"I am an adviser with a corporate client who has a Group Income Protection (GIP) policy. The client is asking where this market is going and what direction do you see GIP going in the next year. Where do you see innovation? This will help me in my sales pitch."
Paul Avis, Canada Life Group
We are hopeful the GIP market should grow significantly with the macro environmental changes that are happening. Growth seen in the 2012 Swiss Re survey was not in employer numbers but in lives covered and increased premiums as ageing, low interest rates and deteriorating claims experience meant that market premiums hardened.
However, with significant reductions in State Benefit for disability support through Welfare Reform, the importance of this benefit has never been greater. Employees should be lobbying their employers to purchase GIP as a core, rather than peripheral benefit.
The ability to cover pension contributions through GIP benefits offers a waiver of premiums during absence, so pension plan funding continues. The benefit also acts as a differentiator as employers start to recruit and want to retain staff - we have always argued that protecting income today, not just in the future, is a major consideration.
Innovation in the market needs to come as much from advisers as insurers. They need to recognise the value Employee Assistance Programmes, Second Medical Opinion services and online and telephone legal services provide for employers - and promote them to death on social media, employer intranets and insurer websites.
GIP can be repositioned as a service based contract as well as an insurance one. The financial benefit comes into play when nothing else can be done to return an employee to work but when employers can see what superb vocational rehabilitation is available; they will want to engage with insurers earlier to support employees back to the workplace.
David Levey, Mercer
In terms of innovation, with GIP we are seeing more focus on controlling risk through case management in the early stages of absence and the co-ordination of providers' services during this period, increased movement towards fixed term policies, policy enhancements to reflect changes to State provision, and an increasing use of flexible benefits to tailor cover to meet the employees' requirements.
