We all like to know we’re getting extra value from a product or service we subscribe to. But, across the group income protection (IP) market, many clients play a direct role in reducing the value they receive from their policy and its related support facilities.
Surprisingly, this loss of value arises directly from employers failing to make timely claims. Anecdotal market evidence and my own company’s experience suggest that around half of submitted claims are made after the expiry of the waiting period. By this stage, many of the employees concerned will have been off work for at least six months.
This delay prejudices both the employer’s and employee’s interests. By reducing the chances of helping recovery, the absence will continue for longer – extending disruption of the employer’s business; adding to the costs of benefits provision and, ultimately, leading to increased premiums for the employer.
Regular discussions between employers and their insurers often enable early intervention and assistance, allowing issues to be addressed as soon as they arise. Short term problems can then be resolved between employer and employee.
In the case of a long term prognosis, the insurer can assist by putting into play a claims management programme. This might include visits to the claimant, ongoing discussions with the employer and even joint meetings of the three parties.
Offers of dialogue and discussion are welcomed by the majority of employers. Most employers’ worsening claims experience can be attributed to allowing short term absence to become long term absence. This, in some cases, threatens the very future of the scheme.
Advisers and brokers have an important role that will help to increase the value that clients receive from their group IP arrangements. Effective management and support programmes will help employers to reduce claim payment periods – this in turn will improve productivity, reduce business disruption, enhance their employees’ lifestyles and well-being and keep the costs of providing the benefits at a reasonable and sustainable level.
Working together, clients, their advisers and insurers can ensure the viability of long term sick pay provision and the well-being of those it is designed to benefit. Everyone could be a winner.