Some workforces value certain group risk products more than others. So analysis may be necessary.
Some workforces value certain group risk benefits more than others. So analysis may be necessary.
Research consistently shows that the majority of employee benefits packages are in place only for historic reasons, so employers who haven’t given much thought as to why they are offering group risk benefits may well find they are not providing the products most suited to their workforce.
For example, death-in-service benefits are by far the most commonly offered employer-sponsored group risk product. According to Swiss Re’s Group Watch 2018 report, they have around 9.5 million scheme members, compared to only 2.4 million members for group income protection and just under 0.6 million members for group critical illness cover.
But employees are far more likely to make a claim on a group income protection or critical illness scheme because the chances of surviving many serious conditions are now much higher than they used to be.
For example, according to the British Heart Foundation, an estimated 915,000 people alive in the UK have survived a heart attack and, according to Cancer Research UK, the chances of surviving cancer in the UK have doubled in the last 40 years.
50% of people with cancer now survive for 10 years or more and the survival rates for some of the most common types of the disease are much higher still – 98% for testicular cancer, 84% for prostate cancer and 78% for breast cancer.
Recent claims statistics produced by industry body Group Risk Development (GRiD) show that in 2017 group income protection schemes – despite their far smaller membership numbers – paid out for 15,322 claims compared to only 9,404 for group death-in-service schemes. Even group critical illness cover paid out for 1,180 claims.
Furthermore, the early intervention facilities available on group income protection schemes enabled a further 2,989 people to return to work during 2017 before they even became eligible for any claims benefit.
In industries with heavy populations of single young workers there is, in particular, a case for regarding death-in-service cover as being a lower priority than other group risk schemes such as group income protection or critical illness cover.
If someone does not have a serious partner or any children they may not be too bothered whether their estate receives a pay out in the event of their untimely death. They are, however, more than likely to place significant value on the knowledge that they will receive financial support in the event of their own incapacity.
Employers should seek to understand exactly what the demographic of their own workforce is most likely to appreciate within a group risk scheme and to establish exactly what they want their schemes to achieve.
Are they, for example, in place mainly to ease difficult conversations with family in the event of a tragedy occurring or is the group risk scheme’s primary function considered to be as a valued employee benefit to help with recruitment and retention?
If it is the latter then it would certainly help to know what their competitors within their own industry are offering, and Chase de Vere can shed valuable light on this through the regular benchmarking research we conduct.
For example, if you are a firm in the financial sector you may be interested to know that group critical illness cover is much more popular there than it is on average. 20.5% of financial firms have the product, which is not that far behind the 32.4% of them that have group income protection.
We are unusual in the employee benefits space for benchmarking group risk products and it is now standard for us to include a range of such benchmarking information at our bi-annual group risk reviews.
Anyone who is not taking advantage of our bi-annual reviews is therefore in danger of losing out on a useful added-value service as well as running the risk that their current group risk benefit schemes are no longer the most competitive options in the market or the most appropriate to their own particular workforce.
For more information and advice on group risk benefit schemes get in touch with us here, or alternatively give us a call on 0345 300 6256.