1. Income Protection ... and beyond
Ron Wheatcroft, 9 Feb 2017

2. Agenda In-force income protection data and high level trends
Self-insurance
Where are the gaps in data
The DWP:DH Green Paper
Presenting a market–wide picture
Opportunities    

3. Number of group income protection policies and people covered, (source: Group Watch reports, Swiss Re)
Year
No. of insured schemes
No. of people insured
2006
19,065
1,731,138
2007
18,859
1,723,960
2008
18,619
1,757,365.
2009
17,796
1,777,459
2010
17,576
1,792,038
2011
17,307
1,836,020
2012
17,224
1,963,814
2013
17,193
2,039,059
2014
17,119
2,078,536
2015
17,111
2,106,180

4. Disability insurance product trends (source: Swiss Re Group Watch 2016)
Year
Policies to retirement age/SPA
People covered to retirement age/SPA
2011
88.3%
74.4%
2012
86.8%
70.8%
2013
85.8%
70.0%
2014
84.4%
67.4%
2015
83.1%
63.4%

5. Other workplace benefits provided on disability
Employer self-insured arrangements, such as the public sector, large employers
Number of people covered is unknown
Swiss Re has estimated on a conservative basis that the number of people covered is around 3m, i.e. roughly the same as the number of people insured via a private policy or through an employer scheme

6. Number of individual income protection policies, 2006-2015 (source: ABI)
Year
No. of people insured
2006
1,418,000
2007
1,365,000
2008
1,345,000
2009
1,223,000
2010
1,381,000
2011
1,283,000
2012
1,263,000
2013
1,185,000
2014
1,100,000
2015
1,129,000

7. New individual IP sales split by duration of limited payment term, 2014 – 2015 by volume (Source: Term & Health Watch 2015 and 2016, Swiss Re)
Product 
2014
2015
% Change 2015/2014
IP to “retirement age” (excluding LPT)
63,339
66,167
4.5
Income protection 1 year limited payment term
2,200
2,383
8.3
Income protection 2 year limited payment term
17,329
33,271
92.0
Income protection 5 year limited payment term
9,402
2,360
-74.9
Income protection 'other' limited payment term
4,619
3,121
-32.4
Majority written to "retirement age" but 38% of new IP business is written on a limited payment term basis (34% in 2014).

8. Insured IP benefits in force at end 2015 (sources: ABI and Swiss Re)
Individual income protection benefits in force totalled £14,711m pa (note that these are tax-free in payment)
Group income protection benefits in force totalled £65,080m pa (note that these are taxed as earned income)
Self –insured – if we assume that the average self-insured benefit mirrors insured cover, this amounts to approximately £100,000m pa
STIP?

9. Improving Lives, The Work, Health and Disability Green Paper, October 2016
A disability or health condition should not dictate the path a person is able to take in life – or in the workplace. What should count is a person’s talents and their determination and aspiration to succeed.
We know that the right type of work is good for our physical and mental health and good health and support helps us in the workplace.
…..we are committed to halving the disability employment gap and share this commitment with many others in society.
Change will come, not by tinkering at the margins, but through real, innovative action.
Source: Ministerial foreword: Improving Lives, The Work, Health and Disability Green Paper, October 2016

10. The financial case for supporting people back to the workplace where possible – links to the Green Paper
The total annual cost of long-term absence to the private sector could rise from £4.17bn in 2014 to £4.81bn in When the public sector is added, the costs over the same period rise from £6.71bn to £7.60bn. Factors that could influence this include changes to the make-up of the workforce, including increases to the number of older workers. Source: CEBR on behalf of Unum
An annual direct financial benefit of £74m can be attributed to rehabilitation through Group Income Protection. Additional quantified indirect benefits for employers were found to be worth around £35 million.
A pound spent on rehabilitation on group scheme claimants can bring savings of £16.80 Source: EPC on behalf of Zurich

11. The extent of the IP shortfall across EU markets
Disability Gap using 60% income replacement ratio

13. Legal notice
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