UK Group Risk Is Growing…Will Its Tech Keep Up?

UK Group Risk Has an Ongoing Challenge

The UK group risk market is experiencing steady growth, with encouraging statistics that indicate market expansion and opportunity. In-force policies increased by 3.2% in 2025, to reach 94,675, while the number of people insured grew by 3.7%, to more than 15.7 million. In-force premiums climbed 5.8% to exceed £3.6 billion, according to Swiss Re’s “Group Watch 2025” report.  

The sector’s ongoing challenge is that many group risk insurers are managing their expanding businesses via outdated legacy systems, fragmented technology stacks, and even old-school Excel spreadsheets.

Some of the largest players are still relying on manual spreadsheets to administer complex employee benefits schemes and their claims. This is inefficient and presents significant operational and data risks that are likely to undermine market expansion. 

The group risk industry has also fallen behind its retail insurance counterparts in technology adoption. While retail life and health insurers have largely migrated to integrated, cloud-based platforms, many group risk operations remain on old legacy systems.

The path forward is clear: to benefit from the growth, today’s group risk insurers require integrated, cloud-based modern platforms that can price and manage their offerings across the full value chain.

Growth Meets Growing Pains

UK group risk is becoming more complex, outside of its growth. Employers seek sophisticated, tailored solutions that go well beyond traditional four-times-salary for death payouts. They demand integrated well-being services, flexible benefit options, and personalised coverage that meets diverse workforce needs. The “one-size-fits-all””’ approach across all segments of the group risk market is no longer viable – SMEs will act differently than a large corporation. A modern ecosystem provides choices to the insurer, employer, employee, and employee benefit consultant on how they want to interact with their group risk needs.

Group risk insurers’ service offerings have also expanded to provide virtual GP access, mental health support, vocational rehabilitation, and employee assistance programmes. These value-added offerings are no longer optional extras, but competitive differentiators that employers, and their employees, favor.

Insurers also face mounting cost pressures on multiple fronts. The increase in employer National Insurance Contributions is putting budget constraints on benefit programmes. Healthcare costs are rising significantly, with many employers prioritising private medical insurance spend, which puts pressure on group risk budgets. There’s also a trend toward shorter benefit payment periods for long-term disability income, with policies offering coverage to retirement age declining from 74.1% in 2020, to just 61% in 2024, according to Swiss Re.

Managing these multiple complexities through manual processes and disconnected systems is ultimately untenable.

Legacy Infrastructure is Pricey – 6 Costs

When insurers rely on legacy systems and manual workarounds, the costs extend far beyond IT inefficiency, to include:

• Data risk and compliance exposure: managing policyholder data across multiple systems and Excel files creates data integrity risks. With Consumer Duty requirements demanding that insurers demonstrate value for money and fair treatment, fragmented data complicates compliance and audits. Data entry errors or version control issues could have serious regulatory implications.
• Slow time-to-market: manual processes mean that creating quotes, underwriting new policies, and launching product innovations take considerably longer than necessary. Insurers using modern platforms can respond to consultant requests in hours, rather than days or weeks.
• Limited scalability: the market continues to grow year-over-year and growth managed through manual processes requires proportional increases in headcount. Modern systems enable insurers to scale revenue, without increasing operational costs at the same rate.
• Renewal pricing challenges: renewal season significantly exposes the limitations of fragmented systems. Rating factors, claims experience, and pricing history are often scattered across multiple databases, spreadsheets, and even paper files. When underwriters need to price a renewal, they must manually gather data, both structured and unstructured, from numerous sources, reconcile inconsistencies, and hope they haven’t missed critical information. What should happen at the touch of a button instead takes hours, days, or even weeks of detective work. This delays responses to employee benefits consultants and increases pricing error risk, which can significantly affect profitability.
• Poor customer experience: an insurer needs to provide a hybrid solution that offers choice to the employer and employee on how they want to interact on either an underwriting or claims point. This hybrid provides a balance for the insurers, maximising technology and the human expertise needed to enhance the customer experience.
• Third-party integration gaps: many of today’s group risk insurers’ extensive service offerings come from multiple third-party providers. Without proper integration, employees face disjointed experiences with separate logins, duplicate registrations, and no connection between their wellness activities and their insurance coverage. Insurers require platforms that can seamlessly embed wellness technologies and other third-party services into a unified employee experience.

Our next blog post will explain seven factors that define best-in-class group risk technology. Stay tuned…

See Part II of this blog series, “Seven Factors that Determine Best-in-Class Tech for UK Group Risk.”