“Generating new business in today’s environment is becoming increasingly challenging, so any ways in which business can explore and leverage existing relationships makes sense.”
But it might not be that straightforward. Moxham says: “Where you have group risk on a flat rate basis, the insurer and adviser wouldn’t know who’s in and who’s out.”
Is it worth trying to overcome such issues somehow? Should portability become a feature of the group protection market?
Cura Insurance managing director Alan Knowles agrees that insurers and advisers find out too late, if at all, to notify the departing employee of the lost benefit and seek new cover.
Wheatcroft suggests that annual statements could be useful here, adding that it would be good to see the requirement for a day one statement of sick pay arrangements — a requirement for new employees — extended to all staff and updated whenever sick pay arrangements change; company provided or state provided.
“In that way, they might get better awareness of what’s being given up on leaving,” he adds.
Knowles says that the ability to “port” cover to a new employer or even to personal cover would be great in an ideal world, but the problem is that most group policies are issued without any underwriting. This is great for groups, for all the reasons referenced earlier. But issues would arise if group insurers were to offer a portability option, because the individual would have to be underwritten at the stage.
He explains: “If a departing employee were to port cover and make it personal, the insurer would be covering a single person and it’s very unlikely they’d want to do this without underwriting them to check for pre-existing health conditions. In my opinion, this would be a big barrier to the portability of group schemes to individual.
“Some customers might not mind being underwritten, but what would be the benefit of having a group policy turned into a single plan if they are going to underwrite and potentially apply exclusions? The customer may as well just buy a new individual plan.”
Meanwhile, how to reach and support the small and medium-sized enterprise market appeared as a recurring theme in discussions with our experts.
“How can protection, typically built for larger organisations, be adapted and flexed to meet the differing and diverse needs of 90 per cent of UK businesses [SMEs]?” asks Harper.
