The Swiss Re Group is a major reinsurer in the group risk market in the UK. As such, their Group Watch 2015 report is a useful indicator as to the current state of play in the area of employer sponsored group life, group income protection, and group critical illness markets.
The headline numbers from the above report are impressive: 200,000 more people received life and disability cover arranged by their employer in 2014, which itself built on a further 300,000 new people in 2013. The report goes on to state that the numbers covered for these crucial protections has increased by some 1.25 million since the start of the decade.
This is welcome news. The UK working population is often very exposed to such protection risks — and in particular to the risk of income loss in the event of long term illness or disability. For the stark facts and reality of what such an absence from the workplace can mean for the family finances, please read a previous article of ours here.
Yet this apparent increase in cover should be seen in context. The UK population (and working population) continues to grow rapidly, so it’s likely that group income protection cover is only keeping pace with this growth, rather than actively extending to the many millions of employees who still do not benefit from such vital cover.
Gradually the group income protection industry is waking up to the need to seek political patronage to make this significant risk better understood by the working population, and also widen the cover to many more such families. The industry is currently considering the idea of auto-enrolment (similar to that used under pensions) to improve membership.
It will be interesting to see if any of the political parties mention this issue in their manifestos this year — but we certainly hope that this topic will feature more prominently at the 2020 election (if not before). In the meantime, we would encourage many more employers to look into the viability of offering this important benefit.