The group risk market – including both intermediaries and insurers – must engage more with consumers and the workplace if it is to grow in the long term, Swiss Re has warned.
That is one of the key recommendations made by the reinsurer as it published its annual snapshot of the size and growth potential of company insurances including death benefits, income protection (IP) and critical illness (CI).
Swiss Re said that the group risk market grew in 2008, with modest increases in death benefits and IP sales and more impressive growth in CI business during the year.
However, the Group Watch 2009 report – widely accepted as the official benchmarking tool for the group risk sector – concedes that concerns and uncertainty over regulation remain. It also describes the outlook for some areas of the group risk market as gloomy.
Overall in-force premiums across all three types of business have risen by 3.1% to £1.64bn, compared with £1.59bn at the end of 2007.
In-force market premiums for group death benefits totalled £945.2m in 2008, an increase of 3.8% compared with 2007. For group IP cover, in-force market premiums totalled £648.9m, up 1.2% over 2007, while in-force annual benefits increased by 4.7%. Expectations for market growth are “pessimistic”, Swiss Re said.
However, in-force premiums for CI totalled £45.4m in 2008, up 22% compared with 2007. Growth in 2009 and beyond is expected to depend heavily on new business written via flexible benefits packages, Swiss Re said.
Looking ahead, Swiss Re said that GRiD (Group Risk Development), the industry body made up of insurers and intermediaries, must continue to become more visible if it is to “spread the message” to a wider audience.
“More specifically, it will be important to work closely with other initiatives such as the Financial Services Authority’s work on financial capability and its Moneymadeclear consumer website which, probably as a consequence of its very low profile, barely recognises the existence of group risk products,” the reinsurer said.
Swiss Re also said that as the popularity of flex increases, the protection industry must engage better with employees.