ProtectionJan 22 2016

Occupational hazard

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Occupational hazard

But, with these services used to a much lesser extent in the individual IP market, it could be worth making them a more prominent part of the product proposition.

In the group market, these rehabilitation services take many forms. Typically run by a case manager, often with a nursing or vocational rehabilitation background, they will seek to understand the nature of the employee’s condition and find ways to help them return to work.

This could be through treatment, with the insurer looking to source necessary interventions through other employee benefits, such as private medical insurance or counselling on the employee assistance programme; the NHS; or, in some instances, funding it on behalf of the employee.

The case manager will also work with the employee and their employer to resolve any workplace issues that may be contributing to the absence and, where appropriate, help them agree a return to work plan.

In some cases, they may also recommend adjustments to the employee’s duties or role to enable them to return to work. This could include working reduced hours or returning to a less stressful role within the organisation.

Early start

Early intervention is often key to the success of rehabilitation. “The earlier someone can start focusing on a return to work the better,” explains Paul Avis, marketing director at Canada Life Group Insurance. “After as little as four weeks’ absence an employee can begin to disengage with the workplace, making a return to work much less likely.”

This is demonstrated by claims figures from Canada Life. Without any intervention, 80 per cent of its mental health claims lasted for two years or more. But where the insurer was able to provide support at an early point in the illness, 80 per cent of claims lasted less than seven months.

Further, in some instances, early intervention prevented claims altogether. The insurer found that 86 per cent of the cases that were referred to it within the first few weeks of absence did not result in a claim. Although some were spurious claims, the majority of those that did not reach the end of the deferred period were resolved by the case manager, enabling the employee to return to work.

Benefits for all

This approach brings benefits for all parties. Although the insurer may find itself dealing with cases that might never become claims, by working in this way the length – and cost – of claims can be significantly reduced.

The employer and employee also benefit. The employee can enjoy the financial benefits of being employed while, for the employer, they are able to retain an experienced member of staff but also realise savings on temporary cover and the recruitment costs they may have incurred if the individual had been unable to return. Roy McLoughlin, partner at Master Adviser, is a big fan of rehabilitation. “Everyone loves it,” he says. “HR people have so many responsibilities around employee health and especially stress and mental health. They really appreciate being able to turn to an insurer for this support.”

Although there are plenty of advocates for these services, the evidence for its effectiveness has been largely anecdotal. However, last December research commissioned by Zurich was able to attribute some monetary values to it.

The report, ‘Income Protection and Rehabilitation – Working Together’, written by independent economist Kyla Malcolm, valued the support provided by rehabilitation at around £110m a year. This equates to a return on investment of £16.80 for every £1 spent.

Of this £110m, £74m directly benefits a range of stakeholders. These are employees, who are able to return to work (£5m); employers, through savings on occupational sick pay (£17m); insurers, through reduced claims payments (£25m); and the taxpayer, who benefits through lower welfare payments and higher tax revenues (£27m).

The remaining balance – £35m – is made up of indirect savings. These include expenses such as temporary staff to cover absence, lower productivity while an employee is unable to work, and training and recruitment if they need to be replaced.

Individual lag

While the group market has a good track record of helping employees return to work, the individual market has been much more tentative around offering this form of support. Robert Harvey, senior adviser at Drewberry Insurance explains, “Most providers of individual IP offer some element of rehabilitation cover, which usually takes the form of a proportionate benefit payout if the claimant is able to return to work on reduced hours or pay. Many also provide a range of additional policy benefits, which can provide support when someone is unable to work, but these are nothing like the services offered by the group insurers.”

As examples he points to Friends Life’s Counselling and Carer Support Services, which provide access to telephone and face-to-face counselling; LV’s care line, which also offers counselling and health advice; and Royal London’s Helping Hand service, which he flags as one of the more comprehensive additional benefits. This offers a broader range of services including a personal nurse adviser, bereavement counselling, complementary therapies to assist recovery and access to personal, legal and medical helplines.

There are reasons why the individual IP insurers are trailing the group market when it comes to rehabilitation. Nick Homer, corporate propositions manager (group protection) at Zurich, explains: “On group IP, the policyholder is the employer and therefore has a vested interest in helping the employee return to work as quickly as possible. With individual cover, although the desire to help someone get back to work is still there on the insurer’s side, the policyholder does not tend to notify their insurer of a claim until the end of the deferred period, when the chances of using rehabilitation effectively can diminish.”

As a deferred period on an individual IP policy can be as long as 156 weeks, the issues for rehabilitation are clear.

Removing barriers

McLoughlin believes this situation could be addressed. “Advisers should promote these services much more when they recommend IP to their clients,” he says. “All of these services are hugely beneficial to the policyholder and their family and, if they can help them to get back to work, this is a huge bonus.”

The value of rehabilitation has also received a major boost from the Seven Families campaign. By providing the families with access to experts in rehabilitation, counselling and independent living support, it has highlighted the difference this type of intervention can make.

In addition it has also shown that, in some instances, even where there is a delay in providing this support, significant results can still be achieved. For example, in one of the families featured, the Pickfords, Paul had suffered a brain stem stroke in November 2012 at the age of 42. After spending 14 months as an in-patient he was discharged in January 2014, paralysed from the neck down and unable to speak.

When Seven Families stepped in, in November 2014, his wife Vicky was caring for him and a return to any type of work seemed unlikely. But, by providing rehabilitation in the form of physical and speech therapy as well as equipment such as eye gaze technology, which enables him to browse the internet, send email and, by typing a message, generate speech, Paul is now considering setting up his own business.

With such clear evidence of the benefits of rehabilitation both in the group market and the Seven Families campaign, there is a strong case to make it a core part of the individual IP proposition. But, with the success of many of

these services dependent on early intervention, advisers and insurers must ensure that policyholders understand their value at the point of sale.