"I am an adviser with a corporate client who has a Group Income Protection (GIP) policy. The client is asking where this market is going and what direction do you see GIP going in the next year. Where do you see innovation? This will help me in my sales pitch."
In terms of the direction we are taking, we are increasingly using a more co-ordinated approach, not just with regards to GIP, but with employee benefits as a whole. We are using data strategies to identify employee trends, which can be used across all of the employee benefits a firm might have.
Having identified the trends, we help our clients to access the right products and services to meet their specific needs and then create pathways to follow, ensuring the most suitable interventions take place, at the right time.
There is a shifting need to look at individual circumstances. Take employees who may have a number of short-term absences in a period of time. For example we might recommend that employee undergoes CBT before they get to the point where they become a long-term disability claim.
Most GIP providers will now offer early intervention and rehabilitation for the two top causes of claims; mental health and musculoskeletal and these services are offered within the premium. Therefore adopting a coordinated approach can avoid extra costs in the other areas, such as healthcare or occupational health.
Elliott Silk, Engage Mutual
The big innovation seems to have been driven by Unum at the moment with their sick pay insurance product. It’s looking at protecting shorter terms as well as longer terms of absence.
Certainly that suits a lot of HR directors, a lot of them are looking to control their short-term sick pay budget. A lot of them would prefer to have fixed item costs in terms of an insurance policy rather than that grey area of paying employees when they’re off ill.
Using cancer as an analogy, firms will normally continue full pay for senior members of staff if they are off ill. For other illnesses and newer workers they may decide not to, which could get challenged.
A lot of HR directors are looking at the shorter-term sick policy. I also think other insurers will follow; they tend to adopt each other’s ideas.
We will also see more employers insuring against pension contributions through GIP schemes. We’ve got auto-enrolment and if an employee is sick and there’s a GIP scheme in place anyway, the employer is liable to pay National Insurance Contributions and pension contributions.
One solution available through the GIP scheme is an employer can insure their NI contributions and their pension liabilities. With compulsion on pensions, what you’re going to see is the inconvenience or angst of a company having to pay pension contributions for someone who is off long-term sick.
Rather than pay that, I think a lot of companies will look to insure against those.
