As Covid continues to impact employees to various degrees, group risk benefits will remain top of mind for employers and their employees in 2022. Industry experts predict employers and employees will increasingly see group risk benefits as a must-have, not only for the financial security they provide but also for the additional help and support services that come with them.
Looking ahead to 2022, experts predict demand for group risk will grow to help employers tackle the “Great Resignation,” as well as give employees support in the areas of mental health and wellbeing. More specifically, experts anticipate seeing an increase in occupational long-term disability income schemes, a reduction in long-term disability schemes, an uptake in excepted group life schemes and a growing SME market.
Swiss Re technical director Ron Wheatcroft says: “The pandemic has resulted in far greater employer awareness of the impact of long-term sickness within their workforce. As we are seeing, it is still far from over and the full impact of Omicron remains unknown. Given that many experts are predicting further variants, I expect this to be a big factor in shaping employer preferences when considering the benefits package which best suits their organisation.”
According to experts, next year, businesses will find that providing meaningful and flexible support including both financial and practical assistance will be critical for attracting and retaining employees.
Grid spokesperson Katharine Moxham says: “Group risk benefits will also be on the checklist for those seeking new employment, having reassessed what they’re looking for from an employer going forward. Businesses looking to survive the “Great Resignation” will find that offering meaningful support and flexibility will be key for attraction and retention going into 2022. Group risk benefits can help them with this, demonstrating that they are a caring organisation by giving access to invaluable financial and practical help.”
Group risk specialists think that the industry will address how it can become more engaging to SMEs and advisers working with SME businesses and small business owners to discuss the benefits of group protection.
Aviva group protection wellbeing manager Sophie Money says: “During 2021 advisers and clients said that this was the highest level of interest in group protection that they had seen among employers and employees. However, the missing piece is how to turn this interest into engagement so that we can help more employees and their families when they need us the most. The large corporates in the UK typically have some form of cover in place but penetration in the SME segment is below 10 per cent across the industry. Throughout 2022 I expect the industry to tackle how we become more engaging to SMEs, advisers working with SME businesses and small business owners to discuss the benefits of group protection.”
Experts have also highlighted the struggle employers may experience with determining how to best utilise added value benefits for their employees due to having multiple insurance providers and, as a result, duplicated healthcare services.
Money says: “Insurers have great offerings in place but employers can struggle with how to make the best use of added value benefits for their employees. This is because they often have multiple insurance providers and therefore duplicated wellbeing services. Employers often don’t know where to start. This is something we will be discussing with clients next year.
Money adds: “With employers increasingly focusing on wellbeing last year and recruiting wellbeing specialists into their business, at some point they will ask for evidence that such services provide tangible value. There are lots of ways of measuring this and each employer will be different e.g. looking at sickness absence levels, presenteeism levels, employee engagement, employee satisfaction, return to work from sickness absence, retention, length of service. I would expect to hear more demand for evidence around the services we and our competitors offer in this space to help them calculate ROI. It’s important that employers establish what they want to achieve through wellbeing and track outcomes to evidence effectiveness and identify where they can improve.”
In terms of specific schemes, experts foresee an increase in occupational long-term disability income schemes, a decrease in long-term disability schemes, and an increase in excepted group life schemes.
Wheatcroft says: “It’s been encouraging to see the number of employers insured in occupational long-term disability income schemes increasing year on year. I’d expect this to continue. Just a cautionary note though – National Insurance rises for employers coming in from April 2022 will add to pressures on costs. This might flow through into more schemes moving to provide limited-term benefits.
“There is likely to be a reduction in the number of long-term disability schemes which allow members to top up the benefit provided by their employer. Even with so much focus on the impact that disability has on workers and businesses, the industry is still waiting for promised guidance to clarify changes to the tax treatment of member premiums and benefits made two years ago.
“We may see an uptake in the use of excepted group life schemes in 2022 and beyond as the frozen lifetime allowance impacts more members. There seems little likelihood that the Government will exempt the trusts holding these policies from the relevant property trust regime as it has effectively closed down any changes to IHT following its response to the Office for Tax Simplification Review.”
