In 2015, the number of companies who bought group income protection insurance for their employees was more than 300, which is an increase of 20 per cent over the previous year, according to new research from Unum.
Unum says that the group income protection market is continuing to grow, with 300,000 more employees covered by the end of 2014 than in 2011. In fact, 2.1 million people are now covered for income protection through their employers.
It’s a trend that Unum believes has the potential to continue because there is still room for the market to grow further.
Last year alone, nearly 40,000 employees who previously didn’t have any financial safeguards in place, acquired protection through their employers against illness or injury.
‘Battle for Talent’ a Catalyst
Peter O’Donnell, chief executive of Unum, said: “From our own research it appears that the battle for talent is a catalyst in driving this change. The world of work has changed enormously over the last few years.”
O’Donnell added that the ways in which people work and the overall make-up of the workforce have been influenced by developments in technology, attitudes and society. Nowadays, he said, employers expect more than just a competitive salary from their employer, with a third even saying they would seek alternative employment if they experienced poor workplace wellbeing.
“An effective way for companies to demonstrate they have their employees’ interests front and centre is a comprehensive benefits package,” said O’Donnell.
Furthermore, he believes that competitive benefits packages are particularly important for companies less than five years old. These firms inevitably want to attract the best talent; take on board new ideas; and adopt fresh approaches.
With the right leadership, culture, working practices and employee benefits, these companies can sculpt a workplace that attracts the people who matter most to them. According to O’Donnell, industries such as IT, retail, high-tech manufacturing and consultancies where people are core to the overall success of the company are especially attuned to this approach.
Zurich: £110m a Year from Income Protection Policies
O’Donnell concluded by saying: “The time is right for brokers to discuss employee benefits with their clients and work with them to find the most effective package that suits the needs of their staff, both now and for the future.”
Research carried out last year on behalf of Zurich showed that the value of rehabilitation support provided to individuals via income protection policies is around £110 million per year.
As a result, people are recovering more quickly and returning to work sooner. For every £1 spent on rehabilitation to support disabled workers and the long-term sick, cost benefits of £16.80 are generated for individuals, the tax payer, employers and insurers.
Zurich said that mental illness accounts for the majority of claims and is estimated to cost the UK economy around £70 billion per year.
Gary Shaughnessy, CEO of Zurich UK Life said: “With the UK’s workforce aging, we reiterate our call to encourage the Government to consider incentives for employers to improve take up. We believe group income protection needs to be at the heart of any UK welfare solution, which should be a partnership of public and private provision.”
Income protection insurance is an important and very worthwhile product. Many people do not realise that the product is not just about protecting income when employees are on long term sick but it can also offer a wide range of rehabilitation services that people may find difficult to access without this type of cover. Employee Benefits is an area we focus on when talking to our corporate clients but we also support the 7families initiative which aims to raise awareness of this subject to individuals. www.7families.co.uk
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