Better rehabilitation may have a negative effect on IP sales, warns Charles Ansdell
The issue of rehabilitation remains hot. Protection, be it income protection (IP), critical illness or private medical, has been a high profile financial remedy to injury and illness. However, far less impetus has been given to prevention or rehabilitation to bring individuals back to work.
Interestingly, IP may be the victim of its own marketing success. It could be argued that IP is a disincentive to rehabilitation. Indeed, the motivation for getting better is limited if IP negates the need to earn income.
It is therefore in providers' interests to start to promote better preventative and rehabilitating resources. Fundamental to achieving this is combining IP products with other initiatives which can improve the general health and recovery of those insured.
The opportunities for using combined initiatives is likely to be greatly increased by integrating them into the menu style employee benefits systems many companies employ. These offer the opportunity for employees to pick and choose from a schedule of benefits. This combined 'better health' package could form a key role in the prevention of ill health and rehabilitation.
The biggest cause of long-term absenteeism at work is mental health ailments ' 37%, according to a Swiss Life survey in 2001 ' which can be best prevented through pre-emptive action.
However this creates an interesting paradox ' it is in insurers' interests to use prevention and rehabilitation to minimise claims. However, these services may well reduce the demand for IP products. If people become much healthier through preventative measures, or better rehabilitation reduces time off ill, people would, theoretically, have less demand for IP.
Whether this theory translates into reality remains to be seen. The demand for IP is being driven by a number of factors, including earlier diagnosis and better medical technology. It is debatable whether better rehabilitation would have a material impact.
Nevertheless, providers would do well to champion rehabilitation and prevention as a holistic wealth and health management system. As employers and employees strive for results in an increasingly competitive business environment, so negative impacts on health are likely to grow. It is paramount that insurers, employers and employees take measures to reduce these impacts.
