Key Employee Benefits Trends for 2025: Insights & Tips
The employee benefits trends market continues to experience high levels of activity. Here are the latest pricing trends that we at Mercer Marsh Benefits (MMB) are observing across several key coverage areas. Plus, some top tips to help you navigate the market and enhance your benefits strategies.
1. Group Private Medical Insurance (PMI)
In 2024, we observed an average increase of 23% in premiums for health insurance. However, early indications for 2025 renewals suggest a more moderate rise of approximately 15%. While this is encouraging, it is important to recognise that we are still early in the year. Variations may occur from one business to another. Notably, some age-rated schemes are experiencing significantly higher increases.
As organisations work to remain competitive, it is essential to understand your claims drivers. This understanding is particularly important in today’s competitive talent market. Additionally, prioritising mental health support can significantly enhance employee satisfaction and wellbeing.
Top tips:
- Conduct a benefits inventory to identify overlapping benefits across all product types.
- This process can reveal potential savings opportunities.
- A deeper understanding of your claims drivers will help focus on preventative solutions.
2. Group Critical Illness
In 2025, we have observed significant increases in insurance rates, averaging 24%. However, given the smaller size of this market, the effect of a few providers will be more pronounced.
The entry of a new provider in the Group Critical Illness market is expected to enhance competition and contribute to lower rates. This development is crucial for organisations aiming to offer a comprehensive benefits package that effectively supports their employees.
Top tips:
- Regularly promote this benefit to help mitigate increases in insurance rates.
- Gain a thorough understanding of your workforce's demographic health risks and needs.
- This understanding should cover prevention, diagnosis and management of chronic illnesses.
3. Group Life Assurance
Insurance rates for both 2024 and so far in 2025 are indicating increases of around 8%. However, organisations can still achieve savings through market reviews. Competition among providers remains robust.
This approach is vital for organisations aiming to enhance their benefits administration. It also ensures that they provide adequate support for employee financial health.
Top tips:
- Conduct market reviews to identify potential savings, leveraging strong competition among providers.
- Understand how sick employees impact the cost of this benefit.
- Put in place health and wellbeing interventions to mitigate long-term risks.
- Use insurance as a tool to provide extra support to employees. Particularly in financial education and work-life balance.
4. Group Income Protection
Top tips:
- Make proactive use of available claims rehabilitation services to reduce the incidence of claims.
- This will enhance the cost-effectiveness and appeal of your policy in the market.
- This is crucial in a landscape where diversity, equity, and inclusion are vital for employee satisfaction.
