Fiona Murphy discusses the results of the 2016 Swiss Re Group Watch in further depth with report author Ron Wheatcroft.
Ron Wheatcroft, technical manager of Swiss Re told COVER: "We expected an increase in expected group life schemes.
"Alongside the numbers we carry out a survey of the main intermediaries and providers, where we ask questions about the main things that happened and the highlights for 2015. [Excepted group life policies] dominated everything.
"When the numbers came through they were a little higher than we expected but also given the discussion on the retail side [of protection] discussion of relevant life plans, I am not surprised that [the results have increased].
"It is probably a little more than expected but given the levels of activity around the pensions lifetime allowance, this is a continuation of what we saw in last year's report.
"There is still some uncertainty in the market and differences of views between employee benefit consultants and lawyers around the best way to handle excepted group life schemes.
"Achieving clarity on that would be very desirable and we are keen to see resolution of that.
"Group critical illness is doing well - within that data there is a split between schemes funded by employers and schemes funded by members.
"In the growth in last year's report, member paid arrangements had increased but employer funded had stayed the same. I think that this is logical- it fits neatly with the flex package and allows you to cover the spouse/partner.
"With group income protection (GIP), the results are disappointing. There was a fair bit of comment in the report around the benefit formula on GIP offering state benefit offsets.
"I know that a number of providers are now looking at that and its being challenged more by employee benefit consultants.
"Overall there is also a big self-insured market which is the whole size of individual and in force schemes combined. The GIP results were the most disappointing: as an industry, that's where we should be looking first [in terms of a priority benefit.]
"We are also seeing that 90% of GIP schemes have a benefit period of 5 years or more - bigger schemes have moved to Limited Benefit Terms.
"The trend reported by EBCs is the shorter benefit payment period is becoming more common. People move job more frequently. But people are working later in their lives and for longer.
"Overall the group market is reasonably confident but the big question is: how do we get more schemes into the market?
"Employee benefit consultants are clearly competing against one another and the challenge to insurers is: where does new business come from?"
Further reading
Swiss Re Group Watch: Excepted group life sum assured grew by 30.9%
