Press release 31 August 2021.
Dependants of employees with insured employer-sponsored death benefits - one of the most popular employee benefits - have received more financial payouts as a result of Covid-19 in the first half of 2021 than in the whole of 2020 - announces GRiD, the industry body for the group risk sector - with the average payment over £98k.
Employer-sponsored group life assurance pays out a benefit following the death of an employee1, and in the UK nearly 10 million2 employees currently have death benefits insured through the group risk market.
Katharine Moxham, spokesperson for GRiD said: ‘The financial hardship that can follow the death of a loved one can be devastating, and it can impact every area of mental and physical health and wellbeing of those left behind.
‘Employers that offer group life assurance to their staff provide some of the best possible support for wider health and wellbeing. This is one of the most affordable employee benefits, and is also one of the most tangible, and this benefit would have been hugely valued by those that have been affected.’
Impact of the second wave
Overall, in the first half of 2021, the group risk industry supported 1,218 families of employees who died from Covid-19 with group life benefits, this is over 35% more than the 891 families that were supported during 2020.
The total value of group life benefits paid as a result of Covid-19-related claims stood at £125.7m for H1 2021, compared to £93m for 2020.
The average lump-sum payment for Covid-19 related claims for H1 2021 was £98,112.
18% of all group life claims paid by insurers during H1 2021 were related to Covid-19. This is in line with ONS statistics for England and Wales, where for deaths occurring during H1 2021, Covid-19 made up just under 20% of all deaths in the working-age population.
Moxham continued: ‘The increase in payouts shows the impact that Covid-19 continues to have, and how important it is that companies offer employee benefits that provide financial support to their staff, particularly in light of Covid-19, and we urge all employers to consider offering it.’
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- About Group Life Assurance https://grouprisk.org.uk/group-life-assurance
- The group risk market insures 9.88 million people for death benefits valued at 1.43 trillion pounds – Swiss Re Group Watch 2021.
Notes to editors
Lump sum benefits
A total of 6,688 lump sum death benefit claims were paid in H1 2021, of which 1,199 were where COVID-19 has been recorded as a cause of death. Deaths attributed to COVID-19 therefore made up 18% of all lump sum claims paid in H1 2021. A total of £750.2m was paid, of which £117.6m was for COVID-19 related claims. The average lump sum payment was £112,171, the average payment for COVID-19 related claims was slightly lower at £98,112.
Dependants’ death in service pensions
A total of 86 dependants' death in service pension claims were paid in H1 2021, of which 22% or 19 were where COVID-19 has been recorded as a cause of death.
The value of the dependants’ death in service pension claims has been capitalised using a figure of 40 in line with the annual GRiD claims studies. The capital value of all dependants’ death in service pension claims paid in H1 2021 was £48.2m, of which £8.1m was for COVID-19 related claims. The average value of COVID-19 related claims was £425,515 relative to an average of £560,764 for all dependants' death in service pension claims paid in H1 2021.
About the statistics
COVID-19 related group life claims paid 1 January to 30 June 2021
On behalf of GRiD, Gen Re has collected data from group life providers identifying COVID-19 claims paid during H1 2021.
This analysis involved the same ten insurers that have previously provided data at H1 2020 and full year 2020. This is to all intents and purposes a comprehensive analysis of the whole market.
The data collected included the number and value of all claims paid under lump sum and death in service pension schemes between 1 January and 30 June 2021. Claims where COVID-19 is stated as the primary or secondary cause of death on the death certificate or reported on the claim form were reported as a subset of the total.
Given we are reporting claims paid during the first half of the year, and there is an average delay of 50 days between date of death and date of payment, this will capture deaths occurring between November 2020 and May 2021. The impact of the second wave throughout the winter of 2020/21 in the UK will be largely covered.
Claims notification and payment
The weighted average time to notify the insurer of a COVID-19 related death claim was 39 days which is slightly quicker that the delay in reporting death claims for all causes.
The average period from the date of notification to the date of insurance payment was 14 days for COVID-19 related claims versus 19 days for all claims during H1 2021.
For further information please contact:
SMUK Marketing and PR
Mob: 07747 611773
Land: 01252 843350
Spokesperson for GRiD
Mob: 07887 512508
Notes for editors
Group Risk Development (GRiD) is the industry body for the group risk sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their wellbeing and improving employee engagement. Our membership includes insurers, reinsurers, intermediaries and those operating in (or with other interests in) the UK group risk market. Together this forms a collective wealth of experience built over many years. Under the chairmanship of Paul White (head of technical, Howden Employee Benefits & Wellbeing) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry's standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk managed jointly with the Chartered Insurance Institute.
GRiD’s media activity aims to generate a wider awareness and understanding of group risk products and their benefits for employers and employees.
GRiD's dedicated spokesperson, Katharine Moxham, provides expert media comment on a full range of group risk issues.
Follow Katharine Moxham on Twitter @KMoxham