Group Risk & the Broader Landscape

Katharine MoxhamSpokesperson, GRiD

Protect Association Meeting20 November 2015

2

WHAT IS GROUP RISK?

Umbrella name for 3 Employer sponsored

benefits- Group Life Assurance

- Group Income Protection- Group Critical Illness

Often insured

Gives employees access to financial

protection

Fewer medical details &

“Once and Done”

underwriting

Highly valued but relatively inexpensive

Free or reduced cost to end user

Can cease at 65/SPA

Usually compulsory but can also facilitate

access to protection cover through

voluntary, flex and affinity schemes

3

FINANCIAL LIFE LINE • Provides a benefit on employee’s death - tax free lump sum up to LTA/taxable dependants’ pension • Benefits in excess of LTA through “excepted” route

GL• Provides a continuing income during employee’s illness or injury – paid through payroll in normal way• Used to cover employer’s promise of long term sick pay

GIP

• Pays a tax free lump sum to employee on diagnosis of one of a defined list of serious medical conditions or on undergoing one of a defined list of surgical procedures

GCI

4

BACK TO BASICS

WHAT ARE EMPLOYERS TRYING TO ACHIEVE

THROUGH THEIR PACKAGE?

EMPLOYER HIERARCHY OF NEEDS

Business Continuity

Risk Management

Attract and Retain

Productivity

StaffMorale

6

WHAT’S IN IT FOR EMPLOYERS?• Low cost paternalism• Hygiene factor• No IHT or probate – can deliver quickly to familyGL• Low cost paternalism• Risk management tool• Known costs for budgeting• Third party assessments• Vocational rehabilitation• Focus shift to health & wellbeing

GIP

• Low cost paternalism• Well perceived flex benefit• Can supplement sick pay• Can supplement PMI – say for cancer drugs

GCI

7

WHAT ELSE CAN

COME WITH IT?

Employee Assistance Programme

HR/legal advice

Second medical opinion

Fast access to CBT &

physiotherapy

Absence/case management,occupational rehabilitation

Bereavement counselling/

probate advice

GP helpline/online health

assessments

And more...

8

THESE SERVICES CAN BE USED DAILY

EVEN IF A CLAIM IS NEVER MADE

£97,936£22,940 pa

£61,005

Cancer

The main cause of claim under all three group risk products last year

(GRiD)

£1.26bnWorth of claims paid in 2014 (GRiD)

£3.45 million a day!11,204,8

52 People insured under group risk

arrangements in 2014 (Swiss Re) Average group life, group income protection and group critical illness

claim values last year (GRiD)

9

1,529

70%Of employers think group life costs

more than it does (GRiD 2015 Employer Research)

Only 15%

Of employers are prepared to pay for treatments recommended by new Fit

for Work Service (GRiD 2015 Employer Research)

50%Of employers say they use added value group risk services (GRiD

2015 Employer Research) People helped back to work last year

with some sort of active early intervention support from an insurer

during deferred period (GRiD)10

11

THE BROADER LANDSCAPE

12

EMPLOYER SPONSORED GROUP RISK PROTECTION

Deficit ReductionIncreased

Productivity7 Day NHS

Ageing Workforce

Welfare Reform

ReducedEconomic Wastage

Health & Wellbeing

Mental health crisis

Fit for Work Service

Simple Financial Products

DoH Responsibility Deal/Workplace

Wellbeing Charter

Potential for public/private partnership?

13

KEY INFLUENCER

ACTIONS

ABI (supported

by CESI Research)

Dame Carol Black’s independent review

Drug and alcohol addiction, and obesity: effects on employment

outcomes

Treasury/ABI/GRiD Simple Financial

Products

The Work Foundation Health at

Work Policy UnitInvesting in a workforce fit

for the future Challenges for the UK

government

Money Advice Service/ABI

#LiveLifeProtectItcampaign

14

WHAT MIGHT BE NEXT?

NUDGE

Lifetime Allowance

parallels with IHT?

Bring Group Life out of pensions legislative framework?

Taking out income protection should always pay – in the same way

that “work should always pay”

Delink Group Income Protection from State Benefits?

Un-stall Simple Income Replacement?

Privatised sick pay?Government interest in the role of

Income Protection through the workplace

How can Government incentivise employers to engage with the

workforce health agenda?

15