Group risk rates expected to soar 17%

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Group income protection premiums could soar by as much as 17% with minimum rises predicted to hit at least 7% this year, according to Capita Employee Benefits.

The firm revealed that one of the market leaders was anticipating these to be the levels of increases for the next year.

And the consultancy warned that it expected these rises to continue in the long term as insurers started to harden rates and take greater consideration of population health risks.

It follows group IP premiums rising by around 20% in the last year for the firm's 1,800 clients.

Speaking at a London HR Connection event, Capita Employee Benefits head of health management Stephen Hackett, explained that the prices hikes would hurt companies.

"The two leading providers are Unum and Canada Life and both are saying prices are starting to harden," he said.

"One of those market leaders is anticipating minimum premium increases of 7% this year on GIP policies and for large corporates that could be as high as 17%.

"That's going to hurt a lot."

Hackett noted that by introducing and co-ordinating health and wellbeing strategies for their workforces, employers could mitigate some of the effect of these increases.

"You can tackle some of these costs by redesigning benefits, by increasing excesses, by and controlling benefits," he said.

"But overall, in the long term I don't think it's going to go away. The only way of doing it is tackling the risk of that volume of people represented and improving that risk and so I think that starts to formulate the business case for finance directors.

"You've got to engage the finance team in the organisation on a practical front," he added.

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