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HI Daily - Viewpoint: Looking ahead for group risk

By Paul Avis.

There has been a wealth of UK Government Department consultations which could have had a positive impact on the market. Trade bodies such as Group Risk Development (GRiD), the Investment & Life Assurance Group (ILAG) and the Association of British Insurers (ABI) have always been keen to respond. The responses have not always been successful in achieving their aims, however united a message is given.

In April 2017, following a Treasury consultation on salary sacrifice, the dual taxation of both premiums and benefits for group income protection (GIP) was clearly a shock to the industry in an era where GIP was being suggested by The Department for Work and Pensions as one of the best ways to retain disabled employees in service.

With the roll-out of Universal Credit (five State benefits combined into one) creating work and bad headlines, the use of consultations to consider serious topics was welcomed by the industry as an opportunity to look forward. But after responding to many of these the actual output from them has been negligible: lots of broad sentiments and rhetoric, but little tangible action or value to employers and employees.

These consultation responses include The Department for Work and Pensions “Improving Working Lives” consultation. Insurers have been commissioned and have been working hard to create a ‘workplace statement’ highlighting the shortfall between State benefits and pay. An employer version (covering occupational sick pay, GIP and possibly defined benefit ill health early retirement) is being configured to provide as accurate a picture as possible. This could highlight the shortfall and then educate the employee about the potential for either individual or group income protection through the proposed ‘Single Financial Guidance Body’ and is possibly the only positive from the consultation response.

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