ted Goldman, Director of Policy, Research and Analysis Department, Pension Benefit Guaranty Corporation. This session explored the importance of how pension fund solvency is defined, how plan trustees are able to manage plan solvency, and how are pension benefits guaranteed or backstopped around the world. Goldman’s presentation addressed the changing landscape of pensions and how solvency has become a real concern for many people. He also explained how PBGC encourages continuing voluntary private sector defined benefit pension plans and pledges to provide timely payment of benefits while maintaining premiums at the lowest level necessary to meet their obligations. He also discussed Multiemployer Program insolvency risks, stating that about 10 percent of 1400 plans are at risk of insolvency within the next 20 years, potentially impacting about 1.3 million participants, and how the Multiemployer Pension Reform Act of 2014 can help reduce the chance of plan insolvency, yet there are still hurdles to overcome, including attempts to educate lawmakers that have fallen short of a solution. Cameron Hunter presented the Canadian view with his talk, Pension Funding Evolution in Canada, in which he discussed pension funding rules in Canada. There are different laws for each province, he explained, and with traditional pension funding, actuarial judgement is a concern, while solvency is seen as a market value. Yet plummeting interest rates equal skyrocketing solvency liabilities, and the financial crisis of 2008 created unsustainable contribution requirements while target benefit plans were faced with substantial cuts, and the flaws in solvency funding were beginning to show. The regulatory responses included creation of a shared risk plan, removal of solvency funding, and introduction of Provision for Adverse Deviation (PfAD), which provided for a reserve held on balance sheet, with varied levels, and is generally not funded on the balance sheet but generally required in the cost of benefits. PfAD, he explained, creates volatility in funding if it changes substantially from one valuation to the next, and is additive, not inclusive, of unfunded amortization payments. Hunter also discussed its impact, which could mean that margins are stripped out of assumptions, that lower, more secure benefits could result, and that it may lead to intergenerational inequities. He observed that solvency funding needs to be permanently removed and replaced with a reasonable PfAD applied appropriately. The panel discussion was moderated by Ted Goldman, Cameron Hunter, Rafael Quevedo, Principal Economist-Statistician, European Central Bank, and Richard Ingram, Executive Director, Teachers’ Retirement System of the State of Illinois The segment Innovation in Plan Designs focused on innovative plan designs either in use or under consideration throughout the world, including target benefit design plans in Canada, as well as composite and variable annuity designs in the United States. The session featured four presentations; the first given by Robert A. Wylie, Executive Director, South Dakota Retirement System. Wylie’s presentation, The South Dakota Perspective, focused on South Dakota’s experience with meeting the challenge of providing sufficient retirement benefits at a reasonable cost for public employees of his state. A disciplined approach to plan management, innovative practices, and effective and responsible governance are key to achieving the SRDS objectives and went on to show how the current SDRS structure works, including providing funding thresholds that, if crossed, require the SDRS Board of Tustees to recommend corrective actions. David Dean, Senior Vice President and Actuary for Segal Consulting, presented a discussion about multiemployer pension plans including design considerations, and options for alternative plan designs. He covered highlights of the PBGC FY 2017 Projections Report that indicate that the multiemployer program is projected to become insolvent around 2025 and that the projected average deficit is about $65 billion. Premiums, he said, must increase by more than six times to support the program for the next 20 years, and that greater premium increases are needed to extend solvency longer. Planning design considerations should include finding a balance between benefits, contributions, and risk, he said, and managing pension risks cannot completely eliminate these risks, and that many solutions involve ‘hybrid’ plans that apply only to future benefits and where liability remains a major concern. In most cases some, but not all, risk is transferred. Options for alternative plan design include a DC plan that encompasses freeze and start DC plans, as well as hybrid plan options such as a cash balance, variable accrual, variable annuity, or composite plan. A panel discussion followed, moderated by Eric Muller-Borle, Founder, Global Benefits Vision; and with David Dean; Alex McKinnon, Head of Research, United Steel Workers; Christian Lemaire, Global Head of Retirement Solutions, Amundi; The Hon. Nicholas Sherry, Chair, Household Capital; and Sandy Matheson, Executive Director, Maine Public Employees Retirement System. The Close of Day was given by Michael Scott, NCCMP, and Matti Lepalla, WPA. Attendees were then treated to a wonderful Cocktail Cruise around Lake George aboard The Morgan, a replica 19th-century touring vessel, an event generously sponsored by ULLICO. Thursday, June 20 - Health Thursday began with Michael Scott’s Opening of the Day. Attendees then listened to presentations The Future of Healthcare: Policy Objectives in the United States, Canada, and Europe where presenters discussed the most pressing healthcare policy questions in their national debates, as well as the broader implications of the outcomes. The keynote speakers were Carolyn Smith, Counsel, Alston & Bird LLP. Smith, and Ron Loucks, founder and chief executive of NexgenRx in Ontario, Canada. Smith’s presentation, The Future of Healthcare: Policy Objectives in the United States, discussed the state of current U.S. health coverage in the U.S., comparing it with U.S. health insurance before the Affordable Care Act (ACA) was passed in 2010. Focusing on the ACA, Smith covered its initial reform focus through the “second wave” in 2014 that increased access, affordability, and quality. After the attempt in 2017 to repeal the ACA, there have been post-repeal/replace incremental legislative changes including a new round of litigation. The Democrats regained the House of Representatives in 2018, however, and are making Medicare for All a main plank in their platform, with House leader Nancy Pelosi arguing for shoring up the ACA. This is sure to be a 2020 Presidential campaign issue. Ron Loucks presented a talk entitled The Future of Healthcare: Policy Objectives, pointing out that Canada’s system of Universal Medicare is a reparative model that focuses on managed access instead of managed care, with effort going into reducing wait times for non-emergency, urgent, and elective treatments. He mentioned that Canada’s politicians always speak about greater access in their election promises, and that nothing is more talked about today as a policy objective than Universal Pharmacare, which is a major promise made by the Federal Liberal Party. At issue in terms of policy is the fact that the Liberal government led by Justin Trudeau is not going to be sustainable for more than one term and that the next administration will have to shoulder the responsibility of pushing National Pharmacare. After a break, the presentation topic turned to Mental Health in the Workplace, which discussed trends in mental health coverage and policy. The keynote was given by Pamela Greenberg, President and CEO, Association for Behavioural Health and Wellness; Joseph Riciutti, President and CEO, SEB Benefits & HR Consulting; and Paul E. ter Wal, LLM, CSP, CEO Team ANDARE. Greenberg’s presentation dealt with the top behavioural issues for health care plans in the U.S. including mental health parity, the opioid crisis, telehealth, patient directed care and others. Joe Riciutti presented Workplace Mental Health, A Canadian Perspective: One Legal, One Logical, which revealed a focus on mental injury, an emerging workplace issue attributed to psychosocial risk factors and the trend toward legal responsibility of organisations to insure a psychologically safe and healthy workplace. Paul ter Wal discussed the Netherlands and how they deal with aging and mental health in the workplace, most specifically burnout and work stress and how there needs to be 24/7 mental care available to deal effectively with workplace mental health issues. The afternoon of the second day got underway with a presentation about The Legalization of Marijuana, dealing with such questions as: What does legalization mean for plan participants? Are there concerns about plan participants rights? Keynote speaker Ronald Pink, Q.C., Pink Larkin, presented Medical Marijuana: The State of the Law in Canada, which discussed the new laws legalising marijuana for recreational use, the definition of ‘impairment,’ and accommodating the use of medically-prescribed cannabis in the workplace, as well as how benefits plans deal with medically-prescribed cannabis. Robert Blakely, President, MEBCO, presented Weed: Was Willie Nelson always right?, which discussed the legal intricacies of legalisation, arguing that there are still many arguments against the efficacy of marijuana as a recreational drug, and the rights and responsibilities of employers when dealing with employees who use recreational marijuana. The panel discussion was moderated by Pink, Blakely, and ter Wal. The late afternoon session, Managing Societal Costs of Disability, considered the holistic approach to managing the societal costs of disability currently underway in Finland, as well as the various other approaches to disability throughout the world. The keynote, by Jaakko Kiander, CFO, Ilmarinen, the Finnish Alliance of Pension Funds, was entitled Finnish pension system and disability risk management. Kiander went over how Finland has managed its national pension system. A panel discussion followed, moderated by Bonnie Summers, Executive Director, BCBS Association National Labor Office, with remarks by David Brenner of Segal Consulting, Eric Egan of ManuLife, and Hugh C. Hart, GBA, VP, Sales and Account Management at NexgenRx, along with Jaakko Kiander. Friday, June 21 – Caring for Non-traditional Workers Friday’s sessions began with Opening of the Day remarks by Michael Scott. The first session was entitled New Forms of Work / The Gig Economy European Commission Study. Keynote speakers were Matti Leppälä, Secretary General and CEO, PensionsEurope and Chair, WPA; Dan Doonan, Executive Director, National Institute on Retirement Security; and Bernd Merz, BG BAU Germany & International Social Security Association. Matti Leppälä presented the challenges facing pension systems with a changing global workforce, especially with the structural changes in the world labour market, where a growing number of people are moving toward non-standard forms of employment. He added that European institutions understand this major shift together with the heavy repercussions for our existing social security systems, coming up with policy advice and initiatives with a holistic approach such as the European Commission’s High Level Group on Pensions. Dan Doonan’s presentation, Insights on the Future of U.S. Retirement Challenges, discussed the effects of job-hopping on pensions, and the increasing needs of millennials when it comes to planning for retirement, and the key factors affecting the likelihood of pension coverage in the workplace. His presentation made clear that the younger generations in the U.S. do not perceive solidarity and social cohesion in the same way as their forefathers, which has great consequences on the design and social coverage of traditional welfare systems. Bernd Merz’s presentation discussed numbers and percentages of people either in the gig economy or considering joining it, and what services gig workers provide, as well as the dependence of gig workers on their employment as a supplement for some other form of income. He also discussed demographic scenarios resulting from gig employment in the EU. A panel discussion followed, moderated by Shawn Haggerty, President, UFCW Local 175; with Werner Beulen, Construction Policy Secretary, The European Federation of Building and Woodworkers; Domenico Campogrande, Director Social Affairs, European Construction Industry Federation; and Dana Schäfer, SOKA BAU, with a closing statement by Walter Sailer, SOKA BAU. Ms Schäfer explained the decisive influence of social partners and their paritarian institutions on the European Social Model, since in many European countries these institutions regulate important industry-specific aspects of working life, covering vocational training schemes, paid leave schemes or occupational pension schemes. Most importantly, the paritarian institutions secure social and economic standards, particularly by financing modern vocational training for a digital labour market, thus fostering the skilled workers of tomorrow. Noon on Friday saw the close of conference with final remarks by Michael Scott, Robert Blakely, and Bruno Gabellieri, Secretary General of …

