Group risk covers 1.25m more people - Swiss Re report

The figures showed 200,000 more people received life and disability insurance cover arranged by their employers in 2014.

For the first time the group risk market saw annual growth beyond £100m recorded.

The figures come from the Group Watch 2015 report from Swiss Re, which summarises results and surveyed 34 insurers and intermediaries.

Premiums have grown 8% across all lineswith a 9% increase in in-force death benefit premiums and a 6% growth in long-term disability income (income protection) premiums.

There has also been growth in excepted group life premiums which grew 28% and saw benefits increase by 29%.

There was also an 8% increase in group critical illness premiums.

The number of new schemes grew in 2014 with more group life and critical illness schemes but long-term disability income schemes continued to decline.

Life and disability insurance rose by 200,000 more people in 2014, compared to 300,000 in 2013.

Russell Higginbotham, CEO of Swiss Re UK, said: "These are good figures for the group risk market - but they hide the fact that this industry is at a crossroads.

"The welfare state cannot continue to fund at current levels and the next Government will have to make cuts to the welfare budget.

"Insurers need to be ready to step up and adapt to that new reality. If we don't, we may find existing models under threat in the same way that reforms have reconfigured pension provision."

Ron Wheatcroft, author of the report, said: "The results show solid growth once again but we need to decide if we want to carry on as we have done for the past few years or offer something more ambitious."

"Auto-enrolment could be the way to increase coverage if we are unable to deliver growth to begin to fill the gap which will be left by declining state provision.

"Employees tell us that they would value greater workplace access to products and services but, somehow, this hasn't translated to more coverage."