Group income protection (GIP) and private medical insurance (PMI) address slightly different needs and both have an important role to play in improving workplace wellbeing.
This is according to Ron Wheatcroft, technical manager of Swiss Re and co-author of Swiss Re’s Group Watch report 2025.
Wheatcroft was addressing a question Health & Protection asked about the prospects for firms increasingly ditching GIP to order to retain the the immediate benefit to the workforce provided by group PMI, after advisers alerted to the title to this trend.
Looking for cost savings
In an initial presentation on the findings of this year’s report, Wheatcroft said it was clear that employers will be looking for cost savings and group risk may be one of the areas they will look at.
But he added: “This is why I mention private medical insurance because in addition to all of the other costs, they are struggling to meet the costs of private medical insurance.
“Some of the things being looked at are where they can make savings elsewhere to allow for that.
“There doesn’t seem to be the pressure on PMI costs from the responses we got, but perhaps there will be on some of the group risk benefits.
“But overall, there was quite a positive tone that actually the market has seen these things before and is quite resilient.”
Worries about the NHS
But Wheatcroft maintained that this year’s report also indicated worries about the performance of the NHS.
“We think this reflects the wider environment that people are really worried about the NHS, and there’s so much publicity about the NHS and that’s definitely one of the drivers.”
And Wheatcroft added he thought there was room for both group PMI and GIP.
“Personally, I think there’s room for both and of course a number of EBCs will offer both as part of the package – some do, some don’t,” Wheatcroft continued.
“As to where it goes, I do wonder if there will be a point at which PMI pricing does create more of a challenge for people – we just have to wait and see where that goes.
“But I do think there is balance across the whole suite between PMI cover – which is more immediate, people see the benefit quicker – and the long term disability benefit which of course sits quite comfortably with government’s aspirations of getting people back to work and sick pay with all of the support that comes with long term claimants.”
Slightly different needs
Wheatcroft pointed out that the two types of cover meet “slightly different” needs.
“The challenge is how are you going to manage two priorities within a budget which is not going to be increasing as fast as you might wish it to be,” Wheatcroft added.
“So it is a difficult one and certainly something that we have seen.
“This year a couple of people said in questionnaires that they had evidence that an employer client had cancelled their long term disability income scheme.”