Britain's business leaders are falling far short of employee expectations when it comes to providing group health and income protection insurance schemes.

Employers are increasingly being viewed as the natural successor of the welfare state by their employees, who look to them to ensure they are protected against any health and financial setbacks.

New research shows that bosses have a surprisingly benign attitude towards their employees.

Two in every three bosses feel responsible for their employee's health and well-being while one in three employees would depend on their company to provide for them if they became ill or injured.

However, this is not backed up by evidence on the ground. Just one in five employers offers private medical insurance and only one in ten offers income protection even though 25% say employers should be obliged to provide it.

There is also evidence that employees are becoming more demanding with 80% saying their employers should look after their health and financial well-being.

The research was carried out by Norwich Union Healthcare amongst 550 executives in companies with turnover between £50,000 and £1 million.

Norwich Union, which has a substantial presence in the private healthcare sector, says there is often a practical divide between what employers and employees expect of each other.

"There is a great deal of disparity between the two," said Norwich Union Healthcare spokesman Andy Parker. "Workers want employers to help them and their families in case of illness or injury and, in that respect, the company is replacing some aspects of the welfare state."

The survey was carried out to promote company cash plans. Norwich has just launched a new range of plans aimed at providing employees with a broader range of healthcare benefits.