Product innovation in group risk has been in short supply and the fact that the market has access to only two significant reinsurers in Munich Re and Swiss Re may have played its part in stifling innovation. Or could it just be coincidence that Unum, which does not reinsure its group IP book, has produced the one significant recent product launch?
Unum’s Dual Benefit Group Income Protection, launched this January, has been designed for smaller businesses with three to 99 employees which do not currently offer IP or which may not offer any kind of occupational sick pay. It limits benefit payment periods to two, three, four and five years and provides the option of having either a four week or eight week deferred period, in addition to the traditional options of 13 and 26 weeks – the first time a group IP provider has offered a deferred period of less than 13 weeks.
An automatic monthly Business Benefit helps employers cover costs such as making reasonable adjustments to the workplace to facilitate an incapacitated employee’s return to work and hiring a temporary replacement, while a serious illness benefit pays a lump sum to the employer – as opposed to the employee – at the end of the income benefit period.
Wojciech Dochan, head of commercial marketing at Unum, says: “We found that a lot of newly formed companies question why they should provide disability benefit up until the age of 65. They would prefer to provide cover for employees for two years and to benefit from payments themselves if employees are incapacitated, in a similar way to key person cover.”
Legal & General also demonstrated an awareness of the fact that jobs are no longer for life with the launch of its Progressive Group Income Protection in April 2007. The approach uses “own occupation” cover for the first two years, reducing to “any suited” cover for the next two years. If an individual is still unable to return to work after four years, the assessment of an employee’s ability to work is based on activities of daily working. Claimants can receive income until retirement or a lump sum can be paid.
Otherwise, company specific product news tends to be limited to add-ons. This March BUPA made its Positive Health information service available to group IP and CI members, in February 2007 AEGON Scottish Equitable added the RED ARC bereavement counselling service to its group life offering and in January 2008 Generali added Best Doctors to its group IP.
Previously the Best Doctors facility, which is available to 11 million people across 30 countries, had been exclusive to Canada Life in the UK, but now that the exclusivity period has ended it could be considered by other group risk providers as well. Dominic Howard, director UK and Ireland of Best Doctors, states that the ultimate aim is for every UK group IP and CI scheme to offer it.