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16 September 2019The History of Pooling at Generali

Marc Reinhardt, Andrea Valacchi and Thierry Mestach Introduction to GEB Part of the Generali Group, Generali Employee Benefits (GEB) is a leading business line focused on providing solutions in the space of employee benefits for multinational corporations. With a network presence in more than 130 countries and around 25% market share, GEB offers a broad range of services and products that multinational employers may need for their workforce and their families, from locally admitted policies to cross border arrangements for mobile employees and expatriates, as well as the most sophisticated employee benefit solutions at a local level including multinational pooling and Reinsurance to a captive. At Generali’s Investor Day in November 2018, the Group set out its three-year strategic plan to investors, outlining its vision to become “A life-time partner to Customers”. This plan also made clear the importance of GEB to the Group, with continued investment in the employee benefits business planned. Over the past year, the Group has optimised its geographic footprint through a strategic review; is enabling digital transformation of distribution; and is transforming its operating model to ensure organisation simplification and scale up Artificial Intelligence. From the 20th century The concept of pooling was born in the U.S. in the 1950s in direct response to the fact that some companies – and, hence, employee groups – operated across numerous countries. Employers wanted to achieve economies of scale: bundling their insurance contracts together and enjoying volume discounts. At that time, international refunds of 30-35% - even 40% in some cases – were the norm. Contrast this with the 7-10% average dividend now and it becomes clear that times have changed. The global financing function of pooling now takes second place to a quality network that can help companies manage some of their biggest people issues: namely recruitment, retention, absenteeism and productivity. More on which later. Meanwhile, Marc Reinhardt, Director GEB Americas, GEB, comments: “It’s safe to say that U.S. companies were more sophisticated – in a financing capacity - than their European counterparts in the 1950s. Consequently, pooling was slow to develop for around a decade, but really took off in the 1960s. U.S. companies were expanding overseas and wanted to achieve the same volume discounts they were now used to with insurance carriers in the U.S. Up until 1992, many of the European markets were tariff markets. In other words, rates were high and, hence, technical margins were fat. Employers operating in Europe were spending a lot but, at the same time, not benefitting from any kind of experience or volume rate.” “At that time, there was also no way of monitoring the scheme experience and performance. Pooling helped tick all these boxes, affording, on an annual basis, savings in the form of a dividend as well as a historical snapshot of scheme performance.” Generali first got involved in pooling in 1966, with the first pool established for 20th Century Fox in 1967. As a side note, captives also came into being in the early 1960s. Originally designed to help mitigate a company’s property and casualty risk, GEB represented one of the first networks to use a captive to house international employee benefit programmes. captives have subsequently earned an enviable reputation for helping global companies: mitigate risk; reduce volatility; stabilise costs; improve business intelligence; gain central control over employee benefits and enhanced service at local country level. To the 21st century Fast forward over 50 years and the world – and pooling – looks very different. For a start, we’ve seen rising life expectancy. In 1960, the average person could only expect to live about 52 years, whereas in 2010, that individual could expect to live nearly 70 years¹. Also, in the 1990s, tariff markets in many countries of the world were eliminated. Rate levels subsequently reduced due to much increased competition and the associated downward pressure on premiums. Consequently, many pools started working more closely with product providers to help maintain savings. Through these relationships, captives really started to take off, giving to global companies an unparalleled level of control in terms of managing risks and reducing costs. But they’re not for everyone. Putting in place a captive is a big step and not one that should be taken lightly. It requires a company to be very well governed and organised. It also requires considerable commitment in terms of time and costs, in the set-up stages at least. Enter Global Underwriting Programmes (GUPs). GEB represented the first network to develop the GUP concept, around 10 years ago. It gives clients another option in addition to pooling – a next step in effect – with regards to risk transfer, whilst still speaking to the interests of the network in terms of managing risks together with the client. The success of a GUP as an innovative financing solution is predicated on a number of key elements including commitment to a long-term partnership (minimum of three years), combined with technical expertise and pricing flexibility from the insurer. Pooling now has to compete for prominence with both captives and GUPs. Andrea Valacchi, EMEA Director at GEB, says: “Most global RFPs [Request For Proposals] from European companies now ask about GUPs and captives over pooling.” “That said, pooling continues to prove popular as part of an overall global benefits strategy, especially amongst mid-sized multinational companies that are expanding and decentralising. They want to capture what’s going on locally and pooling represents the right tool to give them that governance and control.” Marc adds the picture is pretty much the same in the U.S. “There are fewer pooling opportunities here too. Global companies want to evidence savings upfront: an advantage that both captives and GUPs afford. pooling, in contrast, requires more patience as the dividend comes 18 months down the line.” Where pooling offers an opportunity to optimise the financial and information flow of international employee benefit plans on a retroactive basis, GUPs allow for a proactive funding strategy. This encompasses not only upfront pricing optimisation across the entire programme but also enhanced terms and conditions negotiated centrally. This sits well with the current trend amongst global companies towards decentralisation. In other words, decisions on benefits are increasingly being left to local subsidiaries who benefit from the cost efficiencies and clout – when it comes to negotiations – afforded by the parent company, the latter of which also handles functions such as governance and compliance on behalf of the whole group. In this environment, the dividends afforded by pooling are still valuable but fluctuations and uncertainties can arise, due to the fact that they are calculated according to the performance of the benefits portfolio in each country in which the company operates. Some may not be performing as well as others. The upfront premium rates optimisations on GUPs, on the other hand, are calculated according to each line of cover. Network providers will require three years’ worth of premiums and claims data for all countries (large and small) in order to help predict future performance. Also, a premium volume threshold applies, in order to make the programme financially viable. Networks will then aim to offer double-digit discounts. It has to be compelling. Research by Willis Towers Watson² shows that well-managed pools can achieve savings of 14% or more. Well-managed captives can achieve savings of 25% or more but incur additional costs to maintain. GUPs will sit somewhere in-between. Recent innovations from GEB GEB last year launched its innovative pooling product LifeCycle. This was designed in response to the growing number of mid-sized companies on the competitive international stage and the requirement on HR leaders to do more with less in terms of attracting and keeping the right people for the job. The minimum entry requirements for international clients is: annual risk premium spend of €20,000; and just one initial contract in place, such as group life or group income protection. The product adapts to the client’s size and risk profile over time on the basis of premiums and countries included in the pool. So as a company grows or contracts the pool could switch from being a multiemployer pool (for smaller groups) to a standalone pool (for larger companies) and vice versa, allowing continuing access to the benefits of pooling without being required to review and sign a new pooling agreement when circumstances change. This helps provide stability over time so that the pool can remain an attractive option for subsidiaries to participate in. Andrea comments: “Prior to LifeCycle, when a company wanted to move between a community rated multiemployer pool and a standalone pool they had to go through a lengthy legal and compliance process. Now, whether they are going through a period of acquisitions or divestitures, the pool flexes automatically with them.” “This also brings to more mid-sized companies the non-financial benefits of a pool. We give to our entire pooling customer base the kind of sophisticated reporting tools that were isolated to captives in the past – for example, healthcare utilisation paid claims reports. This allows HR to collaborate more effectively with Risk Managers, effectively providing a risk management tool.” Alongside LifeCycle, GEB also designed and launched MyGEB, a new communication platform for employers and brokers. This provides a wealth of benchmarking information on benefits and market practices in other countries. It also allows for multinational pooling simulations: showing what a benefit would look like in the LifeCycle product (i.e. benefit premiums for each country in which the company operates and potential dividend payout – overall and per country) using either actual figures or estimates based on GEB’s existing portfolio. Latest market shifts The focus for networks is now much more on the quality of local providers and the service they can provide. Thierry Mestach, Chief Network Officer at GEB, comments: “Key for us is offering a panel of really strong providers: the best in class in the most important countries – namely those where the highest percentage of premium volume is generated. The global financing aspect now comes secondary to helping our clients manage their top issues, such as employee health and wellbeing and absenteeism.” Marc adds: “When we’re invited to final presentations as part of RFPs, we are now asked to provide evidence of the expertise of our local network partners: their local service capabilities. This represents a big shift.” The global health and wellness team at GEB is key in this regard. GEB pioneered global medical dashboards for captives in 2012 and stepped up its game last year in terms of content, format and functionality, providing unparalleled access to clear and illuminating information. GEB is now first to offer dashboards that are tabular (easier navigation in and between countries), interactive (drill-down capability for deeper insights) and with embedded benchmark data (immediate comparative analysis). GEB’s dashboards allow for individual interpretation of the graphs and tables, context about the market and local cover, and recommendations on how to mitigate the trends and cost drivers. In another new development last year, GEB launched Interactive Booklets. All pooling and captive clients with more than one year of experience will now receive a dedicated username and password so that they can log in to their interactive booklet. This provides clients with year to date comparisons on several metrics: premium; claim; and balance. Users can select KPIs by aspects such as line of risk, country and region in order to look at their data. Thierry says: “The market shift from payer to partner is reflective across the insurance industry, with providers moving from being claims payers to tackling issues.” The need to provide truly integrated services, tailored to client needs, across protection, prevention and assistance is essential now. However, with trends come new challenges for pooling. For example, the growing trend towards voluntary benefits could raise questions with local regulators if such benefits are included in a pooling arrangement. Andrea explains: “pooling clients benefit from tax deductions at local level. But if personal contributions – for example, through voluntary benefits or employee contributions to a compulsory pension plan - go towards building up those dividends, local countries will increasingly question this. Why? Because the sole beneficiary is the parent company [which is often based in a different country to where the personal contributions have been made].” “The regulator in Norway has already addressed this where pension funds are concerned. Any margins arising from personal contributions have to go back to Norway to replace the pension fund.” Marc adds that there is already regulation and law around this in the U.S. The future On a final note, Thierry acknowledges that GEB is a network, not a consultant and it is only through collaboration that the complex needs of clients will be met. “We need to work in partnership. We can’t do this on our own. We’ll only add value to our clients by working as part of an ecosystem.” “The world was relatively simple before. It’s now much more complex thanks to decentralisation, regulation, data privacy – plus the many nuances by country – not to mention the overriding need for companies to make much more of what they’ve got.” “But sometimes through complexity, you’re thrown interesting opportunities.”  References How much has life expectancy increased since 1960? Openpop.org, a collaborative blog on global population issues [accessed July 2019] https://www.openpop.org/?p=695 Multinational pooling and captives increasingly used to limit cost of insurable employee benefits globally, Willis Towers Watson, March …

