Swiss Re’s latest Group Watch figures confirm that employers with fewer than 250 staff, not large corporates, now drive most of the UK group risk market’s growth. Advisers who still pitch this cover as a big-employer product are leaving SME clients underserved.
In reading this article you will understand:
- Why employers with fewer than 250 staff now account for the large majority of UK group risk schemes and a growing share of new business, according to Swiss Re’s Group Watch 2026 data.
- What is driving SME take-up now, from April 2026’s statutory sick pay reform to the Keep Britain Working Review and the cost gap between group risk and private medical cover.
- How to approach group risk differently with SME clients, given the awareness gap GRiD’s own research has identified among smaller employers.
Employers with fewer than 250 staff now account for more than nine in ten in-force group risk schemes in the UK, and a growing share of the new business insurers write each year. That is the clearest finding in Swiss Re’s Group Watch 2026 report, published April 2026 and covering the 2025 policy year: in-force policies grew 1.4% to 96,006, lives covered across life, income protection and critical illness rose 3.5% to just over 16.2 million, and small and medium-sized employers, not the large corporates this product is still widely assumed to serve, were doing most of the buying. For advisers who specialise in corporate clients, that assumption is out of date.
The Numbers Behind the Shift
Group Watch, compiled from data supplied by the insurers writing most UK group risk business, is the industry’s most reliable gauge of the market’s shape. The 2026 edition shows growth continuing, if more slowly than the year before: in-force policies grew 1.4% in 2025, against 3.2% in 2024, as employers absorbed April 2025’s rise in employer National Insurance contributions by trimming benefit design, shorter cover-to-retirement periods and fixed benefit terms, rather than by cancelling cover outright. Group death benefit cover still grew strongly, up 6.5% to almost 12 million lives, and group critical illness reached 888,040 lives, up 5.7% overall and 6.5% like for like. Group income protection dipped 1.6% on a total basis, though the like-for-like figure showed underlying growth of 2.6%.
The SME share of that market is its structural centre, not a marginal detail. Swiss Re’s figures, as reported by Corporate Adviser, show more than 90% of in-force schemes covering fewer than 250 employees and accounting for around 60% of total in-force premium. Swiss Re’s first attempt at tracking new-to-market business separately, reported in August 2026, tells the same story from a different angle. Schemes new to the market accounted for 4.3% of in-force group life schemes, 4.6% of GIP schemes and 5.9% of critical illness schemes, adding more than 170,000 employees to newly written cover over the year. Those are minimum figures, drawn from providers representing 72% of all in-force schemes. This is not a one-year blip. SME-dominated scheme counts were already the norm in 2024, and GRiD’s claims survey shows the sector paid out a record £2.69 billion in group risk claims in 2025: roughly £1.8 billion in group life, £671 million in GIP and £191 million in critical illness.
What Is Driving SME Take-Up Now
Three forces are pushing group risk up the SME agenda at once. The first is regulatory and immediate. from 6 April 2026, reforms under the Employment Rights Act 2025 removed both the lower earnings limit and the three waiting days from statutory sick pay, so SSP is now payable from the first day of any qualifying absence and reaches employees who previously fell below the earnings threshold altogether. For a small employer with no group income protection in place, that is a real, immediate rise in the cost of managing absence.
The second is the Keep Britain Working Review, the independent review led by Sir Charlie Mayfield into how employers can do more to prevent staff falling out of work through ill health, which reported in November 2025 and is now moving into implementation. GRiD’s research puts overall employer awareness at 75%, but that hides a sharp size gap: 86% among employers with 250 or more staff, against just 45% among micro-businesses with ten or fewer. Plenty of smaller employers are already buying group risk cover without connecting it to the wider policy conversation their adviser could be having with them.
The third is more practical. Brokers quoted in Corporate Adviser’s reporting on the SME market describe group life cover as an affordable, stable-cost entry point next to the more volatile pricing SME employers now see on private medical insurance, and describe rising interest in the added-value services, digital GP access, mental health support, digital physiotherapy, bundled in at no extra premium, as faster help than an overstretched NHS can offer.
The Advice Gap Advisers Can Close
Set the in-force market against the size of the addressable one and the opportunity looks rather different. The Department for Business and Trade’s 2025 business population estimates put the number of UK private-sector businesses that actually employ staff, as distinct from sole traders, at around 1.42 million. Against that, 96,006 in-force group risk policies is a small fraction, even allowing for employers running more than one scheme and for the minority that are large corporates. There is no single published figure for what proportion of SMEs carry no cover at all, and it would be misleading to manufacture one, but the gap between those two numbers is an honest measure of how much of this market remains unaddressed.
GRiD’s spokesperson Katharine Moxham frames the barrier plainly: employers don’t know what they don’t know. That is an advice problem rather than a product one. It is worth being realistic about the underwriting, though. Cover is normally underwritten on the scheme as a whole, but free cover limits scale with scheme size, so the smallest schemes have the lowest limits and are the most likely to need individual medical evidence. That is a conversation to have upfront with a client rather than a surprise to spring at quotation stage. Consumer Duty adds a narrower reason to raise it now. It does not govern the sale of the policy to the employer, but it does apply to how insurers treat members: disclosures, claims support and the fair value members receive. That puts a premium on exactly the added-value services SME employers already ask about.
What It Means for Advisers
For a client bank that has never had a group risk conversation, this calls for a different opening line rather than a new specialism. Absence cost, not insurance, is the way in. the SSP reform and the Keep Britain Working Review both give a concrete, dated reason to ask what happens, financially and operationally, when an employee is off sick for an extended period with no cover in place. For clients who already hold a scheme, the same conversation is a review trigger, checking whether cover has kept pace with headcount and whether the added-value services are being communicated to staff at all, since a benefit nobody knows they have delivers none of its wellbeing or retention value.
The evidence rules out one excuse: that group risk is a large-employer product not worth raising with a thirty-person client. Keep treating SME group risk as a niche add-on rather than the part of the market actually driving growth, and you concede ground to whichever adviser gets to that client’s absence cost conversation first.
Things to reflect on for CPD
- How many of your SME clients would know, today, what an extended staff absence with no group risk cover in place would cost them under the new day-one SSP rules?
- Which of your existing SME group risk schemes have not been reviewed against current headcount, benefit design or added-value services since they were first set up?
- How would you introduce the Keep Britain Working Review, and what employers are now expected to do off the back of it, to a smaller client who has never heard of it?
- Where in your client bank are you still assuming group risk is a large-employer conversation rather than an SME one?
