UK Employee Benefits trends: pricing and claims  

Pricing for group private medical insurance continues to increase but at a much slower rate than previously:

• +5% across claims rated schemes (down from a 6% increase as of July 2026).
• +8% for age-rated schemes (up from 7% as of July 2026).

This quarter, many employers are becoming more open to adjusting plan design to strike a better balance between affordability and employee value.

Encouragingly, retention remains strong, suggesting employers still see PMI as an important benefit. For those maintaining full cover, the priority should be to manage rising treatment costs while regularly reviewing whether the current level of cover remains sustainable.

The average cost per claimant is £2,012 (a 5% rise since the first quarter of 2026), with around one in three members filing a claim.

Overall, claims are starting to level out, but some pressure points remain. While mental health claims have eased slightly, cardiac claims have risen, and high-cost claims are increasing across all major conditions.

This means employers should look beyond claim numbers alone and pay close attention to where overall costs are rising. Regular reviews of plan design, cost drivers, and employee support can help address pressure early and protect long-term value.

Clear mental health support and wider wellbeing strategies can also help employers support employees before absence becomes more complex.

Use this period of relative stability to review claims trends, spot emerging cost pressures, and consider whether plan changes, clearer member communications, or wellbeing support could help maintain sustainable cover.

Encouraging the use of direct treatment pathways can also help manage costs. Claims analysis can support more informed decisions about plan design and employee support.

Pricing for group income protection insurance is decreasing:

• -4% across medium and large corporate clients (down from -2% as of July 2026).
• -4% for clients with fewer than 250 insured lives (down from -2% as of July 2026).

While pricing remains competitive, fewer schemes are being reviewed. Where employers are testing the market, some are choosing to move providers to secure better terms.

Group income protection claims are rising across all major conditions, including mental health, musculoskeletal issues, cancer, and cardiac conditions. Claim costs are also increasing, which may point to higher earners making up more of the claims mix and could lead to future pricing pressure if the trend continues.

One encouraging sign is that more employees are using early intervention support and accessing help sooner. So far, though, this does not appear to be improving return-to-work outcomes before the deferred period ends.

These are ongoing challenges for HR and benefits teams, particularly where absence creates operational and financial pressure.

Employers should keep a close watch on claims and early intervention usage to better understand what is driving absence and cost. Reviewing plan design, case management, and rehabilitation support may help improve outcomes and reduce future pressure on pricing.

Line managers also play an important role, as they are often the first to spot when an employee may need support. A joined-up HR and benefits team can use this insight to help make better decisions about support and return-to-work planning.

Employers should take advantage of the current soft market for income protection by undertaking market reviews.

Pricing for group critical illness insurance remains stable. At the same time, fewer employers are reviewing their critical illness cover, even though some insurers are still increasing rates at renewal. That may mean some employers are missing the chance to test the market and secure better terms.

Group critical illness remains a smaller and relatively stable market, with little overall movement in claims volumes or costs. Cancer claims have edged down slightly, while neurological conditions such as Multiple Sclerosis, Motor Neurone Disease, and Parkinson’s are showing some growth, mainly in the small and medium-sized enterprise (SME) market.

Even where claims experience looks stable, employers should review critical illness cover regularly to make sure pricing remains competitive and the benefit still meets workforce needs.

Pricing for group life assurance is stabilising:

• +/- 0% across medium and large corporate clients (no change from July 2026).
• -2.5% for clients with few than 250 insured lives (no change from July 2026).

Group life claims numbers are generally falling across the main conditions we track, including heart disease, cancer, stroke, and suicide. Overall claim values are broadly stable, although some providers are seeing higher cancer claim values and lower stroke claim values.

This suggests employers should continue to keep an eye on both claims trends and the changing profile of members claiming. Market review activity remains steady, and while most employers are not making major design changes, some are still switching providers when they test the market.

Employers should regularly review claims experience, pricing, insurer performance, and benefit design to make sure cover remains relevant, competitive, and cost-effective. With some providers updating their added-value services during 2026, this is also a good time to check whether new services add real value or simply duplicate support already in place.

This can help an organisation manage risk while ensuring that benefits support its wider total reward approach.

Claims patterns have remained broadly consistent, with dental and optical services accounting for most usage. Prescription claims have seen the strongest growth among the major benefit categories over the past few years. By contrast, chiropractic and osteopathy claims have gradually declined, which may suggest a shift in treatment preferences within musculoskeletal care.

At the same time, providers continue to invest in digital tools, broader benefit design, and smoother claims experiences. Improvements to apps, administration, and reporting are helping make cash plans easier to manage and easier for employees to use.

Digital tools can reduce routine administrative tasks and help employees use their benefits more effectively.

Employers should use this as an opportunity to review whether their current cash plan still delivers the right value for both the business and employees. Market testing, reviewing provider service, and assessing digital capabilities can help ensure the benefit remains competitive, relevant, and easy to use.