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The UK Group Risk industry paid out a record £2.49bn in claims in 2023: £6.82m a day

by | May 21, 2024

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·       50.5% who had a period of sick leave starting in 2023, returned to work by the end of 2023 following support from group risk insurers.

·       Cancer: Main cause of claim across all group risk products.

Industry data compiled by Group Risk Development (GRiD) shows that, once again, employers highly utilised group risk protection (employer-funded life assurance, income protection and critical illness benefits) to provide financial support to employees and their families in 2023. A total of £2.49bn was paid out by the group risk industry during 2023, an increase of £278.4m compared to 2022.

 
 

Return to work:

In addition to a financial payment, one of the most valuable benefits of group risk is the support it can provide in helping employees stay in or return to work, and this hit record numbers in 2023. 50.5% of employees who had a period of prolonged sick leave starting in 2023 had returned to work by the end of the year following support from group risk, which includes active early interventions (such as fast-track access to counselling, physiotherapy and other treatment provided by the insurer) access to specialists in serious illness, vocational rehabilitation, mediation and more.  

During 2023, 6,299 people who had a period of sick leave starting in 2023, were helped to return to work by the end of 2023. Of these:

 

·       4,691 employees were able to go back to work before a claim was made following interventions provided by the insurer.

·       1,608 employees went on to claim a group income protection (GIP) benefit during 2023 but had returned to work by the end of that year.

·       7,305 interventions were made within six months of someone’s first absence by group risk insurers during 2023.  Of these, 47% had help to overcome mental illness and 10% had support overcoming a musculoskeletal condition.

 
 

·       Over 8,000 people in total were helped by interventions made by group risk insurers during 2023.

In addition, 885 employees who became a new GIP claimant during 2022 had returned to work by the end of 2023.

The huge amount of embedded support within group risk products means all employees can benefit, whether or not a claim is made. Such support is continually enhanced to respond to changing needs, such as providing access to virtual GPs. This year, GRiD has gathered more comprehensive data on usage rates.  In total, during 2023 employees had over 440,000 interactions with this extra support, provided by group risk insurers, demonstrating that employees are increasingly utilising group risk’s embedded support and deriving value from their employer’s purchase on a daily basis.

 

Katharine Moxham, spokesperson for GRiD said: “The record numbers of long-term sick is an issue for the UK, and these figures show how group risk  contributes to a solution: employers who offer group risk benefits to their workforce have real and practical help in keeping their employees in work, and helping those who are absent to return. Recent figures from Swiss Re’s Group Watch show that group risk benefits are increasing in popularity, and our results show why: the more employers who offer group risk, the more help UK plc has to tackle this issue.”

Total benefits paid across group risk products:

§  Group life assurance policies paid out total benefits to the value of £1.69bn:an increase of £160.9m over 2022.

 
 

§  Group income protection (GIP) policies paid out a total of £633.6m:an increase of £85.7m over 2022.

§  Group critical illness policies paid out benefits totalling £160.3m:an increase of £31.8m over 2022. 

The average new claim amounts (£137,448 for group life; £27,206 p.a. for group income protection; £77,743 for group critical illness) demonstrate that these benefits are not perks for the higher paid but throw a vital financial lifeline to people of every salary, age, and position. 

 
BenefitNo. of claimsValue of claims paidAverage new claim amount% of new claims paid for 2023
Group Life Assurance          12,324             £1,693,915,080            £137,448 99.9%
Group Income Protection*          17,634                £633,596,686          £27,206pa** 74.5%
Group Critical Illness            2,062                £160,306,990              £77,743 79.4%
Total          32,020             £2,487,818,756   

Main causes of claim:

Cancer was the main cause of claim across all three products during 2023. Covid-19 only accounted for 0.5% of group life assurance claims.

BenefitMain cause of new claims%Second main cause of new claims %
Group Life AssuranceCancer39%Ischaemic Heart Disease15%
Group Income ProtectionCancer24%Mental illness21%
Group Critical IllnessCancer68%Heart Attack9%

Moxham continued: “It’s no secret that financial resilience in the UK is poor and the death, serious illness or long-term incapacity of a breadwinner can have a devastating effect on a household’s finances, often tipping people into poverty. In real terms, State provision for the sick and disabled has been becoming harder to get and dwindling for some time: it’s not enough to live on, and those who have to rely on it are the ones who can least afford to. Some employers boost the payments by self-funding, which is expensive. Those employers who make use of group risk benefits have the most affordable way of supporting staff and their families when the worst happens.”

 
 

Total number of claims paid (new and existing) during 2023 and value of claims in payment as of 31 December 2023, including any claims paid for part of 2023. Group income protection claims are often paid for several or many years so the ultimate value of these benefits will be much higher.

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