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.
For the moment, Aviva has reported positive discussion with intermediaries about its group CI product, especially when integration of flex systems was part of the picture.
But Bridger said some did not see group CI as something that was necessarily going to drive a massive benefit. If you were an employer with a budget, would you put extra on group CI? According to Bridger, group CI went through a phase of growing “nicely” by roughly 10%. In the past two years, however, he said growth had slowed most likely because of the economic impact on corporates.
Signs good again
He added: “Typically GIP and life have been more mature and people are more aware of them. The signs are good again now. The activity is healthy with bigger existing customers and many are looking at expanding with flex and reward packages.
“The employer can offer employees access to something that would otherwise be very expensive and more cumbersome to obtain with the underwriting process.”
By nature, group life is aligned with pensions, meaning intermediaries will likely look to it, and GIP can be a natural option on the back of it. Will group CI ever fit in?
At the minute, the UK group CI market is still immature comparably; not just to its life and IP companions but globally. Aetna recently spied an opportunity to launch group CI in the US which will be available in October, but it has no plans to do so in the UK.
Mostly this was down to Aetna focusing on its existing and newer European product line first, before introducing different additions. But the opportunity in the more mature and larger US market versus the smaller, less mature UK has been noted.
Nic Brown, head of sales at Aetna, said: “The US market is a lot more mature. And it is a lot larger than the UK. We do not offer group CI in Europe at the moment. We go through an annual strategic review process and from a European perspective we are in a period of transition at the moment in terms of fixing our strategy.
“We will look at what other products we may move into in the future. Group CI could be one.”
Brown added that one consideration could be how group CI could fit in with other employee benefits and there was “definitely” a space to have discussions about how products could follow that.
Could the real future for UK group CI be integration into other and better known cover? Or perhaps the auto-enrolment, stagnant wage and flex evolution power-of-three will be enough to drive healthy growth. Either way, it seems to be getting there, but has a long way to go.
