Time for Promotion to the Premier League?

Can the recent growth in the Group Risk Market be sustained, asks Peter O’Donnell, Chief Executive Officer, Unum

As a Liverpool fan, the Premier League had renewed interest for me this season.  Sadly we didn’t quite manage to end our 24 year wait for the title, but I have high hopes for next year.  I also have high hopes for the Group Income Protection (GIP) market. In the decade or so up to 2012, its form was decidedly relegation standard, with year-on-year minimal growth in the number of employees covered.The status quo appeared to have been set. The market would trundle along in the lower leagues, a long way from the spotlight.

However, in 2012 something shifted. The market is finally on the move, threatening promotion to a new league of interest. With growth of almost 11% in the past two years this is looking dangerously like becoming a trend.  A forward-thinking approach from brokers and insurers is clearly having an effect.

This growth means that over the past two years, 200,000 more employees have a back-up plan in place if they are unable to work through long-term illness or injury.  Of course, the growth versus the opportunity is still modest, but we’re positive that these figures do show that GIP can be promoted to become an employee benefit in the premier league, joining the likes of a pension and life insurance.   There is a real chance to extend cover to beyond more than the current one in seven employees.

So what has fuelled this change? There are some external factors which have certainly played a part.  Pension auto-enrolment has moved employee benefits up the business agenda and been a catalyst for many employers to review their offering. Furthermore, when you look at the changing demographics of the UK workforce, employees have different needs and value different benefits. A third of current workers are Baby Boomers, aged between 53 and 68, and this percentage is predicted to grow significantly over the next decade. This generation places greater value on help and support from their employer if they suffer long-term illness or injury.  Finally there was the fantastic news on cancer survival rates in the press over the last few weeks, reinforcing that you are three times more likely to suffer long-term illness during your working life than to die.

And we have also worked hard to help you get your foot in the door, making what in the past may have been a difficult or tricky conversation about GIP with your clients a little bit easier. Through TV adverts and national media partnerships, we aimed to make employees aware of Income Protection, highlighted why they might need it and encouraged them to ask at work about it.  We targeted employers through HR and FD focused media, to explain the value of GIP to decision-makers, helping you to have conversations with a more informed audience. We’ve built up a significant following on social media, and commissioned robust and innovative research to support the case for GIP.  From looking at the make-up of today’s workforce to the value of communication and the cost of staff turnover, these are all designed to stimulate conversation and debate around what employers should think about when it comes to employee benefits. While not as high profile as TV, we have by no means stepped away from promoting GIP, and continue to generate significant coverage for it in media read by those key benefit decision makers.

Through our evaluation research we know this is having an effect.  From 2011 to 2013 the number of employees who intend to ask about GIP at work has quadrupled and the number of employers who intend to buy GIP has doubled.  If your clients at least know what GIP is, and recognise there may be benefits for both their business and their staff, then you have a better opportunity to help them fit it into their benefit package. Your feedback, coupled with the healthy increase we’ve seen in new-to-market contracts, shows this is working, and we want to enable those conversations to happen a lot more.

We will continue to strive to work with you in a more collaborative way, be that through joint presentations to your clients, or analysis of your client data to establish the best GIP opportunities. We are always happy to explore new approaches and do what we can to make it easier for you to sell. After all, the traditional approach left GIP in the lower leagues; a different approach might just propel it to the premier league.

Peter O’Donnell
Chief Executive Officer