Think Tank

Alex Broad: The insurance industry has made some progress towards implementing rehabilitation in the motor and employers' liability markets, but how far is it from becoming the norm across the industry?

Andrew Pemberton: It isn't.

Bob Cheesewright: I have to agree. There's a real danger we will have an outbreak of agreement because we have been talking about this issue for 20 years. Why do we have this culture that says any attempt to do rehabilitation is actually disadvantaging these people?

Stuart Gray: I would say there is a lot of talk but very little action.

Alex Broad: Are they any examples of good practice?

Graham Spittles: We are trying to do it for our existing claimants but they are worried about it. But if a new case comes in and we embrace it, they think it is positive. If you look back at insurance industry portfolios to see how much the industry is paying out in any one year, the success rate is small. So I have a question for the IFAs around the table ' is it going to be easier to sell rehab, or offer money up front?

Barbara Dahill: There has to be a culture change. People need to know that if they are insured that doesn't necessarily mean they will get a cash payout ' but that they will be helped in the most appropriate way. Right now there is some resistance to rehabilitation because people would rather have the cash.

Colin Snowdon: That's right. But you have to change the culture and introduce early intervention. There is no point having a strategy if it's not inter-connected with the people who have to buy into it ' the clients and IFAs have to as well.

Andrew Pemberton: We have a case who is designated fit for work, but the employer doesn't want them back because the position has been filled. The income protection insurer doesn't care because they're fit for work, so we are in a situation where the person has to be made redundant when they've been made fit for work ' it stinks. The fundamental objectives of the policy have to change.

Bob Cheesewright: Suppose we had a definition which said the headline proposition is that we pay a benefit when there's no alternative? The real proposition is we can give someone their life back.

Colin Snowdon: Income protection needs to be a more rounded policy. It should be sold as income replacement, but also as rehabilitation with early intervention as a positive, rather than a negative.

Kate Bleuel: I think we need to have policies on two different levels. We have different types of clients and some clients are not going to change their minds, at least not at this stage. I met a client yesterday whose response to, 'let's put some early intervention in, let's start getting claims down, let's get people back to work and into the workforce,' was: 'No, we don't want to do that. I have a manual-based workforce aged 50-55 ' their joints and their tendons start to give out and we use our policy to cope with those people and those difficulties. We don't want them back.' That is one style of policy we need to have. Another style of policy is for the client that says: 'We will actively intervene at four weeks and we will get the insurer involved with the individual along with our occupational health team, along with their manager and all parties will work together.' If you only have one type of policy how are you going to satisfy those needs?

Bob Cheesewright: You might have a definition that says after a year you will be paid, when there is no occupation for which you are suited. In the intervening period between, for example, four weeks and a year, the expectation is that you will be involved very heavily in rehabilitation.

Stephen Duckworth: Can I suggest it may not be necessary to revamp all policy approaches. In the personal injury market what they've tried to do under the Code of Best Practice in rehabilitation is more or less coerce the claimant's and defendant's teams into early intervention through adopting the Code of Best Practice outside the legislative process.

Steve Williams: I disagree. I think the Code of Best Practice is well intentioned, but we are sitting here three years down the line and it is used, abused, not even heard of. Money talks, not the Code of Best Practice.

Alex Broad: Does everyone agree?

Graham Spittles: I have to disagree with that. I sit on the Association of British Insurers (ABI) rehabilitation working party that developed the Code of Best Practice. I believe it works, although one of the problems we face in this country is inertia. It takes a long time to persuade people of the idea of rehabilitation and intervention and the insurers themselves are trying to satisfy themselves what the benefits are. But this inertia is changing. It is not a problem of communication, it is an issue of knowledge. Once people understand how rehabilitation works and what the benefits are, we stand a much better chance of selling that right across the industry.

Anthony Gould: The ABI suggested a mandatory code of rehabilitation in the workplace. Do you think that would help in terms of changing people's attitude to rehabilitation?

Stuart Gray: Clients aren't interested in being proactive ' they are too busy running the business.

Seaton Small: AIG has a specific product where on employer's liability it is written into the product that if there is an accident, a team of nurses intervene ' and there are other people out there doing this such as RSA. We all have to preach the same message. We have had motor insurers approaching us saying, 'can you offer a similar service that AIG is doing,' you wonder why can't income protection providers consider doing this?

Graham Spittles: If you look at life and health products the terms and conditions that exist are the problem. So you will have to go into these products and change the policy and conditions. You can't look at those people after six months and say: 'Sorry I can't help you.'

Stephen Duckworth: I would like to pick on this argument around persuasion versus compulsion. Should we persuade and educate everybody it is a great idea because we think it is, or should we compel them to do it? The parallel I would draw there is with the use of seat belts. For many years Jimmy Saville was on the television saying 'clunk, click, every trip' ' but no one did it. The increase in seatbelt usage was minimal. Why don't we do the same thing with rehabilitation? Perhaps we need to force people to do it.

Alex Broad: Do you think rehabilitation should become compulsory?

Graham Spittles: We have debated this ad infinitum on the working party and decided you are better off engendering a consensual approach.

Colin Snowdon: You have those clients with full human resources looking at absentee management, but a high percentage of the clients you speak to do not have the time to think about rehabilitation and all the issues that surround it.

Stuart Gray: You need to show the client a business case at the end of the day. You have to be careful in terms of compulsion. We only have to look at comments being made by lawyers over the last six months, suggesting companies would be better off without income protection schemes due to legal tie-ins. Certainly if I went out and surveyed all my clients and got a blank piece of paper and put together a benefit package today I don't know if I would recommend it.

Rachel Williams: So how can the industry make rehabilitation work?

