The number of people covered by group risk policies through their employer rose 5.9% year-on-year, according to Swiss Re’s Group Watch report.
The reinsurer’s annual report showed the number of people insured rose from 13,317,249 at the end of 2020 to 14,106,854 at the end of 2021 – outpacing the 1.1% growth recorded over the preceding year.
In-force group risk policies also rose 4.1% to the end of 2021, increased from 81,055 in 2020 to 84,369.
And the value of in-force premiums increased 9.1% to almost £2.9bn, up from £2.64bn the previous year.
The growth breaks down as follows:
- Death benefits:The number of people insured increased from 9,883,621 to 10,505,939, up 6.3%. The number of in-force death benefit policies increased by 3.7% and insured death benefits increased by 5.9%. Within these numbers, membership of non-pension excepted group life policies increased by 42.2%. Registered Group Life Policy membership increased by 0.9%.
- Long-term disability income (LTDI): There was a 4.6% increase in the number of people insured to 2,903,611 – up by 128,347 people. The number of in-force LTDI policies increased by 4.3%, in-force benefit amounts by 6% and premiums by 8.6%.
- Critical illness cover (CI): The number of people insured increased by 5.9%, from 658,364 to 697,304. The number of in-force CI policies increased by 8.2% and in-force sums assured increased by 10.4%.
Ron Wheatcroft, technical manager for life and health UKI at Swiss Re, and one of the joint-authors of the report, (pictured) said: “These are very encouraging numbers given that, for much of 2021, there were few signs of the certainty that employers and insurers craved.
“The data show more positive market performance with increased coverage across all three policy lines.
“Above all they reflect a mood of confidence that the market has raised its game over the past two years – and also one of optimism that it is well-placed to show its value in future.”
Value added services boom
The report also picked up on greater usage of services, primarily driven by employee assistance programmes (EAPs) and the growth in services offering virtual GPs.
Commenting on this theme, Wheatcroft added: “The level of engagement with support services this year is particularly pleasing, especially the take-up and usage of EAPs.
“This goes to show that these products are no longer viewed merely as nice-to-have add-ons, but rather as core features within a much wider proposition which employees genuinely value.
“While the UK appears to be better placed in managing the impact of the pandemic, the effect of long Covid on our health systems, the private health sector, employers and employees remains uncertain and there is always the possibility of further variants. We also cannot ignore the fact the economy is frail with rising inflation and a growing cost of living crisis.
But Wheatcroft added that while the numbers contained in the report were positive, more needed to be done to support businesses large and small in accessing the market and adapting to the new normal.
“With just 84,369 policies in force at the end of 2021, it needs both the effort from our industry as well as government’s support to make product models more simple as businesses struggle against economic headwinds,” Wheatcroft said.
“Particularly given the complexity that the freezing of the Lifetime Allowance until 2026 adds for group life cover, we persist in calling for an exemption from entry, periodic and exit charges for trusts holding as a sole asset all pure protection policies including excepted group life and relevant life policies.”