Zurich paid out on over 97 percent of its new group income protection claims last year with employees benefitting from annualised payments averaging £37,900.
Announcing its GIP claims rates for the first time, Zurich says cancer was the main cause of claims in 2016, responsible for 27 per cent of claims, followed by mental health issues, which were responsible for 19 per cent of claims and 13 per cent caused by musculoskeletal problems.
Zurich would not say how many people had claimed over 2016 but said the figure was ‘in the hundreds’.
Half of employee absences notified to Zurich did not progress beyond the end of the deferment period, typically six months, and so did not reach claim stage. A large proportion of these are where the employee returned to work. Other reasons include the employee leaving employment or passing away.
Overall, around 40 per cent of those who returned to work benefitted from rehabilitation support through their cover.
Where claims were not accepted, it was because the employee did not meet the definition of illness or disability on the policy, such as where medical evidence suggested people were capable of returning to work or if the absence wasn’t a result of their own illness or injury.
Group income protection differs to individual income protection cover as the insurance often forms part of an employer’s wider absence management strategy. This means that the insurer isn’t necessarily notified of an absence with the expectation of payment, rather their role is to help validate the absence for the employer and explore rehabilitation opportunities for the employee.
Zurich head of market management, corporate risk Nick Homer says: “We would encourage other insurers to also publish their claims data. We know how important transparency is to encouraging the development of the market and demonstrating to employers what rehabilitation and early intervention can do in terms of driving positive outcomes.
“We have been lobbying to promote the importance of income protection insurance, particularly in light of the declining welfare state and the Government’s recent ‘Improving Lives’ Green Paper.
“Return to work success among employers who offer group income protection is substantially higher than those who don’t, benefitting employees, employers, the state and the wider economy”.
Gallagher Employee Benefits chief executive Tim Johnson says: “We support the publication of claims data of this sort in this way. It is useful to know the trends in claims, and it would be helpful if other providers were to publish their data too. I can’t see a situation where less information is better than more.”
F&TRC director Ian McKenna says: “It’s positive to see Zurich championing transparency in publishing its group income protection claim statistics and I’d like to see others follow suit. This information is important because it can help support advisers and EBCs in recommending products that offer effective support to their clients at a time when welfare support for those sick or injured is being cut.”
Grid spokesperson Katharine Moxham says: “We do not see huge demand from employers, advisers or insurers for the publication of stats. A lot of the demands for transparency have come from people outside of the industry. If advisers want this sort of information, they need to make their voice heard.”