john gillman. group income protection number of lives covered
TRANSCRIPT
John Gillman
Group Income ProtectionNumber of Lives Covered
Flexible benefit schemes accounted for 7.1% of premium income in 2010, up from 6.7% in 2009
Schemes with limited payment periods accounted for 10.1% of in-force schemes, up from 7.1% in 2009
Source: Swiss Re Group Watch 2011
Concern %Cost increasing over time 91
The potential length of benefit payments and the fact that the individual remains on the payroll 71
The potential for litigious claims against the employer as policyholder 38
The fact that an incapacitated employee will have an expectation to return to their pre-disability occupation in the future 32
Source: Watson Wyatt (Towers Watson) Risk Benefit Survey Report 2007
Interviews conducted with nine professional services companies
Accountancy (two interviews)
Lawyers (one interview)
Management Consulting (one interview)
Insurers (two interviews)
Retail high street bank (one interview)
Inter-broker dealers (two interviews)
Between them they have 50,000 plus employees
Smallest: 2,600 Largest: 10,000+
In the last ten years:
Four have moved to flexible benefitsOne has extended the deferred period from 26 to 52 weeksOne has moved from payment to NRA to a two year limited term
Continued
One has put more restrictions on eligibility Two fully intend to move to limited term
payments (one year and five years respectively) as soon as they can get management agreement
One has substantially reduced benefits for new entrants
Limited term (possibly with lump sum payments)
Pay direct arrangements
Flexible benefits and flexible approaches to benefit design
Even greater emphasis on returning employees to the workplace
www.prioryhouseconsulting.co.uk
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