The UK group risk market grew last year despite economic and market volatility, according to Swiss Re’s annual Group Watch study published today.
The number of in-force group risk policies climbed by 4.1 per cent from 81,055 in 2020 to 84,369 in 2021, according to the report. Furthermore, the number of people insured increased from 13,317,249 at the end of 2020 to 14,106,854 at the end of 2021, a 5.9 per cent increase over the previous year’s 1.1 per cent increase.
Insured death benefits climbed by 5.9 per cent, while the number of in-force death benefit policies increased by 3.7 per cent. Non-pension Excepted Group Life Policy enrolment climbed by 42.2 per cent among these figures. The number of people who have signed up for a Registered Group Life Policy has climbed by 0.9 per cent.
In-force LTDI policies climbed by 4.3 per cent, while the number of people covered increased by 4.6 per cent, in-force benefit amounts increased by 6.0 per cent, and premiums increased by 8.6 per cent.
The number of active CI policies climbed by 8.2 per cent, while in-force sums assured increased by 10.4 per cent.
The research highlights the increased use of services, which is primarily driven by employee assistance programmes (EAPs) and the massive expansion of services that provide virtual GPs.
Group Watch 2022 is based on substantial market data as well as individual contact with 20 Employee Benefit Consultants (EBCs) and 17 product providers. Many respondents mentioned this rise, with employers eager to market these perks and spend more time learning how they function, as well as their significance as part of a well-rounded package.
Swiss Re technical manager Ron Wheatcroft says: “These are very encouraging numbers given that, for much of 2021, there were few signs of the certainty that employers and insurers craved. The data show more positive market performance with increased coverage across all three policy lines (death benefits, long-term disability income and critical illness).
“Above all, they reflect a mood of confidence that the market has raised its game over the past two years – and also one of optimism that it is well-placed to show its value in future.
“The level of engagement with support services this year is particularly pleasing, especially the take-up and usage of EAPs. This goes to show that these products are no longer viewed merely as ‘nice-to-have’ add-ons, but rather as core features within a much wider proposition which employees genuinely value.”
Wheatcroft adds: “While the UK appears to be better placed in managing the impact of the pandemic, the effect of long Covid on our health systems, the private health sector, employers and employees remains uncertain and there is always the possibility of further variants. We also cannot ignore the fact the economy is frail with rising inflation and a growing cost of living crisis.
“With just 84,369 policies in force at the end of 2021, it needs both the effort from our industry as well as Government’s support to make product models more simple as businesses struggle against economic headwinds. Particularly given the complexity that the freezing of the Lifetime Allowance until 2026 adds for group life cover, we persist in calling for an exemption from entry, periodic and exit charges for trusts holding as a sole asset all pure protection policies including excepted group life and relevant life policies.”
Grid spokesperson Katharine Moxham says: “No other employee benefits have provided a vital financial lifeline for so many people throughout the pandemic in the way that Group Risk benefits (employer-sponsored life assurance, income protection and critical illness) have done. The statistics from the Swiss Re’s Group Watch 2022 report show that employers and employees alike are placing a far greater value on them than ever before. It’s really positive to see more employers of all sizes offering such worthwhile and valued benefits to staff, and especially good to see such an increase in the number of small and micro-SMEs offering them.
“The pandemic has shone a light on what’s most important to us all. Group risk benefits aren’t instant gratification benefits, they provide long-term support. And this increase in the number of employers offering them to staff is extremely positive for the group risk industry as a whole, which has worked so hard throughout the Covid-19 pandemic to provide value and support. These benefits provide financial and practical support to employees and their families at the worst of times, and the growth demonstrates how much employers value providing this vital safety net for their people.”
Canada Life protection sales director Dan Crook says: “We’re delighted to see that our industry has, once again , achieved strong growth as employers and employees recognise the value of group protection policies. We’re particularly pleased to see a growing number of SMEs protecting their workforces and indeed the increased popularity of providing employees with choice, through flexible benefits. The primary purpose of our products are to help people at their time of need and our industry should again be proud of the financial support we have provided to employees and their families over the last 12 months.
“Beyond the financial support through the payment of claims, our industry has offered increased access to value added benefits. These services have been well utilised and have therefore supported the physical, financial and mental wellbeing of many thousands of employees and their families. Within our own WeCare virtual offering, we know that the most common services required are a virtual GP appointment, mental health support and a second medical opinion, all helping to relieve some of the strain on the NHS. Our aligned goal is to grow this market and ensure more lives are covered throughout 2022 and the years ahead. Our industry matters and I’m grateful to all that support it.”