Analysis of the total payments made by the Group Risk industry shows that a total of £1.4bn was paid out during 2015, over a 10 percent increase on 2014.
This helped a total of 24,603 UK families avoid financial difficulty, according to industry data compiled by Group Risk Development (GRiD). Group Risk Development (GRiD) encourages awareness and uptake of corporate group protection benefits – income protection, group life insurance and critical illness cover – on behalf of its members which include insurers, reinsurers and intermediary businesses.
The claims stats, which also reveal the breakdown of benefits paid out by product (Group Life, Group Income Protection and Group Critical Illness), show an increase in all benefits paid out. Group Life policies paid out an increase of £130.1m, Group Income Protection policies paid out an increase of £9m and Group Critical Illness policies paid out an increase of £5.9m.
For Group Income Protection, as well as the claims paid, there are a material number of cases each year where people are helped back to work before a claim becomes payable, often with the support of the insurer, the employer or both. GRiD has captured details of the cases where the insurer supported a return to work with some sort of active early intervention (such as fast-track access to counselling or physiotherapy) before that person was eligible for a monetary payment and 1,878 people were able to go back to work during 2015 because of that intervention. This figure demonstrates the effectiveness of early intervention and highlights the hugely added value of Group Risk products over and above the purely financial. We often see the most positive outcomes when all parties work together - the employee, the employer, adviser and insurer. (This figure does not capture those additional cases where people who hadbeen claiming then returned to work.)
This year’s claims data again demonstrates the extent to which the Group Risk industry benefits families and workers across Britain – as well as wider society, as the payments and support help to avoid financial distress and can reduce the welfare spend. For the first time, the average claim amount for Group Life has gone over £100k, with the average claim at £111,055.
The main cause of claim across all three products was cancer – unchanged from last year with the highest for Group Critical Illness (69%), followed by Group Life (47%) and Group Income Protection (24%).
Employer-sponsored group risk financial protection cover is cost effective, and basic level Group Life cover can be provided for around 0.5% of payroll, while a more comprehensive package – including Group Life and Group Income Protection benefits – typically costs less than 2% of payroll.
For further information please contact John Kerr at Kerr Henderson