Need to know:
- Non-core benefits, such as virtual GP services and employee assistance programmes, can help employees access healthcare.
- Interest in health insurance products, such as private medical insurance and health cash plans, has increased.
- More cancer claims may materialise as a result of difficulties accessing NHS services.
Pressure on the NHS during the Covid-19 pandemic has left waiting lists in a sorry state, with 6.73 million people waiting for treatment in England, up from 4.42 million at the beginning of 2020, according to NHS England's waiting time data published in August 2022. Difficulties accessing the NHS, both now and during the pandemic, will have ramifications for group risk products, with insurers and employers looking to bridge the treatment gap.
Concerns about accessing treatment have fuelled demand for group risk benefits, with Swiss Re’s Group watch 2022, published in April 2022, reporting a 5.9% uptick in the number of people covered in 2021. Katharine Moxham, spokesperson for industry body Group Risk Development (Grid), says: “Anecdotally, advisers have never written so much new-to-market business, with employers of all sizes looking to offer group risk benefits.
“The pandemic and issues around accessing treatment have made employers much more aware of the value of being able to help an employee and their family if something terrible does happen.”
Accessing treatment
As well as helping an employee in the event of a serious or long-term illness or if they die, employers also value the additional health and wellbeing services wrapped up in these benefits. These include virtual GP services, second medical opinion services and health and wellbeing portals, most of which can be used without the need to make a claim. Ed Watling, senior employee benefits consultant at Mattioli Woods, says: “Many of the insurers increased these benefits during the pandemic and employers do expect them now. They can fill some of the gaps in the NHS, enabling employees to speak to a GP or get mental health support, as well as helping them to adopt healthier lifestyles.”
The importance of helping employees access healthcare has extended beyond group risk too. Demand for other health insurance products is on the up, says Nadeem Farid, head of employee benefits at Drewberry. “NHS waiting lists make medical insurance a more valued proposition now and, where an organisation has a limited budget, we’re seeing increased interest in health cash plans," he explains. "Even these lower-cost options can help an employee get an initial consultation to get a diagnosis.”
Claims activity
While the state of the NHS has seen employers focusing on their health and wellbeing propositions, there are also concerns that difficulties accessing healthcare will lead to more group risk claims.
Cancer is the number one cause of claims across all three products but the British Medical Association’s analysis of NHS cancer statistics highlights a worrying shortfall in service. It found that the NHS has not met its target of seeing 93% of patients within two weeks of an urgent GP referral since May 2020, with the latest NHS figures at 77.7%.
Additionally, Grid’s annual statistics, published in May 2022, show an increase in claims. In 2021, group risk insurers paid out £1.57 billion, nearly £200 million more than the previous year, although more people were covered in 2021.
Insurers are watching closely to see whether the difficulties accessing the NHS will mean more claims materialise. Ian Ranger, head of claims and medical underwriting at Canada Life, explains: “We haven’t seen anything significant yet. Intuitively it feels like claims should increase but we’ve actually seen a downward trend, especially on group income protection.”
He believes this downward trend may be down to several different factors. “Some claims may have been attributed to Covid-19 rather than cancer or other causes,” he says. “Likewise, the delay in seeing an NHS cancer consultant might not be making much difference to the prognosis. I do anticipate an increase but probably over a more prolonged period.”
Premium pressure
Whether these claims materialise and how this affects premiums is also up for debate, especially as other influences may have more of an inflationary pressure. In particular, if the UK falls into recession, this is likely to lead to more claims on group income protection as a result of anxiety and financial stress.
However, the greater use of health and wellbeing benefits could help to counter this, says Ranger. “Employees are using virtual GP services to check health worries out that they might never have bothered their GP about,” he explains. “This can lead to better outcomes and help to prevent some claims. There’s lots to consider but we’re not about to adjust premiums.”
