Aon Consulting reports that although premium costs for perks such as life assurance, critical illness and income insurance became cheaper in 2008, 57% of insurers and reinsurers think the cost of death-in-service pensions is set to increase.
Almost a third (29%) think the cost of group critical illness cover will go up while 58% think it will stay the same. The survey also shows 43% think the cost of death in service will remain static.
But half of the respondents think premiums for lump sum life cover will go down in price and only 12% think costs will rise.
Overall nearly everyone surveyed said the number of schemes - and the income into the market - would go down in 2009 from last year's level, as employers cut back on employee benefits.
Paul White, head of risk benefits consulting at Aon Consulting, said: "Underwriters are telling us that they are going to be fighting harder than ever for every pound of premium because they expect the market to become more and more competitive.
"Although the underlying factors will mean insurance premium rates are tipped to rise in the short term, market competition may mask these factors. In addition, there are still savings to be made - particularly if companies can show evidence of a culture of seeking to manage risks and take action to control claim costs, from wellness strategies to active absence management programmes."
Employers likely to be hit by increased insurance and risk benefit premiums
Employers could face higher cost on insurance and risk benefits as premium rates are predicted to increase.