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16 September 2019Interview with Tobias Winkler & Marcel Petschek – Albatros.de

GBV interviews Tobias Winkler and Marcel Petschek of Albatros and discusses the changing face of employee benefits within the Lufthansa Group, trends in the travel industry, performance metrics and indicators and the road ahead. What role does Albatros (Delvag) play and how does it work within Lufthansa Group? Global Benefits Vision: Could you describe Albatros today? What is its role within Lufthansa, what it does, how it’s organised, where it reports, and also the interaction with your in-house insurance company? Perhaps, as a first introduction, we should say a few words about a very German characteristic of the market, which is that big companies tend to have in-house brokers. Tobias Winkler: It’s the same with us at Lufthansa; we have an in-house brokerage firm called Albatros, and Albatros is completely owned by our captive, which is called Delvag (Delvag Versicherungs-AG). Delvag was founded in 1924 and is completely owned by Lufthansa. It is a very German setup having a captive and an in-house brokerage firm. But we are unique because, in our case, the captive is the direct subsidiary of the Lufthansa Group and the in-house broker is a subsidiary of Delvag. We are also unique in that our captive is based in Germany. There are not many captives based in Germany. Risk management: aviation, marine, and reinsurance The role of Delvag is to take risks. They specialise in three different lines: aviation, marine, and reinsurance. Albatros, as the in-house broker, is the insurance risk manager for the Lufthansa Group, so they are the internal consultants and broker for the Lufthansa Group and they also have three areas: aviation, industry with all P&C coverages, and employee benefits. Those entities – Albatros and Delvag – also do third party business, but only in our core areas; for example, aviation, marine, and some benefits like loss of license for pilots or medical solutions for business traveller and expatriates. This differentiates us from our peers. We just focus as brokers not only on the Lufthansa group, but we also do some third-party business. GBV: Out of curiosity, it’s understandable that you are involved in aviation, but why marine? Do you own a shipping company as well? TW: No, not yet (laughing)! We have Lufthansa Cargo, and we established some special know-how internally over the last years and so we developed special products for some niches. It is less the big cargo vessels, and more the air cargo and some transport specialties. GBV: I understand that Albatros also reports to the Delvag group. TW: Yes, that’s right and our insurance group reports to the Lufthansa CFO so we are part of the finance division. Albatros and Employee Benefits GBV: What are Albatros’s currents assets in benefits and in global benefits: relationships with insurance carriers, countries, products, teams, structure/organization? TW: As I mentioned, we have the three divisions within Albatros: aviation, industry, and employee benefits. One of our biggest assets is that we have built a sophisticated employee benefits department teams here. Our scope starts with German insured pension plans that we develop and administer and continues with normal insured employee benefits here in Germany as well as abroad: group life, disability, AD&D, medical, etc. But as we are an airline, we have a significant workforce of cabin crews and pilots, and they have special needs in terms of insurances. The normal disability coverage doesn’t meet their needs. So, thirty years ago we set up some kind of loss of license for pilots and also flight disability insurance for cabin crews, which is quite unique worldwide. In addition to German pension plans and insured benefits we also manage all the business travel coverages, but not just for the business traveller (short term) but also long-term assignments such as expatriates—that’s what we do in our department. And this is a pretty broad scope of lines of coverage ranging from medical to life to pensions to business travel. But this helps us to understand the complete picture for the Lufthansa group because it’s not just about a single insurance product, it’s about understanding how are the different types of coverages embedded into other benefits or processes internally; and see how fits everything together. And that’s really the differentiator, especially in combination with pensions and risk benefits, which is done by us. And this set-up helps us also to work very closely with Lufthansa and the different business units. It’s a great partnership and makes a lot of fun. How Albatros interacts with 3rd-party insurance companies GBV: Perhaps you could comment a bit on your relationships with insurance carriers—not just Delvag but third-party insurance companies? TW: As we have a lot of aviation risks, also in EB for the crews, not all insurance markets are capable or willing to underwrite that kind of target group, so we need specialised insurer, like Allianz (AGCS), Alte Leipziger or HDI. When it comes to normal insured benefits, we currently have three preferred partner networks worldwide: Insurope, Generali, and Maxis. We are interested in a long-term, sustainable insurance program and therefore we prefer to work with an insurance carrier that is not just interested in getting business for only one or two years but get a very good and sustainable insurance partner and establishing a partnership with them. GBV: In terms of countries, I suppose that your coverage is, by definition, worldwide so you have people everywhere in the world? TW: Yes. When it comes to the aviation-specific risks for the crews, it’s mainly in our big aviation hubs: Germany, Switzerland, Austria, Belgium, Italy. Our local employees with their insured benefits are based more or less all over the world in approx. 100 countries. GBV: For ground crews and maintenance people I suppose? TW: Yes, that is Lufthansa Technik, LSG for the catering, our IT colleagues from Lufthansa Systems, and some other business units like AirPlus, etc. GBV: Can you tell me about the teams at Albatros that deal with employee benefits? TW: Sure. We have two teams: one is focused on German benefits systems, and the other is focused on all international benefits. The German team handles all the insured pension plans: the German risk benefits like accident insurance or loss of license for example. The international team takes care of all benefit plans and insurances outside of Germany, or international insurance plans like expat medical, business travel and loss of license. All of this is administered and managed by the international team. We have two offices: our main office is here in Cologne where Albatros and Delvag is headquartered; but we also have an office in Frankfurt on the Lufthansa premises, where we have another four people sitting who deal with international benefits and expatriate coverages. I should mention that the motivation for why we split the benefits team into national and international is so we could be one single point of contact for our internal stakeholders. And we still see that domestic benefits and international benefits are still separated in HR organizations. That set-up allows our key stakeholders to have just one single point of contact internally at Albatross and we, on the other hand, can service them much better and more efficiently if we always have the same people involved. Albatros performance metrics, indicators and growth plans GBV: What are Albatros’s current key numbers or indicators for Albatros or Delvag? TW: We have approximately 320 employees at Albatros/Delvag and the premium volume underwritten by Delvag is more than 100 million which is not only from the group but also a third-party business. Our captive has an “A” rating from A.M. Best. Albatros administers and places the biggest aviation policy in the world in terms of premium volume with over 1,700 aircraft covered. We broker over half a billion in premium volume and administer around 400,000 policies. In our division Employee Benefits, we cover more than 22,000 cabin crews and over 10,000 pilots and insure more than 1.5 million travel days. GBV: What is your plan for the next five or ten years? TW: Our biggest task in the future is still being the insurance risk manager for the Lufthansa group. We would like to have even more consolidated and efficient global insurance programs. We are partially centralised, this is nothing new for a German company; but we would like to have more consolidated programs and faster and better access to data. I know that data is a big challenge for the insurance industry, but we need this because working with that data will be one of our most important roles as risk managers in the future. We have to work with the data on time and not with pooling maybe one or two years later; we have to do risk analysis and maybe even use AI for some of those analyses, that will be a trend I’m sure. I’m sure we can optimise our insurance programs even more with this. This will be one of the key focuses in