Data Shows Demand For Employee Benefits Schemes is Rising

It’s interesting to gauge the total cost of the pandemic and insurers need to be aware that this process will continue as research studies gradually reveal the serious side effects of the vaccines and lockdowns long term, which are as yet unknown.

Beyond the headlines of `With Covid’ deaths, there have been many other tragic deaths from suicide, delayed medical treatments or operations, ruined businesses, plus a huge impact on mental health across the world. Here’s some related reading from Collective Benefits on freelancers healthcare demand, and Zurich’s data on EAP pandemic support calls, which were up by 50% last year.

This data is from GRiD and shows the value of employee benefits schemes right now, and most likely in the future too;

Industry data compiled and published by Group Risk Development (GRiD) shows that once again, employers utilised group risk protection to provide financial support to a huge number of employees and their families during 2021. A total of £2.22bn was paid out by the group risk industry during 2021, an increase of £208.4 million on 2020 figures.

Group risk insurers have helped people in many practical ways as well as making financial payments. In total 6,113 employees were helped back to work after a period of sick leave and there were 220,886 interactions during 2021 with additional help and support services funded by group risk insurers.

Katharine Moxham, spokesperson for GRiD said: “The statistics categorically show that group risk benefits (employer-sponsored life assurance, income protection and critical illness) really are some of the most valued benefits that employers can offer: financially, practically and emotionally.”

Total benefits paid

Group life assurance policies paid out total benefits to the value of £1.57 billion (an increase of £198.47 million on 2020 figures); group income protection policies paid out a total of £546.1 million (a decrease of £4.72 million compared with 2020); group critical illness policies paid out benefits totalling £106.3 million (an increase of £14.7 million on 2020 figures).

The average new claim amounts (£116,414 for group life; £28,977 p.a. for group income protection; £73,089 for group critical illness) evidence the fact that these benefits should not just be seen as perks for the higher paid, as they throw a vital financial lifeline to all people regardless of their salary, age or position.

Return to work

For group income protection, as well as the claims paid, there are a material number of cases each year where employees are helped back to work both before and after 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 active early intervention (such as fast-track access to counselling or physiotherapy, funded by the insurer) before that employee was eligible for a monetary payment. 4,395 people (45.3% of all claims submitted, up by 13.5% compared to 2020) were able to go back to work during 2021 because of such early intervention (of which, 54% had help to overcome mental illness and 10% had support overcoming a musculoskeletal condition).

GRiD has again captured details of cases to demonstrate that once a claim is in payment, help and support back to work is still given and employees are not forgotten. Of the new group income protection claims that went into payment during 2020, 1,718 people were helped by the insurer to make a full return to work by the end of 2021.

Moxham continued: “The figures show the extent of the holistic support offered via group risk benefits: in the event of death, serious illness, prevention, early intervention and rehabilitation. It’s no wonder that an increasing number of employers are offering these to their workforces, and not just among large corporates, but SME and micro-SMEs too.”

Help and support

As well as paying claims and helping employees back to work, group risk insurers give access to everyday services that can be used to help and support a workforce on a day-to-day basis. This is via a number of ways, including:

• An associated Employee Assistance Programme
• Facilitating a second medical opinion
• Fast-track access to counselling, physiotherapy or other treatment
• Liaison and mediation
• Bereavement support and help with probate
• Access to healthcare apps and virtual GPs

In total, there were 220,886 interactions during 2021 with the additional help and support services that are funded by group risk insurers, giving daily value to employers regardless of whether or not a claim was made under their policy. Of these interactions, 39% involved access to counselling and 11% were related to illness and 4% to legal issues.

Main causes of claim

Cancer was the main cause of claim across all three group risk products during 2021.

COVID-19

COVID-19 was the third most common cause of claim on group life assurance (11.7%). GRiD reported earlier this year on COVID-related claims: the average lump sum death benefit payment for COVID-19 claims was £100,387

For group income protection, COVID-related claims were the fifth most common reason for claims. There were 372 new claims in 2021, of which 66 had returned to work by the end of the year. This shows a pattern of increase, as there were 41 COVID-19 claims in 2020.

Moxham concluded: “COVID isn’t going away: so the support available within group risk benefits will be good news to many employers who are continually looking at ways of how to offer support as we learn to live with the virus.”