April 2025’s increases to employer national insurance contributions (NIC) have proven a key factor behind slower growth of the UK group risk market, according to reinsurer Swiss Re.
Notably, the number of people covered under group income protection (GIP) schemes dropped, and shorter cheaper plans became more desired by employers.
However, group life and group critical illness (CI) members did increase over the year.
The reinsurer’s Group Watch report 2026 found the number of in-force group risk policies increased by 1.4% to 96,006 in 2025, more muted than previous years.
The previous report found the overall number of in-force group risk policies increased by 3.2% from 91,739 in 2023 to 94,675 in 2024.
However, despite these pressures, the total number of people insured across the market still grew by 3.5%, reaching 16,204,721.
Total in-force premiums also increased by 2.0% from £3.60bn to £3.67bn compared with 5.8% growth in 2024.
Death benefits
Breaking the data down by product category, the number of people insured under group death benefit policies increased by 6.5% year-on-year, up to 11,987,781 from 11,440,262 in the previous year.
The report noted a major structural change continues within this space as while membership of excepted group life policies (EGLPs) soared by 27.3%, registered group life policy membership fell 1.8% following an increase of 2.1% in 2024.
This was attributed to a growing preference for simpler, non-pension arrangements, though the report warned that the surge in EGLPs will increase the market cost of trustees having to periodically assess any potential inheritance tax liabilities.
Group CI
Critical illness (CI) remained the fastest-growing product line, with the number of people insured increasing by 6.5% on a comparable basis, up to 888,040 from 839,872.
This growth was attributed largely to voluntary and flexible arrangements, alongside rising employee awareness of health risks and NHS pressures.
The report noted that one product provider entered the CI market in late 2024 and its data was included for 2025.
The number of people insured increased by 5.7%, up from a 4.0% gain in 2024.
Long-term disability income (LTDI)
However, when it came to LTDI, or group income protection, the number of people covered fell 1.6% to 3,328,869 from 3,382,366, although the number of policies increased by 2.6% year-on-year.
The report noted a market moving towards shorter maximum benefit payment periods as employers look to manage affordability.
Demonstrating resilience in affordability oncerns
Keith Williams, head of group risk UK and Ireland at Swiss Re, said: “While the market demonstrated resilience by continuing to grow in 2025, the headwinds created by the April National Insurance increases were undeniable.
“We saw a discernible change as employers were forced to pivot away from using benefits for talent attraction, focusing instead on cost control and productivity.
“It is a challenging environment for businesses, but the fact that the total number of people insured across the market still grew by 3.5% demonstrates the underlying value that both employers and employees continue to place on group risk protection.”
Ron Wheatcroft, technical manager, life and health UK and Ireland at Swiss Re, added: “The 2026 data show clear structural changes as employers navigate affordability constraints, most notably the increasing trend toward shorter benefit payment periods in long-term disability income cover and the growth in CI cover which is largely member-paid.
“We also saw a 27.3% surge in the number of people covered by excepted group life policies.
“This sharp increase means the market cost for trustees assessing potential periodic tax liabilities on the trusts holding these policies is also rising, reinforcing our call for the government to exempt trusts holding pure protection policies from tax.”
