Scottish Equitable Employee Benefits (SEEB) is to launch its first product since Aegon, Scottish Equitable's parent company, acquired and rebranded Guardian Employee Benefits.
By Rachel Williams
The firm is launching a group income protection plan to replace the former GEB Earnings Replacement Cover policy.
While the product has not undergone major changes to its benefit structure, the new plan will have a greater focus on rehabilitation and helping employers control workplace absence to prevent long-term absence turn into long-term claims.
Central to the changes has been a reworking of the ways in which claims are handled and processed. Rod McCarthy, marketing actuary at SEEB, said: "We are encouraging the scheme to be set up in such a way so as to ensure we are made aware of potential claims as early as possible, after eight weeks at the latest."
He said that income protection providers are not usually notified of a claim until 20 weeks or sometimes not until the deferred period is over. As a result, when the insurer finally becomes involved in the claim it may be too late to help the claimant back to work.
"After four or five months' absence people have developed a mindset that makes it difficult to claim and statistics show that once someone has been off work for six months there is only a 50% chance that they will ever return to work. If we can get in early and assist claims at this stage we can minimise the level of long-term claims," McCarthy said.
The policy includes an alternative definition of disability for schemes that might otherwise be rejected, which caps SEEB's liability but also controls the cost of the policy. This works by limiting payments to two years for subjective claims with no positive diagnosis, for example non-organic back pain.
"Most will warrant full coverage, but this is an option where the alternative would have been not to quote," said McCarthy.
Before the end of the deferred period, on notification of a potential claim the insurer will assess the situation and recommend appropriate action. McCarthy said that while such costs will be borne by the employer until the insurance cover kicks in at 26 weeks, the service will help control costs as more long-term claims mean poor claims experience and high premiums.
The insurer has also adapted how it pays benefits on partial return to work. Previously, to qualify for the benefit the employment had to be with the original employer. Under the new scheme, claimants will be able to seek alternative work without severing links with their employer.
McCarthy said: "We often find that people who are off sick cannot return to their own job but would like to get an alternative job." For example, a claimant may want to take on part-time work until they are ready to return to their old job. Benefits are then off-set by the part-time earnings.
