Group Risk Market update Katharine Moxham Spokesperson, GRiD Protect Association Meeting 18 November 2016

What is Group Risk? Highly valued but relatively inexpensive Umbrella name for 3 Employer sponsored benefits Group Life Assurance - Group Income Protection - Group Critical Illness Highly valued but relatively inexpensive Often insured What is Group Risk? Fewer medical details & “Once and Done” underwriting Gives employees access to financial protection Can legally cease at 65/SPA Free or reduced cost to end user Usually compulsory but can also facilitate access to protection cover through voluntary, flex and affinity schemes

Financial Life Line GL GIP GCI Provides a benefit on employee’s death - tax free lump sum up to LTA/taxable dependants’ pension Benefits in excess of LTA through “excepted” route GL Provides a continuing income during employee’s illness or injury – paid through payroll in normal way Used to cover employer’s promise of long term sick pay GIP Pays a tax free lump sum to employee on diagnosis of one of a defined list of serious medical conditions or on undergoing one of a defined list of surgical procedures GCI

What’s New?

A new, modern website

New PR Value Next Refreshed and reinvigorated For members Message For members Value Thinking further ahead Next

The broader picture

Networks remain in place Brexit Legislation Business as usual Remains in place Multi-national pooling ABI Networks remain in place “The UK insurance and long-term savings industry is strong and built to protect customers from market uncertainty and shocks.” Huw Evans, Director General

Employer Sponsored Group risk protection Deficit Reduction Increased Productivity 7 Day NHS Ageing Workforce Reducing the disability employment gap Employer Sponsored Group risk protection Welfare Reform Fit for Work Service Health & Wellbeing Mental health crisis DH Responsibility Deal/Workplace Wellbeing Charter Work Foundation Health at Work Policy Unit Workforce fit for the future Challenges for the UK government New joint DWP/DH Work & Health Policy Unit

State support is changing From 6 April 2017 Employment & Support Allowance for new claimants in WRAG = Job Seekers Allowance (£1,500pa less) FOS: Fair & Reasonable Upheld Complaint 2014 “...reasonable for only the amount of ESA Mrs H actually received to be deducted...not a generic amount.” State support is changing Is traditional group income protection benefit formula with a generic state benefit deductible still appropriate for 21st century? Advisers will guide employers on the choices available

Came into effect 12 August 2016 Introduces duty of fair presentation (replacing duty of disclosure) Insurance Act 2015 Employers must disclose every material circumstance which they “know or ought to know” Or give enough info to let insurer know needs to make further enquiries Clarifies whose knowledge should be sought Makes new proportionate remedies available to insurers where breach occurs Onus on employers & advisers to ensure right info made available to insurers

Opportunities to influence Pensions Tax Relief Consultation Salary Sacrifice Consultation DWP/DH Improving Lives: The Work, Health & Disability Green Paper GRiD made case for delinking group life from pensions tax regime GRiD made case for group life and group income protection to be excluded from proposed changes Role group income protection can play in supporting employers/employees has been recognised Workshop to inform GRiD response