Zurich reports 91% of group income protection claims paid in 2017
July 19, 2018
- 40% of those who returned to work benefited from rehabilitation support
Global insurer Zurich today announces that in 2017, it paid out 91% new group income protection (GIP) claims in the UK, with average annual benefits of £26k. Over the same period, 99% of group life claims were paid.
Nearly half (46%) of all claims paid provided a benefit of under £25k, highlighting the misconception that GIP is typically a product for those on higher incomes.
Mental illness was the trigger for 28% of claims, followed by 26% for cancer and 14% for musculoskeletal claims such as back problems or arthritis.
Around half of all absences notified to Zurich did not progress to the claim payment stage. This is because a large proportion of employees recovered and returned to work before the end of the policy’s deferred period*. Many of these (around 40%) did so as a result of rehabilitation support provided by Zurich.
Over 60% of those who successfully returned to work before the end of the deferred period as a result of rehabilitation had been suffering with a mental illness. Zurich’s team of in-house health professionals (including nurses and physiotherapists) support employees with tailored return to work programmes and arrange medical treatment to aid recovery, where appropriate.
Where a minority of Group income protection claims weren’t accepted it was because the employee did not meet the definition of illness or disability on the policy. For example where medical evidence showed that employees were able to return 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. More often, the insurers’ role is to help validate the absence for the employer and explore rehabilitation opportunities for the employee.
Nick Homer, Head of Market Management, Corporate Risk said, “This is the second year we’ve shared our group income protection claims information and we hope that by doing so, we show how much value these benefits can deliver to businesses, their employees and the wider economy. Our own research shows that this equates to more than £16 for every £1 spent.**
“We encourage employers to engage with us as early as possible, because we have the expertise to support employees when they need us. Our early intervention and longer term support can have an enormous impact on recovery rates, particularly for conditions such as mental illness.”
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*This period is chosen by the employer providing the cover and is typically around 6 months. After this period, income protection payments for valid claims will start.
**‘Income Protection and rehabilitation – working together,’ by independent economist Kyla Malcolm, 2015, Zurich