The risk of death, ill-health and disability and their consequences are fundamental aspects of life that the insurance industry is geared to protect individuals against.
However, we are well aware that the majority of the UK population does not have adequate cover against these risks, and that we do not operate within a saturated market.
We are also aware that most people, including employers, would rather avoid these predicaments for as long as possible.
How then, can intermediaries gear themselves up to work together with clients to:
l Promote insurance against the consequences of death and ill-health.
l Be proactive in preventing ill-health or rehabilitating an individual to the work place if and when they do become ill.
Risk management has long been employed in the area of health and safety in the main because there are legislative imperatives surrounding health and safety issues, and employers have a statutory duty to ensure that their employees are not made ill or exposed to harm through their work. The Health and Safety Executive (HSE) promotes four basic steps to good management of health risks:
l Find out if there is a problem.
l Decide what to do.
l Do it.
l Check it works.
Risk management has evolved over the years from reactivity to proactivity, and nowhere can this been seen more than when examining the origins of employer's liability insurance.
Initially this product was preoccupied with the insurance and prevention of accidents in the workplace but today's employers are becoming more concerned about issues such as the active promotion of well being among their employees in order to prevent a liability situation occuring in the first place.
Proactive benefits
Insurance such as critical illness and income protection have never been viewed as a mandatory employer requirement since they have traditionally been there to 'mop up the problem'. Until recently insurance has not been viewed as a proactive benefit. Times are changing and insurers, intermediaries and employers can now work together to assess the risk of ill-health and set in place strategies to avoid it, backed up with insurance and rehabilitative techniques when ill health occurs.
Intermediaries can play a role as risk managers for their clients by undertaking the following processes:
It is important to understand the risks in both a quantitative and qualitative context. First, find out if the client has a problem. This can be achieved by putting in place processes to capture information about ill- health.
This can be done by examining sickness absence records, looking at the incidence of ill-health early retirement, as well as insurance claims. Also, measure the extent of the problem and the risks of ill-health within the organisation and begin to examine the causes behind them. For example, if there is a high incidence of absence due to back strain, it may be due to the fact that workstation assessments are not being carried out.
Measuring costs
Also measure the cost in terms of both direct and indirect costs. Direct costs include salary, benefits and temporary staff. While indirect costs include recruitment, training, administration/management time, and productivity. The less tangible effects of absence should also be considered such as the loss of business, damage to the employer's reputation and employee morale.
The next step is to develop a strategy to treat the problem. This could include: classic sickness absence procedures, setting in place a comprehensive insurance package that offers both financial and return to work benefits and not forgetting, training for line managers and the promotion of sickness absence processes within the organisation.
A typical sickness absence policy has the following elements:
l Procedures for the notification of absence.
l Managing the return to work, including return to work interviews.
l Procedures for managing intermittent short-term absence, including the triggers used to initiate a review, the conduct of review meetings and the link with disciplinary procedures.
l Procedures for managing long-term absence, including the role of occupational healthcare in assessment and rehabilitation.
Dealing with employees referred for an assessment of their fitness for work and helping those on long-term sick leave return to work, are important areas for occupational healthcare. Research suggests that the longer individuals are away from work, the less likely they are to return. Early intervention is key. This can include regular home visits, providing employees with access to care planning and counselling, as well as conducting reviews of ill-health.
Occupational healthcare intervention can be grouped as follows:
l Reviewing the cases of individuals with persistent short-term, or long-term absence following a referral from line managers or human resources.
l Conducting home visits for employees on long-term sick leave.
l Managing the return to work of employees after long-term absence, including conducting fitness for work assessments and designing rehabilitation programmes involving alternative duties, locations and working practices including a partial return to work.
l Conducting pre-employment medical screenings.
l Providing counselling to employees with sickness absence problems.
l Promoting awareness of lifestyle issues. For example, smoking, drinking and the importance of a healthy diet.
It is important to revisit these strategies on a regular basis and refine them according to the feedback gained, this will make it easier to assess how effective they are.
Carving your niche
So how do intermediaries that are not experts in the field of healthcare move into risk management? All good intermediaries begin with a fact find. During this fact finding process intermediaries can begin to ask questions about the extent of sickness absence and ill-health in the workplace and strategies that the organisation has in place to overcome them. They can also work with the client to prioritise their key areas of need.
After the fact-finding process, the intermediary can then begin to look around for solutions and providers that can help their client. These providers might include specialists in mechanisms to capture sickness absence information, insurers with innovative solutions, and rehabilitation service providers. Working alongside these providers, the intermediary can take their client through the process outlined above. They may wish to initially employ this process in examining just one element of employee well-being, for example sickness absence through musculo-skeletal conditions.
This type of work is not necessarily confined to either the larger intermediary, or the larger employer as intermediaries do not need to become healthcare specialists. Rather, they should develop a network of good providers with evidence-based results who can address the client's needs. For example, intermediaries should be looking at income protection insurers that have an overt claims management philosophy and processes that encourage early intervention and notification of claims with a good track record of getting people back to work on either a full or part-time basis. The client does not need to have their own occupational healthcare provision working on-site, as there are plenty of occupational providers that can work on a per job basis.
Employers should work with their advisers to develop a risk management approach to develop their employees well being. This can result in both direct and indirect cost savings. These savings would result in the stability of insurance premiums which are affected by claims experience.
Savings also stem from increased productivity from employees who are healthier and less prone to take time of work. Given the undoubted cost benefits of taking this approach there is great potential for a win-win situation for both employers and intermediaries alike.
Nicola Smith is communications manager, employee benefits at Swiss Life