Stuart Gray: The key to success is with getting early intervention in and this just does not happen from the insurers' perspective. Even six weeks to our mind is too long, because early intervention works best on subjective types of illnesses. If you have stress-related absence ' you won't wake up next Monday with stress, it will have been built up. Over that time you would have had odd days of absence and get to a situation where you have lots of GP visits, irritable bowel syndrome, headaches, sleeplessness, tiredness and so on. Eventually you reach breaking point and get signed off. At this stage you are already a hell of a long way down the line with that absence and the condition. So you need to be triggering up to three periods of absence over a three-month period. The difficulty you get with insurers is they need all the forms completed ' even on a quick notification you're quite easily eight to 10 weeks in before anything happens by which point and you are almost too late from a physiological point of view.

Steve Williams: But that takes you back to the knowledge of communication, doesn't it? I think we need to sell the idea that rehabilitation is compensation ' that is the aspect we need to sell more than anything.

John Gillman: Human resources professionals know early intervention is good, disability is dangerous. They know stress-related illness can be a problem, but the problem they have is convincing fellow managers. It's the jump from the human resources professional to the business management that is sometimes the issue.

Alex Broad: Are there any particular areas where rehabilitation has been successful?

Vanessa Sallows: Through work-related stress areas where you're utilising cognitive behavioural therapy at an early stage. But you've got to be advised before the four-week period. If nobody can get in there that early, it's not going to be worth trying to help the individual at all.

Lutgen Terblanche: For people with musculo-skeletal injuries, I don't think there is any physical reason why somebody should be off for longer 12 weeks.

John Gillman: We have heard of some cases where we've seen people off for long periods and in disputes with insurers a remarkable number are management performance issues ' they are not through illness.

Rachel Williams: So does anyone think compulsion among employers would work?

Andrew Pemberton: If you are an employer in Holland and an employee goes on Incapacity Benefit or its equivalent you are sent a bill. So if three people that left your employment went on to Incapacity Benefit last year you would be given a bill and if you don't want the bill next year, fix them. It is a simple equation in the mind of the human resources manager: pay the Government bill or fix it yourself, which is the cheapest?

Seaton Small: We have noticed on the personal injury side that of the people who have been injured in a road traffic accident, 30% or more walk away the moment treatment is offered to them.

Bob Cheesewright: Unless we confront it, an awful lot of people are not going to be given opportunities and facilities which will be to their advantage.

Seaton Small: I am speaking for the underwriters here but if you look at the liability side ' if they can predict the employer who buys with a particular product where early intervention falls in, what's in it for the employer? Discounted premium? So in return for compliance, we will discount your premium. It's attractive to the employer and they can position the product to the employee. They are saying to the employee 'we are a caring company.' But you have to sell it to them as part of the welfare programme.

John Gillman: This is why we have a policy of introducing underwriters to clients because you can tell a lot about an organisation when you visit it. I think you can make a more informed judgement as an underwriter if you are sitting there on the premises and seeing what happens.

Stuart Gray: So take the issue of compulsion and look at it in another way. If, when all your group schemes are coming up for renewal you offer terms at £100 to carry on as you are, or £95 if you sign up to a contract that commits you to early intervention, most clients will go for the latter. You could go down a road towards compulsion by giving them an incentive to buy into it. Whether they will do it is a different matter.

John Gillman: The client can have the best intentions in the world, but culture takes over and no matter how hard they try they fail to do it.

Lutgen Terblanche: It's happened before where premiums have come down because they've got a good strategy in place. But some have all the strategies in place and their premiums stay the same.

Barbara Dahill: There is an underwriter already saying if certain parameters are in place, certain discounts are available. It will just be interesting to see what their book of business looks like in five years' time.

Alex Broad: From your various perspectives what do you think will help push rehab further up the corporate agenda ' new policies, compulsion or more co-operation?

Graham Spittles: There's a lot of data out there, but is it useable data as far as actuarial claims are concerned ?

Lutgen Terblanche: And would the insurers be willing to share that data? They could use it to their advantage.

Graham Spittles: We tried to get that information out of the ABI working party but it was incredibly difficult. We were saying it was anonymous, but there was an enormous reluctance by individual companies to say 'yes we've got that, we're very proud of it, have a look at it.'

Stephen Duckworth: We've talked a lot about companies and insurers and employers and intermediaries and everybody else, but what do we do with the claimant and their internal psychology not just on a one-to-one basis but from a cultural point of view? Within the UK what can we do to make people embrace employment as something that will enhance their quality of life, rather than something that will further cause damage to their disability or impairment? There is still a culture of dependency and then the right to the benefit. It's certainly a challenge.

Alex Broad: Does anyone have anything to add to that?

Barbara Dahill: As a final thought, perhaps we should consider going down the route that Jamaica did 25 years ago. They had an entitlement culture both for disability and welfare benefits, but they made a huge step change. Everyone was still entitled to benefits but they said everybody can do something. In order to receive the benefit they will be assessed as to what it is they can do. If they show up for that assigned work every day for five days they will get their cheque at the end of the week. If they fail to show up even for one day they don't get the cheque that week. They had significant results as you can imagine. Of course that is a very draconian way to try to change behaviour.

Andrew Pemberton: The system we have now is not dissimilar, in that if you want the employee benefit you have to be a job seeker. Somebody has got to cash in on the opportunity of providing sickness absence or rehab industry services. It might be the end of income protection benefit, it may be the spawning of a new type of policy. It's going to go one way or the other but it's not going to disappear and it's a question of whether IP insurers want to get on the boat or be left back at shore. There might be insurers who still want that punitive system but they are going to diminish.

Rachel Williams is editor