the future. GBV: Will you handle that internally or externally? TW: We want to do it internally, and we are currently looking for IT systems that would be suitable for that kind of task. We might have some external help, but the number-crunching and the analysis should be done by us. GBV: Please describe the global business travel insurance product(s): coverage, target clients, price, distribution, claims handling, and all that? Marcel Petschek: Maybe at this time I will take over. Our target client is the Lufthansa Group, and so we are focusing and dividing between local staff and crews. We also separate the coverages and the products for the BTI policy. E.g. the coverage for local employees all over the world, where lots of entities are looking for solutions. The BTI includes incoming and outgoing business trips, special coverage for short term assignments which are comparable with our expat policy. We have special policies for the crews in place due to their individual requirements. Furthermore, we have a special product for incoming employees when they need additional coverages for loss of luggage, liability, accidents, and so on. This is included in the product as well. Some airlines are very interested in luggage insurance for the crews. GBV: So, it is mostly for internal purposes, is that correct? MP: Yes, in general. We try to have one coverage for all products, so the only difference is the pricing of the products. Claims, Risk, and Coverage GBV: What about claims? Do you use a TPA to handle claims all over the world or is that done internally? MP: In the past, we did it partially by ourselves but in the new setup we outsourced everything to the insurer. GBV: It’s not Delvag that is carrying the risk? MP: Currently not. TW: Actually, we did an extensive RFP and the risk carrier is Ergo Reiseversicherung, but we will investigate later whether this might be an interesting risk for our captive. If I could say a few more words with regard to claims handling, Marcel just mentioned that we did it partially in the past but actually, with claims handling and BTI, my very clear opinion is that this has to be done by someone with economies of scale and the technical and IT environment for that. This is not us, and so one of the very important criteria in our RFP: what are the claims handling capabilities as well as the IT capabilities of the insurer? Since a couple of years, you don’t have to send invoices via paper to your carrier: you can upload them via mobile app, etc. That kind of stuff is crucial when it comes to high-frequency volume like BTI policies, so it was a clear goal of ours to outsource that kind of administrative work. GBV: Let’s move on to the why and the how of how you developed that product. MP: It started at the end of 2017. We had nearly 7 different insurers in place for all the coverages worldwide within all the entities of the Lufthansa group and that with different benefit tables. So, the business units had different coverages in place with different pricings and calculations. As one can imagine, we had very complicated and different processes. We also needed to have online solutions available. As Tobias just mentioned it has become very common for expat policies where the employees have an app to upload their invoices into the system and get a reimbursement within a couple of days. TW: Here is a little anecdote: One business unit called us and said “how is this person covered when he travels to Russia?” and we said “Well, we have to check; it’s not clear what business unit he is in and there are different coverages within that business unit and we have to check to tell you if he is covered and how he is covered,” and so this is an example of how complex the BTI world of the past was within Lufthansa. It grew historically, and honestly, too complex and too opaque, and so the motivational driver for us was to keep it simple and reduce the number of insurers tremendously and it’s just BTI, right? So, it’s just coverage and emergency support if something happens. We just need a solution; we don’t need a big complex thing around that solution. Also, as BTI is not the biggest, most important policy, we planned to do this a couple of years earlier but it was always re-prioritised during the year., But by the end of 2017, we said we have to change the BTI world now. GBV: How does the Global Business Travel Insurance product interact with other coverages (maybe health, death & disability, expat insurance, workers’ compensation and so on)? MP: Maybe one example is layover when the pilot or the crew have to stay overnight or even longer. During that time, they must be insured against health risks. Currently, they are not insured. All these cases we are doing manually including to take recourse against statutory health insurance in Germany. Everything is handled by Albatros. There is clearly a connection to our BTI policy so our project at the moment is to combine them and find a suitable solution. to manage it in a better way and in the same way as in our BTI policy. We also have an overlapping situation with travel-related topics like security assistance or repatriation. Lufthansa Group is offering, with quite a small range of competitors, repatriation for cases all over the world and they transport the injured back via a triple 7 in a medical cabin or on a stretcher. As this is the same service we have included in our BTI policy why shouldn’t we try to combine that to the coverages we have in place all over the world. MP: At the end, you get a better overview and the goal is to save money. The aviation business is a very price-sensitive driven business. GBV: Anything more you would like to add about the product per se, as it is today? TW: It’s an evolving product, because the more interaction we have internally between the business unit and stakeholders, we discover even more opportunities to either exclude or include coverage internally, so, for example, we discover new topics or areas where a solution might make sense and this is an ongoing evolution with travel security for the future, and less about the transaction and more about having an integrated solution, which is the best setup for us as a group. The transactional role is less important. Travel industry and trends GBV: How do you see the travel insurance industry now? What kinds of new trends are on the horizon? TW: Digitalisation is definitely one of the drivers; it’s about services; it’s about digital solutions. Especially with BTI, which is a high frequency/low severity risk, so most of the process should be digitalised, where maybe the provider gets their money directly from the insurer and everything is paid directly for the employee. Also, everything can be checked digitally, and reimbursements can be made quickly. Having that kind of value chain as digitalized as possible and developing new solutions for employees, like what is really important to them when they are abroad—having access to providers, for example, will be more important in the future. Thus, it’s less about having insurance coverage and more about having technical solutions and the help one needs, and how easy it is to use it if they really need it. Convenience is another factor, which calls for videoconferencing with doctors which is not yet common. Some providers have tried it, but it’s not yet established. MP: All these new wellbeing products like telemedicine have been in discussion at the moment but we have another focus on worldwide medical inflation, especially in Asia and the US, which is almost above 10 per cent. We have to take care that the premium is going to be stable and for that, we need an insurer or a TPA who takes care of that and provides the right local contracts. GBV: Within that context, what would be your medium- to long-term priorities for that product going forward? TW: One is, as I’ve already said, it’s high frequency/low severity risk so we want to investigate whether we want to include it in our captive or not, so that’s a medium- to short-term goal; and, as technology advances, it’s about furthering development of technical solutions, tailor-made to our client, and seeing what kind of developments arise in the market and how can we make that kind of solution more convenient for the insured person. Technical innovation is definitely one of our most important action plans for the future. And, as always, when we did the BTI rollout, we didn’t get all policies, so we would like to include even more policies in our program and make it more attractive. GBV: Perhaps you could speak about the biggest opportunities and challenges going forward at Albatros in general? TW: One of the greatest opportunities I see is the chance to integrate our insurance solutions into the Lufthansa ecosystem even more. So how can we be more integrated than just being an insurance solution and deliver an added value. That’s one of the greatest opportunities we will have in the future. The challenges are getting data and sometimes getting buy-in from all the various business units and trying to find a common solution globally. That’s one of the biggest challenges for …

