Employee Benefits UK: Trends for 2025, Q2 Insights & Tips
The Reciprocal tariffs, Scattered Spider cyber-attacks, and UK Supreme Court ruling on gender have hit the headlines in Q2, 2025. Here are the latest pricing and claims trends that we at Mercer Marsh Benefits (MMB) are observing across several key coverage areas.
Group Private Medical Insurance (PMI)
Prices for PMI are still rising, but at a slower rate than previously reported. Claims activity meanwhile is growing overall, especially in muscular skeletal and cancer conditions. However, some of the rising costs associated with these claims are now stabilising.
In the context of employee benefits UK, employers should consider how offering comprehensive health insurance benefits, including PMI or other more cost effective solutions, can support employee wellbeing and enhance employee engagement.
Group Life Assurance
Group Critical Illness
Group Income Protection
Overall, the market is reporting lower pricing for income protection insurance. The market is experiencing a stabilisation in claims activity and claim values. This trend is evident even within the key claims areas of cancer and mental health support.
Please note – pricing and claims trends in accordance with confidential industry data obtained from Mercer Marsh Benefits insurer partners.
Frequently asked questions this quarter:
Implementation of mandatory real-time P11D reporting has been moved from April 2026 to April 2027 to give employers more time to prepare.1
On 15 April 2025, the Supreme Court ruled that a woman is defined by biological sex under the 2010 Equality Act.4 This raised questions for clients with group protection schemes and PMI. Although the Act prohibits discrimination based on protected characteristics, including gender, there are specific exceptions for these types of group arrangements. These exceptions allow insurers to consider gender and age when pricing group policies.
This is permitted provided that specific conditions are met. Therefore, employers must still provide full membership details, including birth gender.
The long-term effects on the UK economy remains uncertain, but insurers are monitoring the situation. For PMI, claims incidences have risen due to NHS access issues and easier access to private care, resulting in increased pricing already being seen. Major hospital groups do not anticipate immediate impacts. However, global trade and any impact on wider inflation could eventually affect costs.
For group protection, premiums are based on clients' claims experience or broader mortality and morbidity factors, which change little over time. Currently, insurers do not see recent developments affecting pricing. For pension schemes, their long term nature means they should have the ability to ride out any immediate volatility, with some recovery already being seen.
- Market Development Leader, MMB UK