Grid: Protection should be incentivised - not compulsory

clock • 1 min read

Grid has argued that incentivisation is the best way for the protection market to expand - not compulsion.

The trade body for the group risk industry was responding to PruProtect's call earlier this week for protection to be made compulsory.

Speaking at a media briefing to publish its half year results, Deepak Jobanputra, actuarial and product director at PruProtect, said simple term assurance was not sufficient and that people were not realising the risks they were leaving themselves exposed to.

He said: "Everyone needs critical illness not just life cover. Protection insurance should be compulsory."

Herschel Mayers, CEO of the provider, added: "I think we should lobby for that."

Katharine Moxham, spokesperson for Grid, acknowledged that while a form of compulsion in the group risk sector (similar to that being implemented for pensions) could save the government around £3.5bn a year, this would be a bridge too far a present.

"Our own research amongst employers found that almost half (49%) of those who do not already offer group risk protection benefits said they would consider implementing a group life scheme alongside pensions auto-enrolment dependent on various conditions - potentially making major inroads into the country's growing life assurance protection gap.

"This shows that the appetite is there as long as employers are incentivised and don't feel put at a disadvantage by reforms.

"On balance, incentivisation or "soft" compulsion is far more likely to be the route of choice for protection since people's needs vary so greatly in this space," she concluded.

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