Businesses are seeing budgets stretched in many ways, but, as Owain Thomas found, advisers who are creative with solutions could produce a windfall for themselves in the group critical illness market
Dave Kay, commercial product manager at Unum, was not certain why this had happened, but suggested a variety of factors may be at play.
"It is possibly due to the systems involved and doing it on a large scale," he said.
"CI is not a core benefit for employers, and for providers it's the third product in the armoury.
Certainly, 80% of our claims come from the big three conditions (cancer, stroke and heart attack) and the focus that IFAs have looking at conditions hasn't translated to those in the group market.
"They generally realise that those illnesses covered by a group policy cover 99.9% of claims that come along," he added.
So it seems unlikely that the group market will go the way of the individual one. And as Kay concurred, group CI lacks the higher profile that both employers and providers need to substantially increase its reach.
But what can be done to make it more of a core benefit? Crucially, Kay indicated that tax issues can block ideas, such as Pickard's, from working.
"If we linked the payment with something such as incapacity only paying if the person was unable to work and so could be paid to aid treatment costs that could work," he said.
"But there are some tax issues around that, and we think GIP does that job better than CI anyway. We're restricted by regulations in play with the group market that prevent CI being bundled with a life product, so it is quite difficult to create a product that's got strong employer appeal."
A suggestion that comes to the fore is filling a loophole currently appearing in the PMI world over cancer treatment.
With costs for treatments and drugs soaring, some insurers are questioning the level to which they wish to support this aspect.
Here, Kay identified a potential niche for group CI to provide a discrete benefit to obtain high-priced cancer drugs that are hard to get on the NHS, but did question how strong the demand would be.
He concluded by suggesting the whole group risk market will see a more flexible approach to its funding in future.
"We see a shared approach to cost as the direction in which the market will go, as well as a growth in not just flexible programmes, but group risk arrangements where there is a shared range of funding between employer and employee."
