Zurich: Income protection rehab valued at £110m per year


The value of rehabilitation support provided via income protection policies is around £110m per year, according to a study commissioned by Zurich.

This means that every £1 spent on rehabilitation to support the long term sick and disabled generates cost benefits totalling £16.80 for individuals, the tax payer, employers and insurers because people recover and return to work more quickly.

The study - ‘Income Protection and rehabilitation - working together,' was conducted by independent economist Kyla Malcolm.

The study said that the £110m generated through rehabilitation support is made up of £74 million that directly benefits:

• individuals who are able to return to work and benefit from their original earnings - £5m gain
• the tax payer through higher tax revenues and lower welfare payments from the individual being back at work - £27m gain
• the employer through savings in occupational sick payments - £17m gain
• insurers - £25m saved through fewer income protection payments made which in turn reduces premiums for our customers

Zurich said that rehabilitation support is often '[overlooked'. 

The research also highlighted the additional indirect savings that amount to around £35m.

This included the cost of temporary staff to cover absence, training and recruitment and lower productivity while an employee can't work.

This amount however doesn't include non-quantified benefits such as the reduced burden on the NHS from treatments being shorter or sourced privately, continued pension provision for employees off work or the impact on family who take on extra caring responsibilities.

The value of rehabilitation has been calculated by comparing treatment pathways for typical claims, considering the journey to recovery with and without the rehabilitation support available under a group income protection scheme. These financial gains have then been used to calculate the benefits for other stakeholders.

Mental illness accounts for the largest number of claims and is estimated to cost the economy £70bn per year.

Gary Shaughnessy, CEO of Zurich UK Life said:"With the UK's workforce aging, we reiterate our call to encourage the Government to consider incentives for employers to improve take up. We believe group income protection needs to be at the heart of any UK welfare solution, which should be a partnership of public and private provision.

"Greater take up not only benefits individuals but provides considerable benefits to employers, the tax payer and the Government by relieving pressure on already stretched public funds and services."

The study follows an earlier report from Kyla Malcolm for Zurich that examined the wider value of group income protection policies. 


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