However there are things you can do around Group Risk provision to help your clients and potentially grow your business. These fall into two opportunities: to grow the market and to consult on existing schemes.
The chance is right in front of advisers for significant market growth. This comes in many forms but it is worth looking at a few simple ideas.
The single biggest opportunity is on the back of automatic enrolment (AE) pensions implementation.
Between now and 2018, the 1.8m employers going through staging provides advisers with many openings to win corporate clients.
These might be leads from other professionals such as accountants or requests from existing personal clients for assistance with their business. With every employer providing a pension, there is a need for a benefits differentiator.
Group Risk, specifically Group Life, is the perfect partner to AE and can be used both to increase revenue and to maintain a post-implementation relationship. A simple group Life product is proving to be popular as an initial starting point as it can be easily quoted for and administered online.
Another area for expansion is Group Income Protection (GIP). The questions to ask are: how aware are your clients of the level of State Benefits, how difficult are these benefits to obtain with the ‘any occupation’ definition of disability and do they understand the benefits that are initially paid to an absent employee will change over time as their personal situation changes?
So as an employee of an organisation, I would want to know how much income I would get if I were sick, who from, how I will be assessed and for how long I will be paid this benefit.
In the current, complex State Benefit world the specifically personalised nature of these benefits means that few, if any, employees have such clarity. At a basic level can anyone live on £3,801 a year? Could this fact shock most employers into action as they consider their own situation let alone their colleagues?
The other area of growth is to consider expanding some existing schemes which currently have restricted membership.
The use of pension scheme eligibility was historically popular but the introduction of AE now means that most, if not all, employees are pension scheme members. An ‘all employee’ scheme will usually have a lower average age and therefore lower unit rate i.e. a lower cost per £benefit but not necessarily a lower premium.
In addition, the expenses of pension scheme membership are higher as insurers could be selected against by people joining the pension to get the death or disability scheme benefits when they know they may need it. In addition, everyone has the extra workload and costs of medical underwriting late or discretionary entrants.