The former presenter of A Place In the Sun Jonnie Irwin has been on a mission to raise awareness around the importance of people taking out critical illness (CI) cover.
But amid a cost of living crisis it is questionable whether individuals can afford what is seen as a relatively expensive benefit.
The good news is that there are signs that paternalistic employers are grasping the nettle as demand for group CI has increased – particularly in industries engaged in a war for talent.
But with group CI cancer claims on the rise along with wait times to see a GP, the role of the adviser in making the case for this benefit – and the difference it can make if the worst happens – has perhaps never been more important.
In May of this year Irwin, speaking in AIG Life’s first OneChat podcast, revealed his regret at not taking out CI cover following conversations with his financial adviser and a subsequent terminal cancer diagnosis as well as his mission to promote this cover.
Rising cancer claims
And it appears Irwin’s mission is needed as Rus Waygood, sales support consultant at Canada Life, reveals the insurer has seen a greater incidence of cancer claims across all products.
“It remains the number one claim cause for group CI,” Waygood says.
“Certain types of cancer are trending as stable, and some have increased from a claims incidence point of view.
“With current figures suggesting 950,000 adults of working age in the UK are living with cancer, and with Working with Cancer findings showing this is expected to increase to 1.15m by 2030, group CI can serve as a short-term cash solution for expenses related to cancer or other illnesses.”
Back in the summer of 2021, LV= highlighted that delayed diagnoses and treatments as a result of the NHS being swamped with the Covid pandemic meant it was likely there would be more deaths from cancer.
Increased demand for support services
But as James Walker, head of product and proposition at Legal & General Group Protection points out, the pandemic also made virtual GP services much more common.
“This benefit proved a Godsend for many during the pandemic and continues to add value due to its anytime, anywhere access nature,” Walker continues.
Walker highlights that additional benefits such as nurse support services are an important consideration for insured cancer patients.
“This can help employees manage both private and NHS care, offering practical, emotional support to help understand their diagnosis, medication and treatment,” he adds.
And Christine Husbands, commercial director at RedArc, tells Health & Protection her organisation sees first-hand, every day, the difference that nurse-led support makes to people dealing with the diagnosis of a critical illness.
“The impact is felt far and wide: physically, mentally, on dependants and colleagues,” Husbands says.
“As more people survive a critical illness, the support to help them deal with this on a practical level and emotional level, is as important as the financial support.
“Without doubt, the better this support is; personalised, holistic and long-term, the more valued the benefit will be.”
‘Niche’ product
But while the benefits of group CI are clear, it can still be seen as a “niche” product, according to David Williams, head of group risk at Towergate Health & Protection.
“It has real value and it would be great to see more organisations offer it, either as a company-paid benefit or as a voluntary benefit that employees can select,” Williams tells Health & Protection.
“The providers have recently boosted the cover with some great additional benefits and this, together with the fact that claims are paid so soon after diagnosis, really makes critical illness an ‘in the moment’ benefit that employees genuinely value.”
And it appears customers’ appetite for that ‘in the moment’ benefit is on the rise.
Katharine Moxham, spokesperson for group risk industry trade body Grid, points to Swiss Re’s Group Watch report which indicated a steady increase in group CI year-on-year in terms of policies in place and the people and amounts covered.
“Group CI remains a popular benefit choice, either in addition to income protection or as a means of offering some financial support to those suffering major health breakdown,” Moxham says.
“But much of the growth over recent years has been within a flexible benefits programme, where most or all of the benefit is funded by the employee.”
Demand increasing amid war for talent
Another explanation for the growth in demand for group CI is that companies are engaged in an ongoing intensifying war for talent, as Emma Thomson, head of protection development at Sesame Bankhall Group, explains.
“The employment market is currently challenging for many employers – these benefits are a key part of attracting new staff together with helping to retain staff,” Thomson continues.
“We saw the group CI market grow 11% in 2022 compared to 2021, according to the Swiss Re Group Watch Report, which is encouraging and will certainly be driven by extra demand from employers looking to enhance the overall remuneration and benefits of employees.”
Though according to Charlie Cousins, owner of Hooray Health & Protection, the cost of group CI is often too prohibitive for some customers, as it is often offered predominantly to directors and large corporates on a voluntary basis.
“From this, we believe the product then has a higher number of claims, ultimately hampering market growth,” Cousins adds.
“To maintain interest in group CI, we need to see insurers having more of a focus on reducing pricing and brokers focusing on growing the market for SMEs and opening things up for different organisations.”
Marketing makes the difference
While the cost of group CI cover continues to be a key consideration for companies amid a cost of living crisis, for Steve Ellis, associate director at Prosperis, it is how the product is marketed – particularly to SMEs – that will drive demand.
“SMEs are in a position where they need to work consultatively with their advisers and develop a strategy for their business,” Ellis says.
“Unfortunately this may become a challenge in the future as many intermediaries deal remotely with limited time to work in this manner.”
However, Karen Gittings, senior corporate benefits consultant at LEBC, notes insurers also have a key role to play in publishing more case studies.
Referencing Irwin’s appearance with AIG, Gittings says it was encouraging to see him tell his story about the punishing financial impact of dealing with cancer and encouraging people to learn by his mistake and take out CI before it’s too late.
“We definitely need to see more promotions like this from insurers.”
But despite the rising cost of living crisis, Jason Ellis, group protection sales director at Aviva, expects the market for group CI to continue to grow.
“The signs are there that the market will continue to grow and will continue to be resilient to current economic conditions, which is important when over two-thirds of the market (70%) is comprised of employees choosing to protect themselves through flexible benefit schemes,” Ellis explains.
“We’ll also be interested to see if the ABI’s Minimum Standards for CI provides an additional kick-start to the market in 2024.
“Continued pressure on the NHS and increased waiting times may also continue to drive interest and demand, as has been seen for private medical insurance (PMI) and protection more generally.”