Group risk on the rise

Employer paid group risk policies covered an impressive 12.5 million people in 2017, up 3.1% on the previous year. Group risk incorporates a range of employer-sponsored insurance products from life assurance (also known as death in service) and critical illness to income protection. They can provide employees with a vital financial lifeline at times of real financial and emotional difficulty.

The Association of British Insurers (ABI) figures showed a record £4.7bn in claims were paid to UK households in 2016, with almost all (97.3%) of protection claims paid out. Group risk products can have a significant impact in improving the financial resilience of individuals, households and businesses as well as reducing reliance on the welfare state and the NHS. See below for a breakdown of group risk claims paid[1].

Type of product

Number of claims paid 2016

Average value of claim paid

Critical Illness

15,464

£67,734

Life assurance

36,814

£75,062

Total Permanent Disability

531

£57,169

Whole of Life

85,860

£4,748

Income Protection

28,023

£17,818


Group Life Assurance in particular has seen increasing popularity with 86% of employers offering it as a core benefit for all staff. What’s also encouraging is that 21% of employers responding to research by Group Risk Development (GRiD) said that they viewed group risk benefits as a selling point during recruitment interviews and employee reviews. This demonstrates the rising profile of these benefits among employers.

Group risk products can represent great value for money in terms of recruitment and retention, being fairly low cost to offer and with high returns and great added value benefits for individuals. Many offer supplementary services such as return to work support or Employee Assistance Programme (EAP) features like counselling and debt advice. Such benefits demonstrate that the employer cares about the physical, mental and financial wellbeing of staff and are helpful at difficult times in employees’ lives.

 

 

[1] Protection insurers pay out £13m per day in claims, ABI press release, 5 May 2017

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