Swiss Re (SSREY.PK) said its Group Watch 2012 report has returned a mostly positive view of the group risk market with the key finding that the negative trend of the past two years in group risk premiums has been reversed. 2011 saw premium growth of 2.9% compared to a fall of 7.7% in 2009 and 1.8% in 2010.
In-force sums assured across all product lines increased and there was growth in key areas, most noticeably "flex" and voluntary cover. The report, which also analyses views on key issues from all major product providers and intermediary firms, highlights changing employer roles, regulatory changes and the implementation of auto-enrolment as influencing factors on the sector in 2012 and 2013.
All three main product areas surveyed, death benefits, long-term disability and critical illness premiums rose in 2011. Critical illness premiums grew 9.4%, while premiums for death benefits were up 4.1%; and, long-term disability saw a marginal growth of 0.1%.
Looking to the likely issues and opportunities for 2012 and 2013, one big challenge for group risk will be the consequences of the beginning, for larger employers, of auto-enrolment into qualifying pension schemes.
Russell Higginbotham, Swiss Re's UK CEO, 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."
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by RTT Staff Writer
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