The outlook for group life insurance, or death-in-service benefit, in the UK is healthy, with new business premiums for the category set to exceed £175m ($264.6m) in 2018.
This is according to the report Group Risk Insurance in the UK – Key Trends and Opportunities to 2018, which is available at Timetric’s Insurance Intelligence Center (IIC).
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Protection providers and advisers believe pensions auto-enrolment in the UK may help grow the sector’s group risk market between 2014 and 2018, said the IIC report.
Auto-enrolment in the UK, which has been phased in from October 2012, requires all employers to enrol eligible employees into a workplace pension scheme and make contributions.
The reform provides opportunities for advisers to review their clients’ group risk arrangements, or start a conversation with employers about group protection.
An ageing workforce and high sickness absence rates are also expected to contribute to new business premium growth in the group risk insurance category.
Looking ahead, the IIC report said an improving economic outlook and rising life expectancy are expect¬ed to support growth in the group risk insurance category from 2014.
Employers are expected to continue to see additional benefits in group protection poli¬cies in terms of managing sickness absence and avoiding disability discrimination.
The report noted that as the government aims to reduce the sickness and disability benefits bill, providers and advisers are well positioned to extend the provision of group risk benefits in the workplace.
Timetric insurance analyst Laura Balkarova told Life Insurance International: "Group risk benefit schemes, such as group income protection, group critical illness and group life, are expected to become more relevant to employers as they aim to reduce sickness absence costs and improve staff retention. As pensions will no longer differentiate employers, they will need to consider flexible benefits to remain competitive."
