John Ritchie, chief executive, Ellipse
Ellipse, which entered the group life and critical illness cover markets in 2009 and which intends to also enter the group income protection market later this year, expects its unusual single premium costing approach for all sizes of scheme to prove a major selling point as employers increasingly offer group risk benefits to employees who continue to work beyond State pension age.
Single premium costing involves applying age-specific rates to each member of a group risk scheme, the scheme premium simply being the aggregate of each member’s premium. Whilst other group risk insurers tend to use this for schemes with less than 20 members, for larger schemes they charge benefits for all members at a unit rate per £1,000 or £100 of cover.
“The audio-visual approach is best as we can get some of the best brains to share their thoughts”
John Ritchie, chief executive of Ellipse, says: “Although other insurers have typically treated employees aged over 65 as lying outside the unit rate they may not continue to do so if the numbers of these individuals increase, and this would skew the unit rate upwards to levels that may not accurately reflect the general age profile of the scheme.
“Using single premium costing is fairer because the cost for each member’s cover is based on the actual risk they present and, because our systems are designed to handle data automatically, it is no harder for us to single premium cost a scheme with thousands of members than one with just a handful.”