The UK group risk market has increased by 3.5 per cent to around 16.2 million as employers respond to cost control pressures and changes in benefit design.
This is according to the Swiss Re Group Watch 2026 report, which found that figures are up from around 15.6 million the previous year, an increase of roughly 550,000–600,000 people.
Swiss Re reports that employers are adapting by scaling back benefit design rather than withdrawing protection. Group income protection shows a 1.6 per cent fall in total people covered, while on a like-for-like basis, coverage increases by 2.6 per cent.
However, employers are moving away from more generous terms, with fewer schemes offering cover to retirement and more opting for fixed periods of 2, 3 or 5 years.
The data also shows that growth is being driven by smaller employers, with over 90 per cent of schemes covering fewer than 250 employees. These schemes account for around 60 per cent of premiums, though larger schemes still dominate value.
The report includes references to private medical insurance (PMI), though it is less prominent than the previous year. Some providers highlight SME activity, while others point to cost pressures impacting the uptake of group critical illness.
There are also suggestions that PMI may play a greater role in employee benefits discussions due to healthcare access pressures.
Meanwhile, group death benefits continue steady growth, with around 12 million people now covered and increases of 5.5–6.5 per cent across lives covered, benefits and premiums.
According to Swiss Re, the market is continuing to grow, but with an increasing focus on cost and benefit design changes. Industry respondents expect modest near-term growth, with the Government’s “Keep Britain Working” review flagged as a major opportunity for the sector.
Swiss Re head of group risk UKI Keith Willians says: “While the market demonstrated resilience by continuing to grow in 2025, the headwinds created by the April National Insurance increases were undeniable. We saw a discernible change as employers were forced to pivot away from using benefits for talent attraction, focusing instead on cost control and productivity.
“It is a challenging environment for businesses, but the fact that the total number of people insured across the market still grew by 3.5 per cent demonstrates the underlying value that both employers and employees continue to place on group risk protection.”
Swiss Re technical manager UKI & MEA Ron Wheatcroft says: “The 2026 data show clear structural changes as employers navigate affordability constraints, most notably the increasing trend toward shorter benefit payment periods in long-term disability income cover and the growth in CI cover which is largely member-paid.
“We also saw a 27.3 per cent surge in the number of people covered by Excepted Group Life Policies. This sharp increase means the market cost for trustees assessing potential periodic tax liabilities on the trusts holding these policies is also rising, reinforcing our call for the Government to exempt trusts holding pure protection policies from tax.”
Wheatcroft added: “The ‘Keep Britain Working’ review represents a significant chance for the sector. It allows us to continue to reframe group risk primarily as workforce health infrastructure rather than just as insurance, highlighting the vital early intervention and vocational rehabilitation support we can provide to employers and workers as the work of the Review is taken forward to its next phases.”
