“New business premiums in the group risk insurance category grew by 35.8% in 2012, but fell by 2.9% in 2013. This was a result of a sharp rise in new business at Friends Life in 2012 following its consolidation of Bupaâs protection business and Axaâs UK life business, and a subsequent decline in group protection sales reported by the insurer in the 2013 PRA returns.
The majority of group risk insurers achieved solid results in both 2012 and 2013, receiving a boost in new group protection sales due to the introduction of pension auto-enrolment from October 2012. The group risk insurance category recorded a compound annual growth rate (CAGR) of 1.0% during the review period (2009â2013) to reach a value of GBP293.7 million in 2013.
Providers and advisers are expected to benefit from opportunities created by auto-enrolment, as more employers will be willing to consider a wider range of flexible benefits for their staff. Group risk benefits, such as group income protection (IP), group critical illness (CI) or group life schemes, are expected to become more relevant to employers as they aim to reduce sickness absence costs and improve staff retention.”