Employee Benefits UK: 2025 Trends, Q3 Insights & Tips 

This insight is taken from our latest Employee Benefits Market Update – download the report for free here.

Prices for PMI are still rising, though at a slower pace than before at +13.4%, compared to +15% in our March report. PMI claims volumes are also rising across both age-rated and claims-rated schemes, mainly due to mental health, cardiovascular, and musculoskeletal conditions. Claim severity is increasing in claims-rated schemes, driven by cancer, cardiovascular, and digestive issues, while cancer is the main cost driver in age-rated schemes.

Group Protection pricing is largely stable with lower increases seen across certain markets. Group Life sees a +0.6% median average rate change, whereas Group Income Protection and Group Critical Illness reports +/- 0% median average rate changes.

Group life assurance claims volumes declined for both small and medium enterprises (SMEs) (under 250 employees) and corporate schemes (over 250 employees). While claim values are decreasing for SMEs, they are rising among corporate clients. Heart and cancer claims remain steady, but stroke claims increased for SMEs. Both SMEs and corporates are seeing a rise in claims related to suicide.

Group income protection claims volumes remain steady overall. Mental health claims are falling for SMEs, possibly reflecting earlier support from insurers. Cancer claims are rising for SMEs, matching trends seen in the PMI market, but are decreasing among corporates. Claims for musculoskeletal conditions decreased across all scheme sizes, potentially reflecting the positive effect of early intervention programs.

There was no change to group critical illness claims volumes or values reported by our insurer partners.

The demand for and use of private dental treatment continues to grow.

• +5.5% increase in claimants.
• +7.8% rise in how often claims are made.
• +9% rise in provider fees.

To keep dental care affordable and meet customer needs, private dental providers have been proactive. They have updated benefit allowances to keep pace with inflation, focused on preventative care as well as treatments, and used the latest technology to make the claims process quicker and easier for everyone.

Corporate cash plans saw the fastest growth among all workplace health and protection products.

The latest industry figures from Corporate Adviser stated that during 2023 employee coverage rose by 14.8%¹ with nearly two million employees now benefiting from these plans. 2024 data is yet to be realised, but industry conversations elude to continued growth.

Despite this progress, our 2025 Health on Demand research shows that 70% of full-time employees still lack medical coverage. This highlights an opportunity for affordable, easy-to-access options, like cash plans, to help bridge the gap.

^{Please note, the information contained herein has been obtained from a range of third-party sources and may change in the future. Rate indications are based on MMB's book of business. Premiums can be impacted by membership and benefit changes. While the information is believed to be reliable, Mercer Marsh Benefits has not sought to verify it independently. As such, Mercer Marsh Benefits makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential or incidental damages), for any error, omission or inaccuracy in the data supplied by any third party.}

Footnote

1. https://corporate-adviser.com/workplace-protection-and-wellbeing-report-2024-providers-with-strongest-growth-named/