The emphasis on rehabilitation could be increased with IP products, says Deepak Jobanputra
The ABI and TUC, among others have issued a discussion paper on the issues surrounding rehabilitation for those that have suffered an illness or injury at the workplace. The anticipated outcome is to make recommendations such that all the stakeholders involved would benefit from the recommended changes.
The paper does not explicitly focus on income protection (IP) or any other particular product ' although there is more of an emphasis on liability insurance. It does however mention that IP products do offer a range of rehabilitation services within a flexible package of benefits.
Part of the appeal to buyers of protection products are the cash benefits that are available. IP has always lagged in sales behind the other protection products paying lump sum benefits, although more recently mortgage-related IP has proved attractive showing a marked increase in sales. It may therefore be difficult to convince consumers of the advantages of non-cash benefits.
The emphasis of rehabilitation could be increased within IP products. This could provide an innovative lift to a product that is currently under-sold. The benefits of rehabilitation could be emphasised at the point of sale to consumers as an added benefit that could assist claimants in helping them back to recovery following an illness or injury.
As the ABI and TUC report points out, the UK is lagging in this area when compared to other industrialised countries. There is now an opportunity for the various stakeholders to come together to provide a fully integrated rehabilitation programme. Those who could potentially benefit from such an initiative include insurers, employers and the Government.
Insurers have an active interest in building on the current rehabilitation practices. A specialist rehabilitation company ' the Health Claims Bureau (HCB) ' has been practising in this field for many years. HCB have recorded a significant increase in interest from insurers. The benefits to insurers are very clear, financial savings being the very obvious and most enticing. It is informally reported that for every £1 spent on rehabilitation, cost savings of up to £5 can be made. HCB is carrying out further analyses in this area. This can therefore translate in to large financial benefits when looked at in the context of the large reserves held by insurers.
The ABI and TUC report looks at a case study where the rehabilitation fees totalled £7,500, yet the estimated cost saving was £150,000.
There are clear advantages that rehabilitation can bring to the current environment. It could certainly help enhance the IP proposition and could bolster sales for a benefit that has not reached its full potential.
Furthermore, this could be achieved without increasing the cost of the product ' as mentioned above, the additional benefits of rehabilitation may help reduce claims costs. These cost savings may not necessarily be enjoyed in all cases, although this could be taken account of in the pricing structure.
The ABI and TUC, among others have issued a discussion paper on the issues surrounding rehabilitation for those that have suffered an illness or injury at the workplace. The anticipated outcome is to make recommendations such that all the stakeholders involved would benefit from the recommended changes.
