Employers are increasingly becoming benefit facilitators rather than benefit providers, Swiss Re's Group Watch survey finds.
The reinsurer's annual review of the UK group risk market found that the purchasing of income protection through flexible benefits by employees grew 42.3% in 2011.
This means flex or voluntary cover now accounts for 10% of total in-force group income protection (classed as long-term disability income by the reinsurer) premiums.
Report author and Swiss Re technical manager Ron Wheatcroft, said the move illustrated the way businesses were beginning to spread the cost of benefits and that employees were more open to the concept.
"The growth of flex and voluntary cover may be an indicator of a gradual change in the role of the employer from benefit provider to facilitator as businesses seek ways of sharing costs and providing greater employee choice," he said.
The reinsurer also urged the industry to make life as straightforward for employers and employees given the impending challenges of auto-enrolment, which beings later this year for larger businesses.
Swiss Re UK CEO Russell Higginbotham, said: "With auto-enrolment we may see some existing risk schemes grow as employees who are not currently pension scheme members are enrolled.
"This will have varying effects on scheme costs depending on the additional take up of pension provision.
"It is imperative that we make the implementation of this change as simple as possible for employers and employees alike."
Higginbotham also addressed the report's findings that group life schemes currently provide 40% of all insured death benefits in-force in the UK, while group long-term disability income schemes have increased their share from 70% to 75% of all insured cover since 2002.
"As the welfare state withdraws from universal provision, the importance of the ongoing role of the private sector in protection cannot be over-estimated," he added.
Overall the group risk market reversed a two-year downward trend by seeing in-force group risk premiums rise by 2.9%, compared to a fall of 7.7% in 2009 and 1.8% in 2010.
Critical illness premiums grew 9.4%, premiums for death benefits rose 4.1% while long-term disability saw a marginal growth of 0.1%.