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16 July 2019The Toll of Zero-Hour Contracts

Ernestine Gheyoh Ndzi and Janet Barlow The number of workers on zero-hours contracts continues to rise in the UK. The Office for National Statistics (ONS) estimates that between October and December 2018 there were between 777,000 and 911,000 people working on zero-hours contracts. But the impact of such contracts seems to be underestimated by the government. An independent government review of modern working practices states that: “To ban zero-hours contracts in their totality would negatively impact many more people than it helped”. The report mentions that almost a fifth of people on zero-hours contracts are in full-time education and banning zero-hour contracts would make it difficult for them to combine work and studying. But research has demonstrated how detrimental zero-hour contracts can be on the psychological and mental well-being of workers. Anxiety, stress and depression can be common for workers on zero-hours contracts because of the financial and social insecurity. Workers on zero-hours contracts are not paid sick leave and tend to work even when they are ill for fear of losing their jobs. So although statistics show that a third of all sickness notes signed off by GPs between September 2016 and September 2018 were for mental health reasons, the reality is that the number of people struggling with mental health problems while in work is likely to be much higher as these statistics do not include workers on zero-hours contracts. As part of our research, we interviewed 35 zero-hours contract workers and heard how this precarious employment situation was affecting their lives. They told us how a lack of sufficient sleep, poor eating habits and relationship problems were all contributing to the mental toll of being on a zero-hours contract – as one of our interviewees explained: I’m just tired and don’t have enough sleep … because when you sometimes finish work maybe [at] 11pm, you get home, all you need to do is eat and go to sleep straight away, so you don’t give yourself time for that food to even digest. Everything is mixed up because you are on a zero-hour contract and you don’t work specific times, [so your] timing is not stable. Zero balance For many workers on zero-hours contracts, there is a distinct lack of work-life balance. The uncertainty of not knowing when work might be – during the night or day – and when they should sleep, are issues workers on zero-hours contracts must deal with on daily basis. Financial insecurity also means that workers are unable to refuse work when it’s offered at a time when they should be sleeping. The fear of not getting subsequent job calls means that workers feel they cannot refuse work even if they’re exhausted – which impacts upon their mood and productivity. The zero-hours contract workers we interviewed also spoke about not having enough time to eat or having poor eating habits due to their unstable working hours. Some workers on zero-hour contracts are given shorter breaks than permanent colleagues – forcing them to skip meals or eat fast food more often. One of our interviewees explained the impact this had on their life: It really affects stuff like eating … you’re kind of holding on to eat until they let you [and] it affects the way you eat, it affects your social life. Life on hold The workers we spoke with explained how the precariousness of zero-hours contracts meant they had had to miss or cancel family commitments because work suddenly became available. For them, everything has to stop when a job call comes through. Participants spoke of the stress of being pulled in two directions – needing to earn money to meet household expenses but also wanting to spend time with their family or partner. Sometimes I run into problems with my wife because I haven’t money for the family… when you’ve got kids going to school, you’ve got people who have to eat … you’ve got bills … [and] you’ve got to buy clothes for them. The UK is experiencing record levels of employment, with over 32m people in work. But many workers and their families continue to struggle to survive financially. And as our research shows, although more people may be employed than ever before, the jobs they are in are often precarious, unstable and unreliable. There has also been a rise in the number of people who have to work in more than one low paid job to make ends meet. Zero-hours contracts exploit workers. And despite what the government’s report suggests, and the fact that zero-hours contracts tend to work very well for employers, the vast majority of people on zero-hours contracts want out. The only way to tackle this situation is to ban zero-hours contracts altogether. This will enable more people to have access to secure jobs with decent working hours and opportunities for …

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16 July 2019Body Organs Most at Risk During A Heatwave

Pieter Vancamp In June 2019, much of Europe was struck by early heatwave, with temperatures reaching nearly 46 Centigrade (115 Fahrenheit) in France, an all-time record. A heat wave is characterised by extremely high temperatures over the course of several days and nights. They have significant impact on our daily lives – we feel overheated and tired. When a heat wave strikes, many governments activate a “heat action plan”, advising those affected to drink water, avoid strenuous exercise, and stay cool. If not, one risks having a heat stroke, which can be potentially life-threatening. But how exactly does the human body deal with such extreme temperatures, and why is heat so dangerous? Which organs are affected, and when could things take a turn for the worse? Staying cool The core temperature of the human body usually fluctuates between 36 and 38°C (97 to 99°F). Temperatures within this range allows biochemical reactions to proceed normally, which is vital for proper functioning of cells and organs. The human body is also well equipped to deal with a variety of environmental conditions that might threaten its core temperature. When the core temperature deviates from the normal range, the body initiates physiological responses that in order to return its temperature return to normal. This thermoregulatory response is comparable to a thermostat at your home; once the in-house temperature strays from the ideal temperature, heating or cooling systems activate to return to the preferred temperature. In the human body, this thermostat is located at the base of our brain, in a region called the hypothalamus. Information provided by temperature sensors located in our skin, muscles, and other organs is analysed, and when necessary, physiological response is initiated. The first and most important response to increasing temperatures is heat dissipation via the skin and extremities of our body, such as our hands and feet. We start producing sweat that will evaporate on our skin, shedding heat in the process. This system is very effective in cooling down the body, but can require up to 2 litres of water per hour in cases of extreme heat. The body adjusts its water housekeeping as much as possible, but to sustain thermoregulation, it’s vital for us to refill the body’s water reservoir. If not, one risks running out of water, and thus losing the ability to sweat and cool down, resulting in overheating of organs. Via the drinking water, we also need to take up electrolytes and salts, which maintain a normal blood acidity, crucial for cells to function. From brain to kidneys To understand what can go wrong, let’s take a look at how the thermoregulatory response affects the function of multiple organs, and how each organ reacts to extreme heat. The first is the cardiovascular system. For us to sweat and cool off, blood flow shifts from the central organs to the periphery of the body – you’ve no doubt noticed that people who are overheated are often blushing. The loss of water through sweat and the redistribution of the blood flow causes a fall in blood pressure in the central organs. To maintain blood flow to the vital organs, the heart tries to compensate by elevating the heart rate. However, if blood flow redistribution is accompanied by too much water loss, blood pressure will drop dangerously and cause fainting, an important sign of a heat stroke. In a worst-case scenario, it can lead to heart failure if left untreated. Another vital organ that suffers under temperature stress is the brain. Increased temperatures disturb communication between nerve cells, as the heat affects DNA and protein structure as well as cellular membrane integrity. Dehydration also causes electrolyte imbalances, which can disrupt nerve-muscle cell communication. The longer the overheating lasts, the more serious the consequences can be. Cognitive pathways can be deregulated and provoke emotional alterations such as increased anxiety, headaches and impaired judgement. Remarkably, one of the ways the brain cools is through the respiratory system. The body increases breathing frequency, cooling the blood flowing to and from the brain. The flowing air can be seen literally as a sort of natural air-conditioning system. However, an adverse effect is that blood pH rises due to decreases in bicarbonate and CO2 pressure, which could endanger cell functioning in other organs. The intestine is another major organ system receiving less blood due to its redistribution to the periphery. It impedes proper functioning, and in extreme cases can cause nausea and vomiting. Finally, the loss of water and salts also elicits responses in the urinary tract. Under the influence of a special hormone from the brain, antidiuretic hormone, the re-absorption of water and salts is stimulated to counteract the blood pressure loss in the cardio-vascular system. As a result, our kidneys produce less but more concentrated urine, which is browner in colour, and we go less frequently to the bathroom. Prolonged periods of high temperatures and dehydration can result in tissue damage in the kidneys. Listening to your body One can understand now that drinking water, taking up salts and electrolytes, and staying out of the most intense heat is an absolute necessity for our body’s own good. People who do not listen to their bodies, do not drink water and neglect the advice given by health authorities during hot weather can push their bodies to the limits of human physiology. They could suffer exhaustion or heat stroke, which can have potentially fatal consequences. Those particularly at risk are the elderly and heart patients whose cardiovascular system is already overstressed. Moreover, elderly might be less aware of the dangers of heat, as their body heat sensors function less well than those of young people. Babies and toddlers depend on their parents to take the necessary measures to protect them. The best advice during a heat wave is, in essence, to do what we already know: Drink plenty of water, while limiting consumption of alcohol and caffeine, which have dehydrating effects on the body. Stay out of the sun, seek a cool place, and follow the advice given by health authorities. Help those that are particularly vulnerable in hot conditions, in particular infants and the …

