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Group therapy

Group risk benefits have long been among the least trumpeted financial incentives offered by employers. That looks about to change as trade body Group Risk Development (Grid) starts a programme of proactive public relations activity for the first time.

The appointment of Katharine Moxham, formerly of Jardine Lloyd Thompson, as the inaugural public face of group risk marks a welcome step in the sector’s desire to self-promote. This move is significant because the perception of the value of group risk products among the public has withered over the years, in no small part due to a lack of media promotion.

Grid has done much valuable work and the creation of a Grid exam is one of many initiatives undertaken by individuals in their own time that are benefiting the whole industry.

But until now the sector has been missing a trick in selling the benefits of what it has to offer all stakeholders. Issues crucial to the financial well-being of the nation – age discrimination legislation or the role of the private sector in welfare reform – have not received the public airing they deserve. The hope is that Moxham and her public relations team can get group risk issues further up the agenda of policymakers, regulators and opinion-formers. At the same time, she is charged with raising awareness of the benefit of group risk cover among employers and employees.

That benefit is real, with more than 7.6 million people receiving death-in-service benefits through the workplace in 2008, according to Swiss Re’s Group Watch report. A further 1.7 million employees are covered by group income protection policies. Without this valuable employer-sponsored support, the nation’s protection gap would be even higher than it is already.

The current economic environment has made it easier than ever for employers to slash benefits, making the public perception of group risk products even more urgent. Employers are not only cutting back on final-salary pensions but also on defined-contribution arrangements. If employees do not understand and value the group risk benefits they already possess, they will be an easy target at the next round of cost-cutting.

A key objective for Moxham will be bringing to the attention of policymakers the real benefits that group risk insurers and intermediaries can offer UK plc. Getting the voice of the group risk community heard before laws, rules and regulations are forged should benefit both the industry and the companies it serves.

This is not something that has happened effectively in the past. A more accommodating position from Government on age discrimination, for example, could have made a real difference to the number of UK citizens who would ultimately benefit from income protection cover through the workplace.

Looking to the future, one idea Moxham is keen to push is contracting-out for income protection. If firms offering decent pension schemes can be assisted in doing so by receiving the National Insurance contributions that would have gone towards state pensions, why shouldn’t employers offering protection to workers that would otherwise be paid by the state? The Government is trying to foster a culture of vocational rehabilitation so why not incentivise the private sector to offer it?

The group risk landscape may not change overnight but, with a fair wind, Moxham and her team should soon be giving the group risk sector the public voice it deserves.

John Greenwood is editor of Corporate AdviserMoney Marketing


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