ProtectionApr 13 2017

Employers help 500,000 more staff get cover

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Employers help 500,000 more staff get cover

Insurance in the workplace has helped cover more than half a million more workers over the past year, the latest Swiss Re study has found.

The reinsurers' Group Watch 2017 revealed that group risk arrangements have grown over 2016, with 520,000 people now brought into their employer's group risk benefit.

As more employers receive education on the benefits of offering protection to their employees, and are advised on how to communicate this better to their employees, more people in the UK will be protected against financial loss through illness, death or disability as a result. 

Katharine Moxham, spokesperson for Group Risk Development (GRiD) said: "It's really positive to see continued growth for the group risk industry, especially in terms of the number of people who are protected through group risk arrangements.

"Everyone needs a way to safeguard their family's financial stability against the financial disaster that can often follow unexpected death or disability.

"Employers therefore continue to play an important role in facilitating affordable financial protection cover through the workplace."

It is the same old story for the group insurance market: more employees covered with more premiums but there are still significantly too few employers as customers. Tim Stoves

Swiss Re's report also showed many of these group income protection policies were not provided just by the UK's largest companies: 68 per cent of these policies had fewer than 50 members.

Ms Moxham said: "This figure either gives lie to the perception that smaller employers don't offer group income protection to their staff, or it indicates a raft of employers who may only offer group income protection to a select few at present - but who may be persuaded to extend this to a wider population.

"It will be telling to watch how this potential for growth develops over the next 12 months."

The study also found a significant upward trend for death benefits, long-term disability income and critical illness cover, suggesting that more Britons are becoming aware of the importance of protecting themselves and their loved ones.

Total In-force premiums at end of year (in GBP millions)

Product TypeDeath benefitsLong-term disability incomeCritical Illness
20121 05556360
20131 14959867
20141 25063473
20151 29664885
20161 33068295

Tim Stoves, managing director for Canada Life Group Insurance, said this positive upturn did not mean the industry could rest on its laurels.

He commented: "We are under no illusions that our marketplace still faces a significant challenge. Our products are clearly fit for purpose as almost 520,000 additional people are now covered and this positive growth additionally increases industry premiums.

"But with around 2.4m UK employers of a size where they could purchase our benefits, why is it that under 73,000 schemes are in place across our three product areas?

"In such an under-penetrated market, with products valued by customers, it is the same old story for the group insurance market: more employees covered with more premiums but there are still significantly too few employers as customers.

"We are working in partnership with like-minded advisers in an effort to grow the number of employers joining our market."

Last year, the Department for Work and Pensions/Department of Health issued a Green Paper called Improving Lives Work, Health and Disability.

The Green Paper highlighted the fact the state cannot continue to afford to provide the sort of benefits it has been doing so in the past. It outlined important role that insurers and corporate advisers could play in encouraging more employers to offer affordable, appropriate group income protection cover to their employees.

Find out more

FTAdviser's Guide to Income Protection features a section on how to advise on group income protection insurance. The guide itself qualifies for 60 minutes' worth of structured CPD through the Chartered Insurance Institute.

simoney.kyriakou@ft.com