£1.5bn paid in group risk claims in 2016

Nearly £1.5 billion was paid out by the group risk industry over 2016, up £100 million on 2015, according to research by industry body Group Risk Development (Grid).

The research, which is based on claims data from Grid’s provider members, also found that 24,925 claims were made in 2016 for group life, group income protection and group critical illness.

The research also found:

  • Group life policies paid out £1.067 billion over 2016, which is an increase of £67.2 million from 2015. The average claim amount for group life policies was £114,239 in 2016.
  • Group income protection policies paid out £11.7 million more in 2016 than in 2015, with total benefits paid reaching £358.7 million in 2016. The average claim amount in 2016 was £24,740.
  • The average claim amount for group critical illness policies was £65,704 in 2016, with the total benefits paid out recorded at £71.6 million. This is an £8.9 million increase from 2015.
  • 68% of group critical illness claims related to cancer, compared to 43% of group life claims, and 24% of group income protection claims.
  • Of the group critical illness claims that were not paid out in 2016, 47% were because the employee’s condition did not meet the definition of the critical illness being claimed for, 37% were not paid due to an existing medical condition that the employee had at the time of joining the scheme, and 11% of claims were not paid because the employee tried to claim for a condition that was not covered under the policy.
  • 54% of employees that benefited from active early intervention services received support for mental health problems, and 17% received support for musculoskeletal problems.

Katharine Moxham (pictured), spokesperson at Grid, said: “These figures give insight into the fantastic contribution of employer-sponsored group risk protection benefits in supporting people when they need it the most. These policies pay out in dreadful circumstances foe employees and their families. It’s excellent to be able to quantify the extent of the support we give as an industry through publishing these figures.

“It’s very affordable for employers to make a difference, but Grid’s research regularly indicates that the cost of these benefits is overestimated or businesses don’t appreciate how much is included, which could also actually save them money elsewhere, for instance by not having to invest separately in a stand-alone employee assistance programme or HR or legal advice.”