Employers in the UK face
significant increases in the cost of providing employee benefits
such as life, critical illness and income insurance. This warning
comes from consultancy Aon Consulting following completion of its
annual survey of insurers and reinsurers that provide group risk
benefits in the corporate market.
“Employers and employees have had a
relatively good ride recently with the cost of some of the most
basic employee perks decreasing,” said Paul White, Aon Consulting’s
head of risk benefits consulting. “However, this year we are seeing
more consensus among insurers that costs are likely to
increase.”
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Aon Consulting’s survey, which
covered a combined group risk market worth £1.5bn ($2.3bn) of
premium found that:
Aon Consulting stressed that
insurers will be walking a fine line between maintaining market
share while ensuring they remain profitable.
However, the consultancy believes that decreasing rates and
inflationary pressures over the past few years have eroded profit
margins to such an extent that it is far more likely insurers will
need to focus on increasing margins.
