Need to know:
- The Covid-19 pandemic has led to an increase in claims on group income protection and life assurance policies.
- The group risk industry has seen significant growth in employers providing more group risk products for their employees.
- The pandemic is an opportunity for employers and employees to change the way that they view group risk products.
The Covid-19 (Coronavirus) pandemic has created high levels of health risks for employees worldwide, which has, consequently, impacted the level of group risk claims that have been submitted through life insurance, income protection and critical illness insurance. The pandemic could have a long-lasting impact on the group risk benefits that employers offer.
Group risk support
The pandemic has hugely impacted the wellbeing of employees in the UK with many worrying about their health and financial situation. The Covid-19 return to work research report, published in August 2020 by Huma, found that 57% of employees are not confident with the measures in place to ensure their safety and wellbeing.
Employers can offer group risk benefits to support the health of their staff. Group income protection will provide pay to employees if illness or injury stops them from working for a prolonged period, while critical illness insurance will pay a lump sum to an employee who has a serious medical condition. Although Covid-19 is not a covered condition on critical illness policies, if complications from the virus lead to other medical conditions that are included, policies will pay out as long as terms and conditions are met. Group life assurance, meanwhile, provides a death-in-service payment to an employee's family.
There has been a significant upturn in insurance policy claims due to the pandemic, says David Williams, head of group risk at Towergate Health and Protection. “Once the panic of businesses transitioning into a remote working pattern was solved, the attention switched towards looking after employees’ health while they were [working remotely]," he explains.
“We found an increase in businesses purchasing life assurance benefits as well as income protection for their employees."
During the pandemic, many employers have introduced new group risk benefits due to them being worried about their workforce not having life insurance. “Those that have been able to stabilise business performance during [the pandemic] have been looking to provide more support services for their employees in the group risk area,” adds Williams.
Group risk has always been a popular benefit for employers to offer. The Employee Benefits' Benefits research, published in May 2020, found that 80% of respondents offer life assurance, or death-in-service benefits to all staff, with an additional 41% offering income protection to all employees. However, that this has seen increased growth during the Covid-19 pandemic, says Paul Avis, marketing director at Canada Life. “In the last five months, we have seen considerably more employees make claims through insurance policies that the business offers; there has been an increasing demand in income protection, and unfortunately, death-in-service protection, due to the uncertainty of the Coronavirus pandemic,” he explains.
More employees are also worrying about their health and safety, and are consequently prioritising this, adds Avis.
“From a business perspective, group risk insurance should be much more highly valued as a result of Coronavirus, and it must be better understood by employers and employees alike," he says. "With the world of work changing, many employees may never go back to an office permanently, so it’s important for businesses to ensure that employees are receiving useful information virtually about the group risk benefits that an employer offers.”
How will the pandemic change insurance policies?
However, many employees may still not be aware of the support that group risk benefits can bring them. Employers may need to take this time as an opportunity to place greater importance on these benefits when it comes to communication, for example.
Simon Curtis, senior consultant at Premier UK, says: “The group risk insurance and healthcare industries will change for both businesses and employees. Employers will now have to address the benefits that they offer to employees to ensure their safety. There has been a big focus from employers to communicate these group risk benefits that are on offer for employees.”
In recent months, employees have taken advantage of the group risk benefits that their employers offers, and the number of people that take these policies out will continue to rise due to the severity and the uncertainty of the Coronavirus pandemic, says Curtis.
Williams adds: “There has been an increase in employees using group risk benefits provided by employers during this time, most noticeably in the life assurance and income protection department. It is important for employers to get behind these policies for the foreseeable future. Employers 10 years ago would not consider buying into group risk insurance, but this mindset has gradually changed year on year, and now, the mindset has transformed drastically.
“The way that the working world is evolving has created awareness around this type of benefit, and employees are beginning to appreciate the value of these benefits, so it is up to businesses to offer this imperative service, and communicate this in the right way.”
Return-to-work support
Employees who are making their return to the office may consider themselves to be most at risk, therefore, the chances of them wanting to engage with a policy may be higher than previously.
Glenn Thompson, customer solutions director at Unum, says: “Now that employees are aware of the risks that they may encounter due to the pandemic through health or financial concerns, they may be more aware of the policies available to them.
“Employers can make this easier to access, by offering education on insurance policies, offering online platforms that provide key information for employees to know, or even offering virtual sessions to increase awareness around these group risk benefits.”
For an employer to support the health of employees, and help lessen the blow of an employee suffering from an illness, they must understand the importance of offering group risk benefits, and communicate this to employees accordingly, both now, and in the future.
