Paul Avis, the marketing director for Canada Life, said it was his ambition to get “auto-enrolment for income protection on any party manifesto”, adding that this would be the single biggest thing to get most people in Britain within some form of protection product.
He said: “If inertia is working for auto-enrolment into workplace pensions, why wouldn’t that same force work for protection through the workplace?”
Mr Avis said that introducing auto-enrolment for income protection could help alleviate the burden on firms to comply with the Equality Act and provide a business benefit, such as assisting with occupational and statutory sick pay.
He said such a move could help alleviate the burden on firms, together with meeting rising disability payments - roughly £28bn a year.
Mr Avis said: “Pensions and the welfare state is an Achilles’ heel for government. Welfare reform is proving challenging to implement and we know there has to be a pensions contribution increase at some point, but this would go down like a lead balloon with employers.
“However, if the government puts up employer contributions, but says that employers could choose to pay 0.5 to 1 per cent of that increase towards disability benefits, this could help make that message more palatable as AE group income protection clearly solves a business need.”
Mr Avis said this strategy could benefit small to medium-sized companies particularly, who are hit by changes including the April 2014 removal of the statutory sick pay percentage threshold scheme and delay and scaling back of the health and wellness service to April 2015.
Peter Le Beau, managing director of Le Beau Visage consultancy and co-founder of Protection Review, said: “I think it is vitally important that we look at a variety of ways to reach people who require income protection cover. It is a fundamental need and I hope that as auto- enrolment grows the opportunity to address income protection needs as a priority will expand significantly.”
An ABI spokesman said that while not advocating auto-enrolment for protection products, the ABI does recognise the potential role that the workplace could play in raising awareness of the role that various protection products can play in safeguarding family finances.
Andrew Oliver, co-director of Kent-based Andrew Oliver & Co, said: “I think Canada Life has got a point. Left to their own devices, people will not take out life cover or income protection. A form of soft-compulsion through the workplace is along the right track, although I do not know how it will get done, politically speaking.
“But then, if the government can do it for pensions, it can work for insurance.”
