10 News Group risk insurers court Government for role in welfare reform
HEALTH WORRIES ‘SET IN AT 39’ Worries about health kick in at the age of 39, according to PruHealth’s analysis of a new survey. This is the average of the ages people cited when asked when the state of their health and body “really start to be a worry to you”. The insurer’s online poll of 2,019 people found that one in ten worried about health “all the time” while 40% said they were not healthy enough. However, 20% said laziness and time pressures were barriers to living healthier. Four in five said that the diagnosis of a serious illness would encourage people to improve their health and more than half (54%) said that the offer of hard incentives was likely to change their behaviour.
BRITISH FRIENDLY ENTERS IFA MARKET A new income protection (IP) plan is now available to intermediaries, from British Friendly. The product offers own occupation cover throughout the life of the policy, even for occupations deemed to represent a higher risk. As well as providing long-term cover to a retirement age of 70, short-term “budget” cover is also available. In addition to the traditional one and two year options five year cover is an option. At the underwriter’s discretion, reduced premiums may be offered if certain exclusions are applied, a practice now common in the critical illness market. “Big T” teleunderwriting is available.
AGEAS HIT BY CLICK Ageas Protect (formerly Fortis Life) increased new annual premiums by 52% to £22.7m in 2010, according to its end of year report. By the end of the fourth quarter of 2010, the business had a 6.4% IFA market share, compared to 4.3% in fourth quarter 2009. However, it carried a pre-tax loss of £10.2m in 2010, up from £7.2m in 2009. This includes a one-off impairment charge of £5.6m related to the loss of Click, a commercial partner that has gone into liquidation. The business now provides cover to over 120,000 customers, an increase of 90% compared to last year.
REGISTER FOR FREE WEEKLY UPDATES AT
www.hi-mag.com
HealthInsurance
“The squeezed middle” should receive a Government kick-back as a reward for taking out income protection (IP), according to an influential think tank. A new report from Demos,
sponsored by disability insurance provider Unum, recommends that the Government looks to the insurance industry to reduce the burden of disability claims on the welfare system and rewards individual responsibility through financial incentives. “Of mutual benefit: personalised
welfare for the many” describes the existing incapacity benefit system as both unaffordable for the taxpayer and insufficient for recipients. It recommends that the Government uses “nudge” methods to encourage both individuals and employers to insure against the risk of disability. This would take the form of a £100 national insurance rebate for each IP policy purchased. In addition, it recommends that the Government compels employers to insure employees against disability, so that an insurance company rather than employers themselves would be responsible for statutory sick pay (SSP), providing access to the group risk industry’s well-regarded rehabilitation services. “At the moment SSP is dead
money,” report author Max Wind- Cowie told Health Insurance. “There is no incentive to help employees return to work. If employers insure against SSP there are incentives built in for insurers to intervene. This will save employers and the state money, preventing the flow from SSP onto incapacity benefits.” The report suggests that people
earning between £16,000 and £50,000 are reluctant to buy IP because they feel they would be “paying twice”, but warns that this group will suffer most in the “relatively ungenerous” welfare system, should they fall victim to disability. Marco Forato, Unum’s chief
marketing officer, said that the report was timely given the announcement in March that the Government has asked David Frost, chairman of the British Chambers of Commerce
a bid to take advantage of the renewed interest in tackling sickness absence through rehabilitation. The insurer has produced a paper for Lord Freud, minister for welfare reform, exploring how insurers could support the Government’s efforts to keep people in work. “We have been on a mission to
L&G’s Pollock: Government can benefit from insurers’ rehab expertise
and Dame Carol Black to investigate sickness absence in the UK and access to rehabilitation services. He said, however, that the industry must take the lead in educating consumers about group risk products. “Employers and the general
population do not understand what IP is, what it covers or the risks that they face,” he said. “The only way to reach everyone is through advertising.” Unum is about to launch a major
advertising campaign, including TV promotions, which Forato claims is a first for the industry. The Demos report was welcomed
by another group risk insurer, Legal & General, which is also making overtures to the Government in
educate employers about IP and how beneficial it is to them as an organisation, but given a lot of the stresses and strains on corporate finances that has not always fallen on receptive ears,” said John Pollock, group board director at L&G. “The Government is taking up the baton on this particular issue and that will ultimately prove to be beneficial.” He cited several areas where
group risk providers could provide the Government with expertise and resources in order to reduce sickness absence, including the rehabilitation of employees with mental health conditions. Currently just 11% of the UK
labour force is covered by IP policy, a much lower percentage than in markets abroad where the welfare system is also more generous. In the US 27% of the labour force is covered by an IP policy.
HI GOVERNMENT AWARE OF PROS AND CONS OF INSURANCE
There are signs that the Government is increasingly receptive to the insurance industry’s bid to play a role in welfare reform. Speaking to the Association of British Insurers in March, Lord Freud, minister for welfare reform, said there was potential for “very considerable expansion” of the group risk market. “For a lot of people [absent from work] nothing much happens,”
he said. “If you are well-paid in a large company you may get quite reasonable support to get back to work but if you are not so well paid and working for a small company it is very likely that absolutely nothing will be done to help you.” He cited a report from Legal & General which claims that 73% of
employees covered by its group income protection policy return to work within a year if intervention is executed within four weeks of absence. “What that is saying is that early intervention works,” he said.
“There are very substantial savings to be made.” However, Lord Freud also warned against the risks of “throwing
everything to the insurance industry”, citing the “undesirable things” that have happened in the Netherlands where insurers are responsible for managing people absent from work through ill-health. In some instances, this leads to managers “wiping their hands” of the issue, he said, while discrimination claims are also a concern.
www.hi-mag.com April 2011
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48