As embattled employers look for ways to offer low-cost employee benefits, group critical illness could be just the ticket. So why is the GCI market only one-twentieth the size of group life? Nicola Culley investigates.
However, Silk hailed auto-enrolment as the shift that would spice up employer systems. He said: “I think pension reform is going to mean a lot of employers look at their systems, proposition and employee benefits. Technology costs are also coming down so flex systems will be more affordable for smaller companies as well. Auto-enrolment is a big driver of systems integration which will in turn drive the flex market forward, and take-up of group CI.”
English Mutual has noted an increase in clients considering other benefits – group CI has been one of routes the firm has been recommending of late.
Silk said clients had been keeping the purse strings tight, and group CI was a way to introduce a new benefit without incurring much extra cost.
Group CI next one along
He added: “What we tend to find is there is high take-up of GIP and group life. Group CI is the next one along. One of the things about group CI is that employers think it is just an incentive to stay off work for longer with a lump sum.
“What the lump sum can do is help an employee get their health back in order. The relief of having financial worries covered means it wards of stresses and mental health issues that may develop on top of existing condition.”
Silk pointed out that medical advancement was also driving more incentive for employers to look at group CI. “When I was young, if a member of family had a serious illness everyone ran to the hospital to go and see them on their last legs,” he explained. “But now with medical advancement people recover from many serious conditions so return to work is more likely.”
For English Mutual, group CI is firmly in its proposition. The approach, Silk outlined, was very much pick ‘n’ mix, where different benefit types and methods were available to integrate with one another.
Integration has also been on the agenda elsewhere. According to Steve Bridger, head of group risk at Aviva UK Health, integrating group CI claims with GIP into one product could be the future.
He said group CI had a long way to go to reach the size of GIP and Life, but that was not to say proposition could not have cross over. Products may start to incorporate different types of cover, Bridger added, and integration was something Aviva were seriously looking at.
Bridger explained: “Overlaying CI claims with IP and paying them together could detract from trying to support a return to work for individuals through IP. But, in another way, the lump sum payment paid with group CI that may not necessarily motivate someone back to work, would be very much complimented by IP which by nature encourages a return to work.
Bridger added: “We need to understand the best value approach on how they work together. At the moment we are looking at how we can integrate benefits. Bringing them together means employers can give that peace of mind of a lump sum, but also build in a support back to work.”
But would this add a layer of complexity, and consequently cost to the cover?
Bridger said it would not dictate a more expensive product. Rather that the proposition would have to be very clear and support understanding about what it offered. Each on their own, GIP and group CI, was not complex, but talking in the same breath would need addressing.