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16 July 2019Salt, China’s Deadly Food Habit

Monique Tan People in China have used salt to prepare and preserve food for thousands of years. But consuming lots of salt raises blood pressure, increasing the risk of cardiovascular disease. Cardiovascular disease, which includes heart attack and stroke, now accounts for 40% of deaths in China. It is well known that salt consumption in China is high, but accurate assessments are scarce. Public health experts need robust estimates of salt intake to help them develop strategies to reduce this intake. An example of a promising strategy is replacing regular salt with potassium salt, which contains less sodium (which raises blood pressure) and more potassium (which lowers blood pressure). The most accurate way to measure salt intake is to measure the sodium excreted in urine over a 24-hour period. Although this data was collected in China, it has never been comprehensively reviewed. Our latest review, published in the Journal of the American Heart Association, aimed to plug this knowledge gap. Searching both English and Chinese-language databases for all studies ever published that reported 24-hour urinary excretion of either sodium or potassium in China, we found 70 with sodium data (drawn from 26,767 participants), of which 59 also reported potassium data (drawn from 24,738 participants). The data covered four decades and most provinces of China. Of all the reviews of salt intake in China, our review is the first to be systematic and is by far the largest. High salt and low potassium intakes Our meta-analysis of the combined data revealed important patterns in salt and potassium consumption in China. We found, for example, that on average children and adolescents exceed the salt-intake limit set for adults. The World Health Organisation (WHO) recommends adults consume less than 5g of salt per day, and this upper limit should be reduced for children and adolescents according to their energy requirements. In China, however, children aged three to six, on average, consume 5g of salt per day. The WHO recommendation was far exceeded by children and adolescents aged six to 16 years. Their intake averaged a worrying 8.7g per day. In adults, the average salt intake was 10.9g per day, which is more than twice the maximum recommendation set by the WHO and one of the highest salt intakes in the world. Our review also showed geographical differences between northern and southern China. Salt intake in northern China has declined over the past four decades, which may be the result of the government’s efforts to increase salt awareness and of improvements in the year-round availability of fresh produce. Yet, despite this decline, the average salt intake in northern Chinese adults remains high, at 11.2g per day. In contrast, salt intake in southern China has increased during that same period, which could be due to increased consumption of processed, restaurant and takeaway foods, which are typically high in salt. Finally, we also found that potassium intake was less than half the recommendation. Potassium intake has been consistently low throughout China for the past 40 years, with people in all age groups consuming less than half the recommended minimum intakes. Improving matters With a fifth of the world’s population living in China, reducing salt and increasing potassium intakes across the country would be of enormous benefit for global health. Here is how to achieve this: Replace regular salt with potassium salt. Unlike in Western countries, where most of the salt comes from processed foods, most salt consumed in China comes from the salt added while cooking. Potassium salt can be used the same way as regular salt and would have the added benefit of increasing people’s potassium intake. Start early in life. Childhood and adolescence are when dietary habits and taste preferences are formed. If a child eats more salt, they will develop the taste for salt and are more likely to eat more salt as an adult. Also, high blood pressure in childhood tracks into adulthood. Anticipate new sources of salt intake. There is a rapid increase in the consumption of processed foods and of food from street markets, restaurants and fast-food chains in China. Setting maximum targets for their salt content would create a level playing field where salt is reduced across the board, which would help guide the population in getting used to a less salty …

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16 July 2019Interview with Leena Johns on Workplace Culture

Why should employers look to create a positive workplace culture? We sat down with Dr Leena Johns, Head of Health & Wellness at MAXIS Global Benefits Network, to discuss the, often unseen, impact of workplace culture on the productivity and health of employees. Global Benefits Vision: What do you mean when you talk about workplace culture? Dr. Leena Johns: We think of culture as the personality of a business covering everything from leadership style, the behaviours and attitudes of management, to the traditions and beliefs of the company. It plays into small things that you wouldn’t think about like the clothes people wear, the hours they work and can even guide the way colleagues talk to each other. GBV: Why is workplace culture so important? LJ: Workplace culture is extremely powerful. Whether or not people are aware of it, it impacts everything from the performance and productivity of the workforce, through to the health of every employee. Culture is an important tool for recruitment and retention, too. A poor culture often means employees are not happy and will start looking for a new job, resulting in high churn. Constant turnover of staff is expensive for organisations as recruiting high-quality replacements costs money. Plus if you factor in training and the productivity lag of training up a new starter, the expense can spiral quickly. We conducted a survey in 2019 with 1,000 employees around the world and found that 82% of employees consider the culture of an organisation before accepting a job, so a positive culture is a vital recruitment tool. GBV: What impacts workplace culture? LJ: Some of the factors that impact workplace culture are visible, like the clothes people wear or the physical office they are working in. Yet, some are less immediately obvious, like how people interact with each other and whether the environment is hierarchical or collaborative. All of these factors are important, but it’s often the less visible ones that have a greater impact on the overall culture. Experience of workplace discrimination can have an incredibly serious and negative impact on an employee’s experience at work, their ability to do their job and even their health. Discrimination is often linked to a decline in mental and physical wellbeing and higher rates of depression. GBV: How does culture impact an employee on a daily basis? LJ: One way the culture is apparent in an employee’s daily life is in the hours they work. The culture of a workplace and attitude of an employer (and specifically its leadership) can have a significant impact on whether employees feel they must work beyond their contracted hours or not. Some employers view their staff spending extra time at work as a positive and productive behaviour and as a result, employees feel they have to work late. Other employers recognise it can just be presenteeism, or people staying at work just to look good, and will actively discourage it. Some evidence suggests that working additional hours unnecessarily can lead to stress and increased staff turnover. Our survey found that most office-based employees globally work around 20 hours beyond their contracted hours each month because they have a company culture where they feel they should be seen at their desk. This was found in many different countries around the world including the UK, the UAE, Mexico, India, South Africa and the USA. GBV: Why is this a problem? LJ: Well, although you may think a culture that encourages employees to work later may boost productivity – longer hours surely means more work right – it is often an illusion and actually costs companies money as a result of increased stress, illness and absenteeism. Absenteeism alone costs organisations an average of US$41bn annually in Australia, Canada, United Kingdom and USA. GBV: Does workplace culture actually affect health? LJ: In a simple word, yes it does. The World Health Organization considers the workplace a big enough factor in global health that it has campaigned on improving it for more than a decade. Stress is one of the most significant health issues generated from the workplace and can lead to immune system vulnerability as it causes the pituitary gland to emit adrenocorticotropic hormone (ACTH), a hormone that stimulates the adrenal gland into releasing cortisol, which hampers disease fighting cells. Stress can also lead to an increased risk of heart attack as employees with low job control (a person's ability to influence what happens in their work environment and specifically their job) can have an exaggerated fibrinogen response – a tendency to form clots more easily. These are serious health concerns and ones which can certainly be exacerbated by a poor company culture. Stress also often leads to other unhealthy behaviours like smoking, drinking and overeating, all of which can increase health risks for employees and, in turn, negatively impact healthcare costs for employers. GBV: What about the bottom line? LJ: Poor health, affected by a negative company culture, can have a significant impact on cost for employers. Jeffrey Pfeffer mentioned in his book how high job demands alone generate US$46bn in annual excess healthcare costs. The good news for employers is that small steps can make a big difference to costs. A study in the Journal of Occupational and Environmental Medicine found that improving the health of their employees and decreasing annual healthcare costs by as little as 1%, generated significant savings for employers in the U.S.. A positive culture also tends to foster a creative and entrepreneurial environment in the workplace, which can help increase revenue. The Post-It Note was famously invented due to 3M’s 15% culture, which encouraged employees to set aside 15% of their work time to proactively pursue ideas that excited them. Google, meanwhile, started its own 20%-time scheme, which resulted in the creations of Gmail, Google Earth and Google Talk. It’s definitely worth employers investing time in nurturing a positive and innovative culture. GBV: What can employers do to improve culture? LJ: There are a lot of things employers can do. An HR department has an important role to play in creating and enforcing anti-bullying policies, a vital tool in guarding against negative workplace relationships. Employers should encourage a culture which allows employees to form positive relationships at work. This could be anything from a formal mentor/mentee programme, to team-building and organised activities, to simple steps like encouraging employees to feel able to chat with each other during their workday. Strong social support from peers has a real beneficial impact on health, helping not only to relieve job strain and stress but also increase job satisfaction. There’s lots of evidence that social connectedness at work, alongside a high overall sense of social wellbeing, promotes better business outcomes and is a key differentiator of successful work groups. GBV: Can workplace culture be changed? Yes, it can, but it is one of the most challenging projects a management team will ever face. The logical first step is for management teams to know what their culture currently is so they know what to change. One way to go about finding out about your current culture is an employee survey, which can then be tracked as the cultural transformation takes place to see how successful it is. Other aspects of the workplace employers should consider are autonomy and flexibility. Establishing autonomous work teams moves being held accountable from a negative emotion to a positive one, where employees embrace accountability and manage their responsibilities within a timeframe that works for them. Other tactics for improving culture include investing in training, encouraging healthy lifestyles, positively reinforcing behaviour, encouraging volunteering and investing in the office environment. The best organisations recognise that they need to take a holistic approach to workplace culture and understand how it affects people. When an organisation’s culture is aligned with its goals, people are hired who share the values and have enthusiasm for the organisation. Creating a culture that empowers people to pursue their passion allows employers to pave the way to financial success and build an outstanding …

