The UK group risk sector paid a record £2.69 billion in claims in 2025, which is the equivalent of £7.36 million every day, according to new data from GRiD, the industry body for the group risk sector.
The figure represents an increase of £96.7 million on 2024's total, and comes as employers offering group risk benefits, which encompass employer-sponsored life assurance, group income protection (GIP) and critical illness cover, reported that 68% of newly absent employees had returned to work by year-end.
Of the 5,590 employees absent through ill-health who were helped back into the workforce during 2025, 3,920 returned before a claim was made, following early intervention from their insurer. A further 1,670 who had already lodged a GIP claim also returned to work before year-end.
Group risk insurers made nearly 8,300 health and wellbeing interventions across 2025, with 5,915 occurring within six months of an employee's first absence. Mental health was the most common driver at 48% of interventions, followed by musculoskeletal issues at 11% and cancer at 9%. A further 848 employees who became new GIP claimants during 2024 had also returned to work by the end of 2025.
Katharine Moxham (pictured), spokesperson for GRiD, said: "It is great to see just how much employers and employees benefit from the tangible and practical support from group risk benefits. Good work is good for people, and of course, employers need a present workforce to function, and our data shows just how much group risk supports this."
The findings carry particular weight given the current policy climate. The UK government's Keep Britain Working Review, led by Charlie Mayfield, found that one in five working-age adults is currently out of work, with poor health the leading cause of economic inactivity, costing the economy more than £200 billion a year.
The scale of the challenge has grown sharply: before the pandemic, 2.8 million working-age people were claiming benefits due to ill health or disability; by August 2025, that figure had climbed more than 40% to 4.5 million. Against that backdrop, the GRiD data makes a pointed case for employer-sponsored benefits as a structural solution, not just a workplace perk.
"A strong economy needs a strong and present workforce - hence the focus from government with initiatives such as the Keep Britain Working Review. Our new data shows again just how important group risk benefits are in supporting a strong economy, and employers who offer these benefits to their workforces are the winners," said Moxham.
Group life assurance drove the bulk of total claims, paying out £1.825 billion across 12,730 claims, an increase of £88.9 million on 2024. Group income protection policies paid £670.7 million across 17,403 claims in payment, a modest decrease of £3.8 million year-on-year, with 7,920 new GIP claims lodged during 2025 averaging £29,026 per claimant. Group critical illness policies paid out £190.8 million across 2,475 claims, up £11.6 million on the prior year.
Cancer was the leading cause of new claims across all three product lines, reflecting both its prevalence and the financial severity of a diagnosis. It accounted for 33% of new group life assurance claims, ahead of ischaemic heart disease at 15%.
For group income protection, cancer represented 28% of new claims, with mental illness second at 20%, a figure that underlines the scale of the mental health challenge in the working-age population. In group critical illness, cancer drove 69% of new claims, followed by heart attack at 9%.
The GRiD data sits against a broader picture of sustained but pressured market expansion.
According to Swiss Re's Group Watch 2025 report, in-force group risk policies grew 3.2% to reach 94,675 in 2024, the number of people insured rose 3.7% to more than 15.7 million, and in-force premiums climbed 5.8% to exceed £3.6 billion. Smaller employers have emerged as an engine of growth, debunking the perception that group risk is a benefit reserved for larger organisations.
The market nonetheless faces structural challenges on two fronts. From 6 April 2025, the employer NIC rate rose from 13.8% to 15% and the secondary threshold was reduced from £9,100 to £5,000, placing tangible pressure on benefits budgets. Swiss Re's head of group risk UKI, Keith Williams, described those headwinds as undeniable.
Separately, Swiss Re's technical manager Ron Wheatcroft flagged a growing trend towards shorter benefit payment periods in long-term disability income cover, a shift he warned could place significant pressure on the welfare state if employees exhaust policy benefits before returning to work.
Industry respondents nonetheless view the policy environment as a commercial opportunity. The Keep Britain Working Review's emphasis on early intervention and employer-led support aligns closely with the rehabilitation infrastructure already embedded in group income protection, and insurers have been broadening their propositions to include virtual GP access, mental health support and vocational rehabilitation alongside traditional cover.
