A National Employment Savings Trust (NEST)-type scheme to tackle labour market inactivity is possible but complex, according to Ron Wheatcroft, technical manager, life and health UK and Ireland at Swiss Re.
Ahead of publishing his findings from the Keep Britain Working Review, in October the review’s author Sir Charlie Mayfield challenged insurance providers to develop risk pooling for SMEs to enable their employees to gain access to affordable health and wellbeing benefits. This challenge would subsequently feature in the final findings published in November.
Major opportunity
Swiss Re’s 2025 Group Watch report, published yesterday, which identified the review as a major opportunity for the sector, contained data revealing that while 90% of schemes cover 249 lives or less, 60% of in-force premiums come from larger schemes.
Complex but possible
Asked specifically by Health & Protection about the possibility of a NEST-type scheme aimed at employees at SMEs mirroring the success of auto enrolment for pensions, Wheatcroft (pictured) maintained such a scheme was possible, but complex.
“As to whether there would be scope for a NEST-type scheme, probably,” Wheatcroft said.
“My gut reaction to that is that NEST is relatively easy in that it’s a pension plan, so money gets put into a pension pot and it’s that person’s money.
“With things like disability, you do have to consider other criteria such as should schemes be underwritten and can you do business on a non-underwritten basis and what does that mean in terms of pricing which is a very big question.
“And would you end up with schemes that are uninsurable and if so, who’s going to take that risk?”
Big questions
Wheatcroft maintained there are some very big questions in there to answer.
“I’m sure Sir Charlie has been pulling out lots of ideas and I’m sure they will be testing some of these in the vanguard phase,” he concluded.