General Insurance Article - Positive growth for the group risk market in 2021


The UK group risk market continued to show positive growth last year, proving resilient in the face of sustained economic and market uncertainty, according to Swiss Re’s annual Group Watch report.

 The report shows that the number of in-force group risk policies increased by 4.1% from 81,055 in 2020 to 84,369 in 2021. Moreover, the number of people insured rose from 13,317,249 by the end of 2020 to 14,106,854 by the end of 2021 – a 5.9% rise that significantly outstrips the 1.1% growth of the preceding year.

 The growth breaks down as follows:

 • Death benefits: 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): the number of in-force LTDI policies increased by 4.3%, the number of people insured by 4.6%, in-force benefit amounts by 6.0% and premiums by 8.6%.
 • Critical illness cover (CI): the number of in-force CI policies increased by 8.2% and in-force sums assured increased by 10.4%.

 Ron Wheatcroft, Technical Manager, L&H UKI, at Swiss Re and one of the joint-authors of Group Watch 2022, 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 (death benefits, long-term disability income and critical illness).

 “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.”

 One notable theme from the report is the greater usage of services, primarily driven by employee assistance programmes (EAPs) and the enormous growth in services offering virtual GPs.

 Group Watch 2022 draws not only on extensive market data, but also engagement with individuals at both Employee Benefit Consultants (EBCs) (20 people) and product providers (17). Many respondents referred to this increase, with employers showing keenness to promote these benefits and take more time to understand how they work, as well as their importance as part of a well-rounded proposition.

 “The level of engagement with support services this year is particularly pleasing, especially the take-up and usage of EAPs,” Wheatcroft said. “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.”

 Wheatcroft added: "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.”

 With this in mind, Wheatcroft says that, while the numbers displayed in Group Watch 2022 are positive, more needs to be done to support businesses large and small in accessing the market and adapting to the “new normal”.

 He concluded: “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. 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.”

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