Stress-related illness has been the major reason for the increase in income protection claims over the last decade. The 1980s will always be associated with Thatcherism and with the philosophy of self responsibility.
The concept of good housekeeping, as Thatcher put it, saw many industries and professions –- from teachers to miners – forced into restructuring.
Redundancies and new working practices became the order of the day. Union recognition and rights were also under the cosh, leaving the employees in a more vulnerable position.
The concept behind this good housekeeping, was to produce better results from less people and at a reduced cost.
During the mid 1980s when the economy was buoyant and serious money was being made and spent by many white collar professionals, the warning signs were there of burn out and stress.
After the crash of October 1987 the flood gates opened and stress claims rocketed as people began to feel the pinch of the slowdown in the economy.
Moving on to the present day, stress-related claims are a major concern for income protection providers. Stress related illness should also be a major concern for employers but, unquestionably, in many cases it is not.
There are two sides to the stress issue in so far as the product provider is concerned. On the one hand providers are trying to explain to employers the benefits of having income protection cover in the light of increases in stress-related illness, on the other hand they are trying to convince employers who have taken on income protection that they can play a key role in reducing claims and absence by adopting stress monitoring procedures.
PPP Healthcare has introduced what it has called the Employee Support Assistance Service. It has employed the services of Griff Rhys-Jones and Mel Smith to put together a video which explains to employers the benefits of monitoring stress levels at the workplace and how to deal with potential problems at an early stage for the benefit of employee and employer alike.
PPP’s service provides stress counselling and is designed to reduce staff absence and improve workforce efficiency. It is a 24-hour confidential telephone service, with access to qualified, full-time counsellors.
As PPP Healthcare’s new corporate services director Keith Trower points out: “Company directors need to appreciate the importance of stress and understand how it can be prevented and managed.”
This philosophy of active involvement in stress-related claims is echoed by Ronnie Martin, marketing manager life and health at Royal Sun Alliance. “At Royal Sun Alliance we employ vocational service providers.These are occupational therapists who sit down with claimants who are or have been suffering from stress-related illness and explore new job opportunities and possible retraining for a new career.”
Martin goes on to add that it is difficult to pin down stress-related illness as it is often the case that stress leads to illness rather being the illness itself.
“Stress often leads to an increase in smoking, alcohol consumption, hypertension, blood pressure and angina. It is more of a case of spotting the warning signs. The modern thinking among well run companies is to ensure the welfare of employees as it will in the long run make economic sense. The more claims are made the higher the premiums will be for the company.”
In effect the emphasis is on the provider and the IFA to press home to the employer the need to monitor the health of their workforce-and the employer to ensure they follow this advice.
Martin emphasises the point that increased pressure at work has seen stress claims soar. “We now see conditions like ME chronic fatigue syndrome as a relatively common cause of extended absence from work. Also certain professions and occupations have been hit hard by changes in conditions of work and assessment. We have seen the number of claims from those in the medical and teaching professions rise significantly over recent years.”
That said, it appears that any increase in claims is beginning to level off and hikes in premiums are not on the agenda. Martin says: “We have not increased our rates since 1994. I think things have stabilised. I think the results in terms of lower claims owing to improvement in the economy will not be seen for a few years yet but I expect it will be noticeable. As the economy improves the pressure eases and opportunities and new jobs open up. But I do not see premiums necessarily coming down- I see them as being sustained at current rates.”
As providers all point out, the question of stress-related illness is a notoriously grey area. Stress can manifest itself in so many ways it is often difficult to identify an employee with a problem.
A research study carried out by the International Stress Management Association (ISMA) acknowledges that stress is not a tangible condition and this is a huge stumbling block in getting stress recognised as a genuine problem.
But ISMA has broken down stress related symptoms into two main categories to help identify common symptoms of stress at work.
The first of these groupings looks at mental fitness. Employees suffering the effects of stress in this way are likely to have difficulty concentrating and become forgetful and less rational. This can affect decision making. In professions where decisions are crucial to the health or safety of others this is a serious concern, particularly in the medical profession, mine inspectors and air traffic controllers. These high stress professions would be expected to have stress monitoring procedures and income protection policies.
Emotional health may also suffer as a result of stress. Employees maybe unduly aggressive or irritable, affecting both relationships at home and work, and performance. Behavioural signs are a tendency to overwork; obsession about attending to trivia while often missing deadlines; and an increasing reliance on alcohol and cigarettes.
When managers feel under stress there is as marked effect on leadership. This is often demonstrated in the workplace when they resort to what has worked in the past rather than using their judgement to solve current problems.
There is some credence to the philosophy that stress levels drop as the economy improves, but what if, as seems to be the case in many instances, professions get tougher, hours longer and stress levels increase.
So what can rehabilitation do to solve this problem?
Peter Fenner, employee benefits marketing consultant at Swiss Life UK, sheds some light on this issue: “Where workload is the problem we as insurers can help companies put together a structured plan for helping the employee back to work. This might mean taking those parts of the job that are causing the stress away from that employee until they are up to resuming them.
“The opportunity to institute such a plan is more likely to exist in larger companies where work can be redistributed rather than smaller ones.”
It seems that stress management has improved in the workplace. “More analysis of the cause of absence is done which can show up trends and perhaps suggest areas where change is needed if the problem is to be solved,” says Fenner. “Legislation, in the form of the Disability Discrimination Act, as well as some cases in the court where plaintiffs have successfully sued their companies for causing them stress have raised awareness of the need for companies to address the causes of stress.
“It is the large companies that are likely to have the specialist personnel departments who are aware of these issues,” he adds.
But things are far from healthy when it comes to the general attitude of employers to stress management. A few statistics from ISMA show just how much of an uphill battle the protection industry faces persuading a more proactive approach from employers.
In 1996 it discovered, out of 100 human resource managers attending a conference, only 4% had a formal stress policy of some sort.
Working hours are longer in the UK than in the rest of Europe with 54% of managers working more than 50 hours a week.
And a 1995 CBI survey found that while 90% of companies considered the mental health of their employees was vital to their competitive position, only 12% had a programme to deal with stress.
But the three statistics that ISMA provide that are undoubtedly the most significant are:
• Stress can cost the nation up to £1 lbn a year through sickness absence and health costs.
• DSS statistics for 1991/92 show work days lost through stress-related illness increased by 69.9% for men and 139.9% for women when compared with figures obtained between 1983/84
• Employers have to pick up the bulk of the cost for employee sickness n 40% of which are likely to be stress-related.
These statistics are significant and linked. What they are in fact saying is claims have soared and are likely to stay around this mark, the costs incurred through stress-related illness have gone through the ceiling and the onus is on the employer to pay out.
Given this scenario the logical conclusion would be for companies to flock in their thousands to the protective umbrella of income protection and at the same time, on economic grounds alone, to employ either internal or external stress management specialists.
The benefits and indeed the necessity of income protection may still be proving a difficult sell for providers and IFAs alike but against this background how long will it be before this tide turns?