Group Income Protection


John Gillman looks at the innovations the group risk market has undertaken in recent years and at the factors that will continue to drive positive development.

There are a number of reasons why employers now need to be more mindful of the health of their workforce, apart from the obvious link between health and productivity. For example:

• The removal of the Default Retirement Age has contributed to the fact that the UK workforce is ageing – GRiD research conducted in 2012 found that 33% of respondents reported that feature among their own employees. Importantly for the health perspective was the finding that over a quarter believed that they had seen an increase in absence due to age related conditions (such as diabetes and arthritis). An increasing number of employees intend to work past what was previously a Normal Retirement Date – some because they do not want to retire but many others because they simply cannot afford to.

• Early diagnosis and more effective treatments are helping people remain in employment who would previously have had to leave – possibly because their life expectancy was seriously impaired or because their treatment had side effects that made work impossible. This is great news for both employers and employees, but employers must be continually aware of their obligations under the Equality Act to make ‘reasonable adjustments’ (and a person diagnosed with cancer, for example, has immediate statutory protection whether or not their symptoms result in absence).

• The stigma attached to mental health conditions is gradually disappearing (although progress is still very slow). There is now a higher likelihood, however, that employers will find employees more willing to declare a mental health condition and this must be dealt with in the most positive and helpful way in order to keep them in employment.

Welfare reform has been a key feature of both this and the previous government’s policy, and for some time now there has been an obvious synergy between Government policy on workforce health and the way Group Income Protection arrangements operate. One only has to look at the structure of the proposed ‘Health and Work Service’ due to be launched later in 2014 to see this.

The basic income protection insurance model of a few decades ago has developed into a more sophisticated health risk management tool which employers can utilise to help reduce the range of risks associated with long term sickness absence. These valuable additional services are often available from insurers at little or no extra cost.

They include:

• Rehabilitation services – for some of the most common conditions that can lead to long-term absence (mental health problems and musculo-skeletal conditions) vocational rehabilitation services can be of immense help. They can also identify barriers that exist to return to work that are not necessarily health-related and are personal or workplace related. One insurer has reported that between 15% and 20% of absences had resulted from interpersonal conflict, management conflict and promotion to levels at which individuals were not comfortable.

• Employee Assistance Programmes – offering strict levels of confidentiality, they can help employees get their life back on track, including in areas such as debt management, legal problems and the availability of counselling.

• Therapies specifically related to mental health – Cognitive Behavioural Therapy (the preferred first line of treatment recommended by the National Institute for Health and Clinical Excellence) appears to continue to produce excellent results. One insurer reports that 74% of those who undergo it return to work within six months – up from only 30% before it introduced CBT in 2004.

What has happened, therefore, is that the ‘conventional’ transactional insurer/insured relationship has developed into a more ‘partnership-based’ model with clients, advisers and insurers working collaboratively to solve employee health related issues in an environment of enlightened mutual interest. A major objective has become the desire to create a framework that will facilitate an employee’s’ early, safe and effective return to work.

Advisers and insurers already recommend that employers behave in a fashion that is very much in line with Government thinking on how heath issues in the workplace should be managed.

Critical success factors for the future will continue be:

• Persuading employers that it can make good business sense to invest in health. For example, emphasising that both the employer and the employee benefit from maintaining the employment relationship once an employee has developed job-specific skills.

• Promoting the positive relationship between work and personal wellbeing and persuading employers of its importance. There are significant personal losses for people who are unable to get back into work, apart from the financial implications. It has long been accepted that work is important in many ways to a person’s psychological well being, bringing as it often does personal satisfaction, status, recognition and a supportive social network.

• A recognition of the importance of the biopsychosocial model in returning people to work. This recognises that the employee’s health condition is only one of the factors that must be taken into account in their rehabilitation. Equally important can be their attitudes and beliefs as well as the policies and practices of the organisation where they are employed, and there is strong evidence that symptoms and disability are shaped by psychological factors and the medical advice people have received.

• Early intervention and concentrating on ability rather than disability, emphasising once more that getting alongside the employee early when it first appears that they may be absent for a significant time (or have a serious condition that might eventually have that effect) is of critical importance.

• Helping employers and employees get access to the right care and advice. Insurers and advisers often work collaboratively with the employers’ own Occupational Health advisers to formulate rehabilitation plans and ‘back to work’ strategies, and research has shown this to be a highly valued and valuable service.

• Helping to eliminate discrimination. Employers already have a duty under Equality law to make reasonable adjustments in order to help a disabled person remain in work, and to ensure that discrimination does not take place as a result of recruitment practices. Avoiding problems and litigation requires a combination of robust processes and the deployment of suitable expertise. Many of the services offered by insurers can and do play an important part in keeping people with a disability in work.

The work that has been done by insurers in the area of health risk management over the previous few decades has been impressively innovative. It has produced tangible evidence that an effective partnership with employers is perfectly feasible at a time when workforce health is becoming of higher importance as the nature of long-term absence changes (and government spending on welfare benefits is destined to continue to be reduced).


John is an independent consultant specialising in health-related risk in the workplace.

Previously he  has held senior roles in Cigna, Noble Lowndes and Watson Wyatt (now Towers Watson) where he managed the health and Risk Consulting Practise. In more recent years he has advised employers (in both the private and public sectors) as well as insurers, reinsurers, brokers and consulting firms who practice or aspire to practice in this area. He is a member of the Executive team of the IPTF and works closely with Disability Rights UK, a leading charity working to create a society where everyone with lived experience of disability or health conditions can participate equally as full citizens.