More than 11.5m people were members of group risk schemes at the end of 2015, according to research by Swiss Re.
Its Group watch 2016 report, which is based on data from all insurers operating in the group risk market, also found that the number of people covered under group risk arrangements was almost 31,000 higher in 2015 than in 2014, representing an increase of almost 3%.
The research also found:
- In-force group risk insurance premiums totalled more than £2bn last year.
- Death benefits, including the capitalised value of widows’ and dependents’ death-in-service pensions, increased by more than 5% in 2015.
- Death-in-service pension benefits declined by 14% in 2015, and premiums fell by almost 9%.
- Excepted group life benefits grew by almost 31%, and premiums increased by 20%.
- In-force long-term disability income benefits grew by more than 4%, and premiums increased by more than 2% in 2015.
- The number of people insured under long-term disability income schemes increased by more than 1% last year.
- The number of people covered by critical illness schemes increased by 15% in 2015.
- In-force critical illness sums assured grew by more than 11% in 2015, and premiums grew by more than 17%.
Ron Wheatcroft (pictured), technical manager at Swiss Re, said: “The stand-out number this year is the increase in the number of people covered in excepted group life schemes by over 30%. This was not unexpected, given reductions in the pension lifetime allowance.
“Group critical illness cover continues to do well with scheme and member numbers increasing. Our biggest challenge is to grow the long-term disability income market where there should be a very relevant role for the group risk market.
“There is no better time for the group risk market to work with others to develop products and services which meet the needs of employers and employees, and bring together state and private coverage into a model which dovetails together.”
Katharine Moxham, spokesperson for industry body Group Risk Development (Grid), added: “No matter what salary is at stake, it’s important everyone has a way to safeguard their family’s financial stability [because] the unexpected death or disability of a breadwinner can often mean financial disaster for a family. Nevertheless, it’s particularly encouraging to see that almost 2.3m more people have this vital financial protection through the workplace than 10 years ago, an increase of almost 25%.
“It’s important to emphasise that employers continue to play an important role in facilitating affordable financial protection cover that will not only support employees and their families, but will make a huge difference to morale, staff retention and productivity, key business benefits.”