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16 July 2019Long Hours Increase Chances of A Stroke

Libby Sander Australia is in the bottom third of OECD countries when it comes to working long hours, with 13% of us clocking up 50 hours or more a week in paid work. These long hours are bad for our health. A new study from France has found that regularly working long days of ten hours or more increases our risk of having a stroke. Other research has found that employees who work long work hours are likely to have poorer mental health and lower-quality sleep. Long working hours have also been shown to increase likelihood of smoking, excessive drinking, and weight gain. Long hours are bad for our health The effects of regular long work hours on our health are wide-ranging. The new French study of more than 143 ,000 participants found those who worked ten or more hours a day for at least 50 days per year had a 29% greater risk of stroke. The association showed no difference between men and women, but was stronger in white-collar workers under 50 years of age. Another meta-analysis of more than 600,000 people, published in the British medical journal The Lancet, found similar effects. Employees working long hours (40-55 hours per week) have a higher risk of stroke compared with those working standard working hours (35-40 hours per week). Irregular work hours, or shift work, has also been associated with a range of negative health and well-being outcomes, including the disruption of our circadian rhythm, sleep, accident rates, mental health, and the risk of having a heart attack. And it’s not just the physical effects. Regularly working long hours results in poor work-life balance, leading to lower job satisfaction and performance, as well as lower satisfaction with life and relationships. Why are we working more? Although many countries have imposed statutory limits on the work week, worldwide around 22% of workers are working more than 48 hours a week. In Japan, long work hours are such a significant issue that karoshi – translated as “death by overwork” – is a legally recognised cause of death. Concerns around automation, slow wage growth, and increasing underemployment are some of the reasons Australians are working longer. A 2018 study showed Australians worked around 3.2 billion hours in unpaid overtime. And work doesn’t end for many people when they leave the office. If they aren’t doing extra work at home, taking calls, or attending after-hours meetings online, working second jobs is increasingly becoming the norm. Many Australians now work additional jobs through the gig economy. The influence of job control Autonomy and “decision latitude” at work – that is, the level of control over how and when you perform your duties – is a contributing factor to the increased risk of health problems. Low levels of decision latitude, as well as shift work, are associated with a greater risk of heart attacks and strokes. Individual control plays a significant role in human behaviour; the extent to which we believe we can control our environment considerably impacts our perceptions of and reactions to that environment. Early psychology research, for example, showed that reactions to the administration of an electric shock were very much influenced by the perception of control the person had over the stimulus (even if they did not actually have control). These findings were echoed in data from the Australian Institute of Health and Welfare. It found that a lack of alignment between an individual’s preferences and their actual working hours resulted in lower reported levels of satisfaction and mental health. The results applied both to workers who worked long hours and to those who wanted more hours. What can employers do? Effective communication with employees is important. Employees may be unable to complete their work in standard hours, for example, as a result of having to spend excessive amounts of time in meetings. Employers can take steps to implement policies to ensure that long work isn’t occurring regularly. The Australia Institute holds an annual Go Home on Time Day to encourage employees to achieve work-life balance. While this initiative raises awareness of work hours, going home on time should be the norm rather than the exception. Increasing employees’ input into their work schedule and hours can have positive effects on performance and well-being. The design of the workplace to promote well-being is an important factor. Research on shift work has shown that enhancing the workplace by providing food, child care, health care, accessible transport, and recreational facilities can reduce the effects of shift work. Finally, implementing flexible work practices, where employees have some control over their schedule, to encourage work-life balance has been shown to have positive effects on well-being. Such initiatives require ongoing support. Japan instituted Premium Friday, encouraging employees to go home at 3pm once a month. Initial results, however, showed that only 3.7% of employees took up the initiative. The low take-up can be attributed to a cultural norm of lengthy work days, and a collectivist mindset where employees worry about inconveniencing peers when they take time off. Given the rise in concerns about future work, and workplace cultures where long hours are the norm, change may be slow in coming about, despite the negative health effects of long work …

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16 July 2019Protecting Employees on The Move

