Growth within the UK group risk market slowed in 2024 against a challenging market backdrop, Swiss Re’s annual Group Watch report revealed.
The report showed that the number of in-force group risk policies increased by 3.2% from 91,739 in 2023 to 94,675 in 2024.
In addition, the number of people insured rose from 15,103,366 to 15,662,500, an increase of 3.7%.
The number of people insured under group death benefit policies increased by 3.6% (versus 3.9% in 2023).
Within these numbers, membership of Excepted Group Life Policies grew by 9.3%, while Registered Group Life Policy membership went up by 2.1%.
In addition, the report found that the number of members insured in critical illness schemes increased by 4% (versus 9.6% in 2023).
For voluntary and flex arrangements, growth sat at 5.3% (versus 6.5% in 2023).
The number of people insured by long-term disability income LTDI policies increased by 3.9% (versus 6.6% in 2023).
Keith Williams, head of group risk UKI, at Swiss Re and one of the joint-authors of Group Watch 2025, said: “The fact that all product lines were up in 2024 is hugely encouraging. However, following a bumper 2023, growth is most definitely slowing.
“This is partly a consequence of lower inflation driving reduced salary and, therefore, benefit increases.”
One notable theme from the report is employers more commonly insuring shorter benefit payment periods for Group long-term disability (GLTDI).
Ron Wheatcroft, technical manager, L&H UKI, at Swiss Re and one of the joint-authors of Group Watch 2025, said: “The trend towards shorter maximum benefit payment periods gives major cause for concern, considering the potential impact on the welfare state if an employee is unable to return to work before the end of a policy’s payment period.
“Not only this, as maximum benefit durations get shorter, employees face challenges in contributing to their employer’s scheme due to double taxation of benefits and premiums on voluntary schemes paid through salary sacrifice.”
He added: “With employer National Insurance (NI) and other costs going up, abolishing double taxation would go a long way to encouraging more LTDI benefit topping up by workers.
“In addition, it would be great to see tax charges being removed on all trusts where the sole asset is a pure protection policy.
“We estimate that the costs of administration for employers and trustees for Excepted Group Life policies are at least £4m plus additional legal costs.
“The tax generated is less than a quarter of that £4m.”
Katharine Moxham, spokesperson for GRiD, said: “It’s great to see that over half a million more employees are benefitting from group risk benefits (employer-sponsored life assurance, income protection and critical illness), and are now protected from the financial devastation that death, accident, illness or disability can bring.
“The all-round growth during 2024 demonstrates that employers increasingly recognise the value of group risk, not only for giving financial protection to their people for the worst kind of life events, but also for the support services provided to both employers and employees.
“It’s particularly pleasing to see so many SMEs offering group risk benefits to their staff, with over 90% of group risk benefits offered for groups of less than 250 employees.
“With the challenges that employers have faced, including absorbing costs from additional National Insurance contributions, increasing PMI premiums and other financial pressures, our industry needs to work with them to ensure that group risk protection benefits stay front of mind. The benefits punch above their weight, and provide a raft of help and support for health and wellbeing, as well as financial protection.”
