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2023 another record year for group risk market – Swiss Re

by | Apr 16, 2024

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The UK group risk market saw another record year of growth in 2023, according to Swiss Re’s annual Group Watch report published today.

The level of insured individuals and benefits increased across all three product lines – death benefits, long-term disability income and critical illness, the study has found. The number of in-force policies increased by 4,420, (87,376 to 91,796), while the number of people insured hit 15,314, 655 – a 6.2% increase year-on-year.

This growth breaks down as follows (see notes to editors for important information on death benefit and critical illness figures):


·        Death benefits: The number of members covered under lump sum death benefit schemes increased by 579,083 (5.5%), taking the number of people covered to 11,083,680.Insured benefits under lump sum death benefit schemes increased by 12.9%, taking total insured benefits to £1,781,573,066,000. The rapid decline in dependants’ death in service pension continued with a decrease of 41.1% in in-force members. There are now just 1,314 policies in force covering 74,403 members (239,592 members at the end of 2019).

·        Long-term disability income (LTDI): The number of members covered under LTDI schemes increased by 201,377 (6.6%), taking the total number of people covered to 3,255,185. Insured benefits under LTDI schemes increased by 12.5%, taking total insured benefits to £124,887,714,627pa. More than 90% of all in-force LTDI policies cover fewer than 250 members, a typical benchmark for an SME.

·        Critical illness cover: The number of members insured in critical illness schemes increased by 164,817 (22.4%), taking the number of people covered to 901,387. Insured benefits under critical illness schemes increased by 14.2%, taking total insured benefits to £64,283,622,000.


In another year of high inflation in the UK, the average benefit per member for LTDI increased by 5.5% and the average lump sum death benefit increased by 7.0%. The average in-force sum assured for critical illness fell by 6.7% from £76,433 to £71,316. This was in part as one additional product provider shared data where the average sum assured was lower.

Ron Wheatcroft, joint author of the report, said: “In the face of increasing costs for death and disability benefits, it’s extremely encouraging to see the value employers put on the provision of risk benefits to attract, retain and support their workforces.

“It was particularly pleasing to see a further 201,377 members of LTDI policies in 2023, on the basis that workplace LTDI policies not only pay a proportion of pre-disability earnings, but also bring the additional benefits to help people to remain in or return to work as and when they are able.”


But despite clear progress, Wheatcroft says more must be done to help employers. This means widening the health narrative to include the important role vocational rehabilitation plays in supporting workers and ensuring the tax system treats occupational health and vocational rehabilitation services consistently.

“This year we’ve seen calls from product providers and employee benefits consultants for the Government to reconsider the tax treatment of contributions made by members to extend LTDI benefits provided by their employer. For the second year running, the percentage of schemes offering this facility has reduced, with the double taxation of premiums and benefits a barrier to what could otherwise be greater personal resilience.”          

Wheatcroft also highlighted that excepted group life policy numbers and membership are growing much faster than registered pension arrangements.


“The trend towards using excepted group life policies (EGLPs) will continue given the potential tax liability for benefits above the limit now known as the lump sum and death benefit allowance.

“We estimate that the cost of administering and assessing the potential periodic tax liability on discretionary trusts now stands at approximately £4m each year. This tax appears to be related more to investment gains and we hope to see this potential liability abolished on all trusts holding pure protection policies, and to simplify the administration further by abolishing the requirement for a common benefit formula to apply to all members.”

Group Watch 2024 is based on data provided by product providers within the group risk sector. Insights were gleaned from a collective of 44 individuals, comprising 18 professionals from product providers and 26 experts from employee benefit consulting firms.


Commenting on Swiss Re’s Group Watch 2024, Katharine Moxham, spokesperson for GRiD said:

“It’s so pleasing to see Swiss Re reporting group risk market figures that are up by every measure.

“It’s excellent news that in 2023, the number of people covered by the industry increased by 893,268, making group risk benefits some of the most popular employee benefits offered by companies. The number of employees insured under group risk policies (15.3m) now exceeds half the payrolled population1 which is a step-change in itself given the steady increase in employment to higher than pre-pandemic levels.


“It also demonstrates that employers increasingly see the value of what we do as an industry – not just in terms of financial protection for when the worst happens but also the extra support services we make available to employers and employees alike.

“Interestingly, the report also highlighted the topic of the language the industry uses to explain and promote group risk, with calls for this to be made clearer. It’s therefore key for communications around group risk benefits to be simplified so that people who work outside the industry can relate to the value of what they have in place, and it’s an area where the industry and employers need to work together.”

With Canada Life retaining its’ number one market position, Dan Crook, interim MD for Group Protection at Canada Life comments on the report:


“The data shows the group market is in good health, with record numbers of lives now insured, reaching over 15 million people for the first time. This is a very positive story, especially in the context of the long NHS wait times and wider pressures in the public health system.

“At the point of need, our moment of truth, the group protection market continues to deliver significant positive impacts to individuals and their families. Whether that is measured through the prompt payment of claims, or the wider accessibility to additional benefits which add value to the employee proposition for employers.

“We remain focussed on supporting the overall health and wellness of millions of employees and their wider families through the support offered. We are committed to ensuring our propositions are relevant and meet the ever-changing needs of our customers.

“Looking at the Canada Life performance, it is great to see we continue to lead the market with the highest number of policies written. We’ve seen a boost in the number of critical illness policies we’ve sold, while for the sixth year running, we’ve written the highest number of new income protection schemes.

“I’d like to thank employers and their advisers for continuing to place their trust in us.”

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