UK group risk sector hits record claims payout in 2023

In 2023, the group risk sector in the UK reached a record payout of £2.49 billion, equating to £6.82 million daily, according to industry data compiled by Group Risk Development (GRiD). The sum represents a £278.4 million increase from 2022, indicating the extensive use of employer-funded life assurance, income protection, and critical illness benefits to support employees and their families last year.

Broken down, group life assurance policies provided £1.69 billion in benefits in 2023, up £160.9 million from the previous year; group income protection (GIP), £633.6 million (£85.7 million higher than the 2022 count); and group critical illness, £160.3 million as a result of a £31.8 million rise. Average new claim amounts were significant, with group life assurance at £137,448, group income protection at £27,206 annually, and group critical illness at £77,743.

Meanwhile, a notable aspect of group risk benefits is their role in facilitating employee retention and return to work. In 2023, 50.5% of employees who took extended sick leave managed to return to work by year’s end, thanks to support from group risk services. These include early interventions such as expedited access to counselling and physiotherapy, as well as vocational rehabilitation and mediation.

In total, 6,299 employees who began sick leave in 2023 returned to work by the end of the year, with 4,691 of them returning before making any claims due to the interventions provided by insurers. It was highlighted that, overall, more than 8,000 individuals benefited from these interventions in 2023.

GRiD spokesperson Katharine Moxham (pictured) noted: “The record numbers of long-term sick is an issue for the UK, and these figures show how group risk contributes to a solution: employers who offer group risk benefits to their workforce have real and practical help in keeping their employees in work, and helping those who are absent to return.

“Recent figures from Swiss Re’s Group Watch show that group risk benefits are increasing in popularity, and our results show why: the more employers who offer group risk, the more help UK Plc has to tackle this issue.”

Across all three group risk products, cancer was the leading cause of claims in 2023.

Commenting on GRiD’s analysis, director of claims, rehab, and Unum UK customer services Paula Coffey said: “We are pleased to see GRiD once again highlighting the importance of group risk protection products and the huge amount of support they have provided to employees to enable them to stay in or return to work. Group income protection rehabilitation and claims teams contribute a huge amount to the health, happiness, and productivity of their clients’ workforces every day.

“At Unum, we have dedicated in-house experts including doctors, psychiatrists, physiotherapists, and occupational health professionals providing individualised care and support for our customers. This holistic approach to absence management support has enabled us to achieve a 97% return to work success rate despite a 35% increase in referrals overall.

“Our own claims experience mirrors the GRiD findings, with cancer dominating all group risk product claims. Unum paid almost £110 million in group risk claims for cancer alone in 2023.”

Coffey added that wellbeing and preventative services with GIP can help tackle some of the causes of absence before an illness or injury leads to time off from work.

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