Firing line  

‘Our ability to deal with mental illness is a long way behind’

Increasing protection cover take-up

As awareness has grown over the years about the benefits of protection cover, so has its take-up. 

Swiss Re says the number of employees insured under group-risk policies sponsored by their employers increased by 3.3 per cent in 2018. But Mr O’Donnell says this is still not enough, particularly in the SME space.

Unum’s products in the UK are more prevalent with large employers than in the SME sector, an issue the insurer is trying to address. Mr O’Donnell says where larger employers might typically insure only around 10 per cent of their employees, because the products are perceived as expensive, with smaller employers they tend to insure all of their employees.

However, the take-up of Unum’s products with smaller businesses is only about 3-4 per cent. When Unum asked smaller businesses why they were not buying its products, it found that cost was the number one obstacle. It is also low on their list of priorities and they feel it is too long a commitment to be tied into.

Another complaint from small businesses was they felt they were never going to use the product, because the chances of making a claim would be low. 

Last year, Unum launched an employee-paid offering called Benni, which allows businesses to provide staff with direct access to a range of employee benefits alongside existing employer-paid options. It is also available as a standalone product.

The insurer has also launched an app called Help@Hand, which gives employees access to a range of services including a remote GP service and mental health support.

Unum is one of the biggest insurers in the group protection space, and one of its closest rivals is Canada Life. Other insurers vying for market share include AIG, Aviva and Legal & General. And most, if not all, are becoming more holistic in their approach to mental health as well as other needs.

“We would love new entrants. [Mental health] is greenfield and the more people in there, the more it helps the market,” Mr O’Donnell says.

“Group protection has been growing by about 3 per cent, but that is small. That is because [the market] needs to get more relevant. That is why we are doing things like opening up new types of distribution and looking at employee-paid products.”

He adds: “Brokers remain critically important to us. We are also talking to some other partners, like pension companies that have gone into the SME market. That’s an opportunity to get some cross-selling going.”

Ima Jackson-Obot is deputy features editor at FTAdviser and Financial Adviser