Employers shift from buying more benefits to making existing protection work harder

Demand for employer-backed protection remains strong despite signs of slower growth elsewhere in the UK health market, according to Aviva’s latest half-year results.

The insurer reported that protection sales increased by 1 per cent in the first half of 2026, driven by strong new business sales in Group Protection, although this was partly offset by lower Individual Protection sales.

At the same time, Aviva said health sales fell to £51m, down from £76m in the same period last year, reflecting slower market growth and what it described as trading discipline in consumer and SME channels.

Health in-force premiums still increased by 5 per cent to £1.1bn, which Aviva said was driven by pricing actions ahead of inflation.

The results suggest a mixed picture for the wider health and protection market, with employer-sponsored protection continuing to attract demand while growth in some areas of private healthcare appears to be moderating.

For employers, the distinction is important. Group protection products can play a central role in workforce health strategies by providing financial and practical support when employees experience serious illness, disability or long-term absence.

They also sit alongside a broader shift towards employer-funded access to healthcare, as organisations increasingly look for ways to support earlier intervention, reduce absence and help employees remain in or return to work.

Aviva said it continues to see Health and Protection as one of its longer-term growth areas, although it has lowered its expectations for Health in 2026.

The insurer said: “In health, with slowing market growth in consumer and SME channels, we now expect operating profit for 2026 to be c.£90m. We will continue to invest in the business to capture this attractive long-term growth opportunity.”

The results also showed continued growth in Aviva’s workplace pensions business. Wealth net flows increased by 32 per cent to £7.6bn, driven partly by growth in Workplace and the onboarding of initial transfers from the Mercer Master Trust.

Aviva said it expects Workplace growth to remain strong through the rest of the year, with further Mercer Master Trust scheme flows anticipated before the end of 2026.

The figures come as employers continue to reassess the role of benefits in supporting workforce health and financial resilience. Stronger demand for Group Protection may indicate that businesses are continuing to prioritise support around long-term illness and absence, even as parts of the wider health insurance market become more cautious.

Barry Waring, founder of BW Consulting, who has spent all of his career working with employee benefits brokers, said the figures reflect a wider conversation taking place among employers about getting greater value from existing health and protection provision, rather than simply adding more benefits.

He said: “Cost pressures for employers have not gone away, but they are forcing a more useful conversation about value and utilisation rather than simply what gets cut. For years, additional services attached to protection products were often treated as freebies and rarely scrutinised. Covid changed that. Employers started looking more closely and finding they might have three virtual GPs, two EAPs and a wellbeing app, with significant overlap and little clarity about how it all fitted together.

“Now the Keep Britain Working agenda, and the £212bn cost associated with ill health among working-age people, is pushing the conversation further towards prevention. What I am seeing from good advisers is less about telling employers to buy more and more about helping them understand and make better use of what they already have.

“The opportunity is to look at benefits as an ecosystem covering protection, prevention, recovery, physical and mental wellbeing, and financial resilience. In many cases, employers already have provision across those areas. The challenge is joining it up, identifying the gaps and making sure employees actually know what support is available to them.”

Aviva reported group operating profit of £1.326bn for the first half of 2026, up 24 per cent year on year.