Whether it is responding to the increased emphasis on someone’s capability for work, retuning the underwriting process or the ever-growing raft of associated product offerings, the group income protection market is always moving.
When group income protection came about in the 1970s in the form of ‘permanent health insurance’, employers would dust off their policy when someone had been off sick for five or six months. By then, entrenchment would have set in, there would be little expectation of a return to work and, if valid, a claim would often be paid until retirement. There was little focus on capability; little understanding of comorbidity and the effect of illness or disability on mental health; or widespread recognition of the fact that work is good for people.
Pioneering vocational rehabilitation
Over the years, the group risk industry has come to understand all these things. It pioneered vocational rehabilitation in the UK and was among the first to understand the bio-psycho-social model, which states pyschological and social factors play a role in how somone functions with a health problem, in the context of illness and disability.
The industry recognised the need to focus on capability rather than inability long before the Employment and Support Allowance and the Work Capability Assessment refocused state provision in this way.
Fast-forward to now and we have a very different offering that focuses as much on mitigating risk and offering support as it does on paying claims. We have even refocused medical underwriting to consider an individual’s attitude towards managing their health and/or medical conditions rather than just their actual state of health, which means that far more individuals with health conditions can be included.
Today, 17,193 schemes cover 2.04m people for group income protection benefits totalling £59.9 billion (80% of all insured UK income protection cover), according to Swiss Re’s Group watch report , published in April 2014. And according to Group Risk Developments (Grid) Claims survey, published in May 2014, the industry paid out 14,501 income protection claims totalling £318.8 million (annual benefit) during 2013.
Range of extra support
Under a current generation group income protection policy, employers and employees get access to a wide range of extra support that can be used on a daily basis, even if a claim is never made. This can be extremely effective in keeping people in the workplace, giving them the support they need to make their lives better and achieving a sustainable return to work for those who have had to take time off.
Group income protection providers ensure the support they give dovetails with their offering and employers’ needs. Such support services can include absence management, employee assistance programmes, HR advice, legal advice, GP help lines, online health assessments, second-medical-opinion services, fast-track access to cognitive behavioural therapy and physiotherapy, counselling, occupational health, early-notification bonus and more. Effective use of these services can drive engagement and release money to spend elsewhere so they merit as much consideration as the insurance pricing itself.
Fit for Work service
The government’s launch of the Fit for Work service, which provides occupational health assessment and health and work advice to employees, employers and GPs marks the start of a new era.
Employers that have experience of the new service will appreciate how group income protection can be used to implement back-to-work programmes and by giving them access to a raft of further support.
The next development phase for group income protection is likely to encompass greater support for employers in managing the health and wellbeing of their workforce and encouraging better health behaviours.
Going into 2015 and beyond, employers with group income protection will not only have insured their liability for long-term sick pay but they will be well placed to move towards supporting prevention as well as cure.
Katharine Moxham is spokesperson for Group Risk Development (Grid)