Andrew Wood In our previous article* we saw how the growth and geographical expansion of multinationals is leading to increasing international mobility, and new challenges for the HR function. Now we’ll look at the issues surrounding a specific area of benefit provision – group life and disability cover – and discuss the range of solutions available. Multinationals continue to seek competitive advantage, diversity and access to new talent through geographical expansion. In fact, PwC estimates the global footprint of multinational organisations has grown from an average of 13 locations, at the turn of the century, to a projected 33 by 2020. It’s no surprise that international assignee numbers are matching that rate of growth. According to Finaccord’s Global Multinational and Corporate Transferees market report, this trend looks set to continue, with professional services and manufacturing sectors leading the way in terms of producing the most corporate transferees, followed by the energy, financial, and technology sectors. International mobility and the evolution of insurance benefits practice As businesses have matured and established subsidiaries overseas, centrally managed benefits, established by head office for their expatriate population (often on global employment contracts), are no longer the norm. Increasing reluctance to fund traditional expatriate packages and the autonomy of the subsidiary to set their own local benefits policies have led to a more fragmented approach to employee benefits – especially group life and disability benefits. The expat assignment has traditionally been formulaic in nature, with an employee accepting a role, packing up their household goods and moving their family to a new location for a fixed period of time, usually between three and five years. In recent years, however, there has been a shift in how both businesses and employees view international assignments, which has led to a broader range of international assignment types. Shorter-term ‘international assignees,’ who are often on six-to 12-month contracts supporting project work and covering a short-term need for expertise that is not available in the overseas local unit. Rotators and commuters, who commute regularly across borders to the employer location for weeks or months at a time and could be classed as a frequent traveler. Localisation, where the employee makes a cross-border move and is then either immediately, or gradually, transitioned to permanent local status. Local ‘plus,’ where employees work under a local package, with some limited expatriate benefits. Regionalisation, where the traditional ‘head office’ home-country expatriate is supplemented with regional expatriates from many locations forming part of this mobile workforce (so-called ‘third-country nationals’). Different approaches to life and disability benefits How are multinationals currently providing life and disability benefits for these different types of employee? The table below, taken from the Mercer Benefits survey for internationally mobile employees, shows the percentage of respondents that offer life benefits, and the type of plan offered for each assignment type. As you would expect, life benefits are offered to all categories of internationally mobile employee. Long-term assignees are the category for which the highest proportion of companies provide this type of benefit, followed by global nomads, employees on rotational assignments, and short-term assignees. Most companies provide these benefits through a fully insured contract. Life benefits In terms of the type of life plan most typically offered, we can see there are a mix of approaches, nevertheless, allowing assignees to stay in the home-country plan seems to be the preference. International plans are a popular choice for the global nomad population, with an equal number of companies (44%) offering an international plan and home-country plan for this assignee type. The trend is then to localise benefits, with home-country plans being the most population option for internationally hired foreigners (54%), one-way transfers (79%) and localised assignees (77%). Disability benefits and accidental death and dismemberment benefits As shown in the table above, disability benefit plans are offered to long-term assignees, global nomads, short-term assignees and employees on rotational assignments. The typical approach for accidental death and dismemberment cover for these assignee groups is to offer a home-country plan, with a smaller percentage of companies offering a host-country plan. More than three quarters of respondents provide disability benefits through a fully insured contract. The trend is to then localise benefits, with home-country plans being the most popular option for locally hired foreigners (45%), internationally hired foreigners (37%), one-way transfers (52%), and localised assignees (50%). Employees employed directly by the subsidiary will be on local payroll and will benefit from local social security provision (if it exists). Benefits will be in place for these employees based on the local mandatory requirements; these may be supplemented with additional benefits/covers that allow an employer to compete for talented resource in that marketplace. The subsidiary will also be taking into account the tax regime in that country and benefit provision is often geared to maximise tax breaks or relief. For example, the UK has favourable tax treatment for registered group life and excepted group life arrangements. The global nomad – a career expatriate who moves from country to country, is away from his or her home country for the long term, and who doesn’t fit into either a home, local, or local plus benefits approach – presents a particular challenge; it’s interesting to see that only 20% of companies offer special expatriate arrangements to global nomads. Within the oil and gas and extractive industries these employees are often on a fixed-term contract for the duration of a project. They tend to remain in situ for three to five years until project completion, before taking up a new project assignment in another country. These may be either full-time employees or skilled employees brought in on fixed-term contracts for the duration of the project; but even then, many of these skilled employees remain loyal to one firm and work on a succession of contracts. In the hotel industry senior management teams will move periodically from hotel to hotel across a country, region, or the globe. It is often not practical to establish local insurance cover for these employees, particularly when they may be on a benefits package different to the one provided to local employees. These are just simple examples, however, the challenge for the HR professional managing these employees is to ensure that the insurance benefit programmes provide both consistency of cover for all employees, and the flexibility to cover international placements and movement. As we saw, the Mercer study shows that international plans are a popular solution for the truly internationally mobile, global nomad population, with 44% of companies offering international life plans for this assignee type. An international plan is often the most pragmatic solution for covering a mobile workforce that is employed on overseas payroll, and which doesn’t naturally fit into large domestic insurance arrangements. International plans are flexible and can accommodate a range of benefit designs. Benefits can also be provided under a single worldwide plan, under consistent policy terms and central management, helping to reduce costs and simplify administration. An international plan also looks to be a popular solution for employees on rotational assignments, most likely for the same reasons. A strong employee benefits package will always be a key differentiator when it comes to recruitment and retention; and it seems that benefit managers are responding to the challenges of increasing global mobility, increasing assignment types, and cost pressures by offering different types of plan. It’s clear from the table that the adage of ‘one size fits all’ no longer applies. What drives HR decision-making for a life and disability plan? Contract certainty – employers expect the policy they purchase to provide certainty of coverage. It is especially important that when employees move locations, or travel extensively, there is no gap in insurance cover. Claims payments in locations desired – employers expect to understand where and how claims will be managed and paid. Premium payments from locations – many employers, based on how they are organised, want to re-charge costs of insurance and need to have transparency. There is often a tipping point between the advantages of a single international placement – that is, flexibility, simplicity, single plan design, level of coverage, benefit levels, and operational efficiency – and the advantages available to a domestic placement with domestic benefit design including tax treatment of premiums and benefits, currency matching, local language, and local servicing. In some circumstances international plans may not benefit from premium relief, and where there are some elements of cross-border coverage, withholding taxes or insurance premium taxes may be applied. With increasing globalisation and a more mobile population, it is vital for employers and insurers to have a clearly defined approach for dealing with ever-increasing workforce mobility. Every jurisdiction presents different regulatory requirements that need to be taken into consideration when arranging coverage for their most important asset, their employees. In an increasingly complex world, yesterday’s employee benefits solutions may not meet the challenges of tomorrow, and finding the right approach for the future requires partners with industry experience and …

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16 July 2019The UK Group Risk Market in 2018

Paul Avis Every year in April the two most important surveys for the Group Risk industry come out: Swiss Re’s ‘Group Watch’ shows how the Group Risk market is performing which informs insurers; while the GRID claims statistics survey shows how the Group Risk industry is performing from an adviser, employer and employee perspective. The market in 2018 covered 12,866,621 people, an increase of 3.3% from 12,458,147 in 2017 and is worth more than £2,338,212,809 in annual premiums (a 5.7% increase on last year’s figures). Disappointingly however, there are only 76,906 schemes in place, and with some employers having up to five different group risk schemes, increasing the number of new-to-market organisational customers is clearly still the biggest market challenge. Current Market The largest area of group protection coverage by premiums is employers and employees; where there are 55,618 schemes covering 9,810,549 employees. This Group Life Assurance (GLA) covers three different types of policy. With 99.7% of all claims being paid, Group Life is also the area which has the highest claims acceptance rate − as in most cases claims assessments are incredibly easy. The default, most common approach to starting benefits by organisations is a ‘Registered’ Group Life ‘lump sum benefit’ policy and so this is the single largest market. Scheme volumes for these policies grew by 3.8% in 2018, with an additional 1,000 Registered schemes established covering 8,566,288 people. However, with only 44,770 employers having this benefit, and with 1.4 million organisations that employ people in the UK, only 3% of potential customer organisations have purchased Registered Group Life Assurance. Additionally, the number of new schemes applying for Registered status with HMRC has dropped by 23% in 2018/19 compared with 2017/18. Since 2012/13 there has been a reported decrease of 88% in the number of applications. Whilst this is mainly due to the fact that Automatic Enrolment Pensions registration has forced employers to register in previous years, augmentations such as Master Trusts, avoiding direct registration, and a reduction in Registered Group Life schemes could also be contributing factors. Group Life Market Under Trust – In the Group Life world, the real story is the growth in ‘Excepted’ lump sum death benefit schemes which currently do not need registration. Excepted schemes are now being used routinely and could also be a contributing factor to fewer Registered scheme registrations (alongside the bigger impacts mentioned earlier). Excepted schemes traditionally have been more specialist schemes that focused on high earners, often with complex tax positions, but as the Lifetime Allowance reduced from £1.8m to £1m (and in 2019/20 is now £1.055m), long servers, as well as better paid employees, have used Excepted schemes to avoid exceeding the pensions Lifetime Allowance limit on death. It is estimated that 1.25m people could be affected by the Lifetime Allowance and 290,000 already are. Whilst I fully respect the quality of financial, tax and legal advice in this space, I doubt that the near 1 million people covered by Excepted schemes have included all of the 290,000 currently affected yet, let alone protecting those employees that will be affected by the Lifetime Allowance in the future, as many employers are adopting Excepted schemes for all employees. Importantly, it is estimated that 134,000 people have opted to protect their pensions Lifetime Allowance entitlement, and so, these have traditionally been the core audience for Excepted schemes. Clearly there is a need for more pensions protection to be put in place to capture the 290,000 people not who are already over their Lifetime Allowance. More interestingly, since 2006, 12,000 people have lost this protection and whilst, again, the vast majority of these will be down to Automatic Enrolment pensions’ administration errors, pension’s protection loss can also happen when submitting data for a Registered Group Life scheme. Something not to worry about when providing an Excepted scheme for all employees, rather