The number of employees in the UK covered by group risk insurance grew by 200,000 in 2014, according to a study by Swiss Re.
Its Group watch 2015 report, which analysed and summarised group risk business results at the end of 2014, found that the overall UK group risk market grew by 7.9% in 2014.
The research also found:
- Since 2010, the number of workers insured under group risk schemes has grown by almost 1.25 million.
- There was an 8.9% growth in in-force death benefit premiums, 7.8% in critical illness premiums and 6% in long-term disability income premiums.
- Excepted group life premiums grew 27.9% and benefits by 29.4%.
- The number of people insured under long-term disability income protection through their employer increased by 1.9% in 2014.
- In-force premiums were up 6% to nearly £634 million, and there was a 0.4% decrease in the number of in-force schemes to 17,119.
- In 2014, almost 475,000 people were covered by critical illness insurance; an increase of more than 90,000. In-force premiums increased by 7.8% and sums assured by 15.2%. The number of in-force schemes increased by 7% to 2,840.
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Russell Higginbotham, chief executive officer of Swiss Re, UK and Ireland, said: “These are good figures for the group risk market but they hide the fact that this industry is at a crossroads.
“The welfare state cannot continue to fund at current levels and the next government will have to make cuts to the welfare budget. Insurers need to be ready to step up and adapt to that new reality. If we don’t, we may find existing models under threat in the same way that reforms have reconfigured pension provision.”
Ron Wheatcroft (pictured) author of the report and technical manager at Swiss Re, added: “The results show solid growth once again but we need to decide if we want to carry on as we have done for the past few years or offer something more ambitious.
“Auto-enrolment could be the way to increase coverage if we are unable to deliver growth to begin to fill the gap which will be left by declining state provision. Employees tell us that they would value greater workplace access to products and services but, somehow, this hasn’t translated to more coverage.”