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Zurich urges Government, employers and insurers to work together on income protection to prevent financial hardship

Swindon, October 18, 2017

Leading insurance company Zurich, in collaboration with the Smith School of Enterprise and the Environment at the University of Oxford, has today published the UK recommendations from its report, Embracing the income protection gaps challenge: options and solutions.


The study, outlines practical recommendations for how government, employers, insurers and intermediaries can work together to build financial resilience where the main adult wage earner in a household becomes too ill to work or dies.  

The urgent need for solutions in the UK comes as state support for those unable to work is being reduced and the working population ages, with people at increased risk of becoming disabled during their career.   Zurich’s study, based on extensive research, outlines practical recommendations to address critical issues and gives insights into how governments, employers, insurers, intermediaries and individuals can work together to close income protection gaps (IPGs).

Key recommendations include:

• To create an environment for optimal workplace-based solutions, such as financial incentives for employers to provide group income protection insurance
• To incentivise employers to invest in medical monitoring and health and fitness programmes
• To integrate policy frameworks so that the Government takes a cross-departmental strategic approach to addressing the welfare challenges 
• To encourage the retention of older workers and those with a disability, such as, through progressive retirement options and employer obligations

• To provide education programmes for employees and offer ongoing financial advice and engagement
• To design tools and support for employees about benefits available and how IP insurance fits into the package 
• To extend protection: create and maintain a core set of benefits for all employees, promoting social equity
• To foster rehabilitation & inclusion, and combat presenteeism


• To promote best practice: offer kitemarked insurance and savings products while safeguarding price transparency to protect public trust in market competition

Nick Homer, Head of Market Management Corporate Risk said, “Our research shows that a number of factors – including changing employee demographics, working patterns and a declining welfare State are making UK employees increasingly vulnerable to the financial risks of becoming unable to work, as a result of illness or injury. This presents major challenges to us as a society, affecting not just individuals but also governments and employers”. 

“It is critical that the government, employers, insurers, intermediaries and individuals all work together to close IPGs and create a sustainable UK welfare model”.

The research report gives recommendations for addressing IPGs and provides insights and solution for 12 countries including the UK.


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Further information
The first phase of the project, released in 2015, addressed themes such as how income is protected. That study explained what income protection gaps are, and why they are widening, as well as how serious the consequences of these might be for households, employers and governments. This research demonstrated that income protection gaps are an issue that cannot be measured or solved globally. Local characteristics require local solutions but broad regional trends can also be observed. The second study published in 2016 looked at institutional and behavioral factors influencing demand for income protection. The analysis was based on a survey conducted early in 2016 of over 13,500 respondents in 12 countries to better understand IPGs from the demand side – the behavioral and institutional factors, like financial awareness and behavior, influencing individuals’ decisions on whether or how to protect their household income. The third phase of the project, which includes the latest study, investigates potential avenues for how the public and private sectors could work together to close IPGs.