Over 300,000 more people became members of group risk schemes in 2015, bringing the number of people covered to more than 11.5m, with strong increases in excepted group life cover and critical illness, according to Swiss Re’s Group Watch report published today.
The report shows that group risk insurance premiums have for the first time exceeded £2bn, death benefits, including the capital value of widows’ and dependents’ death in service pensions (DISP), increased by 5.2 per cent, registered group life lump sum benefit sums assured growing by 6.1 per cent and excepted group life lump sum death benefit sums assured growing by 30.9 per cent.
DISP benefits fell by 14.1 per cent, while in-force long-term disability income benefits grew by 4.2.
In-force critical illness sums assured increased by 11.4 per cent.
Swiss Re technical manager and report author Ron Wheatcroft says: “The stand out number this year is the increase in the number of people covered in excepted group life schemes by over 30 per cent. This was not unexpected, given reductions in the pension lifetime allowance.
“Group critical illness cover continues to do well with scheme and member numbers increasing. Our biggest challenge is to grow the long-term disability income market where there should be a very relevant role for the group risk market. There is no better time for the group risk market to work with others to develop products and services which meet the needs of employers and employees, and bring together State and private coverage into a model which dovetails together.”
Swiss Re UK & Ireland CEO Frank O’Neill, says: “Overall, the growth witnessed in 2015 is pleasing. Group risk covers play an important role in covering employees and their families. However, although 40 per cent of all insured death benefits and 80 per cent of insured long-term disability income cover are arranged through employer schemes, we still have a lot more work to do in closing the protection gap in the UK.”