The number of people covered by employer-sponsored group risk policies increased by 3.1% in 2017, Swiss Re's Group Watch 2018 reveals.
The insurer's report shows the number of members of long-term disability income policies increased by 5.0%. Meanwhile, membership of death in service policies increased by 3.0%.
There was a small decline in membership of critical illness policies (CI) but Swiss Re said this was because one large arrangement was placed with an insurer which did not subscribe data for the report.
Total market premiums by product line at the end of 2017 were as follows: long-term disability income premiums £724,496,679, up 6.3%; deathin service premiums £1,386,489,870, an increase of 4.3%; critical illness premiums £101,951,178, an increase of 7.4% and, for the first time exceeding £100m.
Swiss Re technical manager and author of the report Ron Wheatcroft said: "Overall, the results are encouraging, in particular the positive long-term disability income numbers where, after many years of slow decline in policy numbers, the data show an upturn, both in policies in force and people covered. This increase was evenly spread across a range of policy sizes."
He added: "Despite ever-increasing cost pressures on employers, more than 90% of all arrangements provide cover for a period of at least five years, providing vital financial support for workers and for their families."
Death in service benefits
Once again, the market reported strong growth in the number of excepted group life policies (EGLP) and members - with the number of in-force EGLPs increasing by 14.3% in 2017.
Since 2013, the number of EGLP policies has grown by just under 150%. The number of EGLP members increased by 21.4% to 782,674 people.
Meanwhile, the number of dependents' death in service pension (DISP) policies and members fell.
Although registered death-in-service policies still provide lump sum death benefit cover for most employees, EGLPs have now become an established way of providing death benefit cover through workplace arrangements.
Wheatcroft added: "More people being covered under death in service policies is very welcome. There are issues for trustees of EGLPs, however, with the discretionary trusts used to facilitate payment potentially subject to periodic, entry and exit charges. The amount of revenue generated is tiny, no more than £1m per annum. The costs of the legal advice needed at outset and administering the tax outweigh this by a factor of four or five. As the market grows, the disparity between costs and revenue raised increases."
He said: "We are urging the government, in its consultation on the taxation of trusts, to remove this burden from employers who are simply trying to do the right thing for their workforce by arranging simple life cover to protect their families and dependents. This could best be achieved by an exemption where the sole asset of a discretionary trust is an EGLP."
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