Edition: May/July 2018
Expert Opinions

OLD MUTUAL CORPORATE

Business unusual for the disability insurance industry

The dawn of the digital revolution is shaping the way we work and live, driving innovation but also taking a toll on our health, particularly in the workplace. Clement Chinaka, Managing Director of Old Mutual Corporate, says disability cover should be refined to stay relevant and sustainable into the future.

While this modern world of work is opening up amazing possibilities, it has also brought a new set of challenges and health risks. Living in an always-on culture, we have become physically disconnected from each other and emotionally disconnected from ourselves. This has made us less aware of our own physical and emotional needs or we’re simply too busy to pay them any attention.

The research findings of the 2017 Old Mutual Corporate Disability Monitor, which surveys trends in South Africa’s disability cover and the driving factors behind them, was conducted with corporate businesses, intermediaries, reinsurers and assessors.

Overall, 62% of intermediaries and 42% of the corporate respondents said that enquiries about disability cover had increased, with 43% reporting that the nature of disability claims had changed.

The digital revolution has seen a shift in workplace health issues from physical injuries to stress-related and psychological problems.

In addition, one of the most notable health risks in the modern world of work, and primary cause of disability claims, is poor lifestyle (70%). This includes poor diet, insufficient exercise, drinking, smoking, substance abuse and obesity – and stress in general (54%).

Furthermore, despite the better-than-expected 2017 growth rate, the South African economy remains uncertain, and 70% of respondents in the Monitor named the economy as a source of stress, with 38% specifically pointing to concerns about retrenchment and job losses. An often-overlooked fact is that retrenchments have a knock-on effect as the remaining employees have to pick up the slack.

Having to shoulder a greater workload results in even more stress and potentially more disability claims. No fewer than 21% of respondents reported this knock-on effect as the cause of their stress.

Physical inactivity is also a key risk. With people spending more time sitting at their desks, in their cars and hunched over smartphones and tablets, muscularskeletal problems are on the increase.

These risks are evident in the disability claims being recorded. When asked which disabilities have increased, 71% of all respondents said psychological disorders, 70% said cancer, 24% said muscular-skeletal issues, 16% said cardiovascular illness and 13% said HIV. Only 5% of all respondents said that physical workplace injuries had increased.

Respondents predict that these changes will continue into the future. Psychological (64%), cancer (54%) and cardiovascular disorders (34%) are expected to be the biggest health risks in the next three years for employees.

There’s a clear need for greater emphasis on preventative care and rehabilitation within corporates if disability claims and costs are to be kept at a manageable level.

Although many corporates don’t realise it, disability in the workplace is costly and employee disability claims have a significant impact on the bottom line. Top performers could be most at risk and corporates can suffer significant skills losses when these individuals are unable to work. Other challenges that corporates face include the cost and difficulty of replacing employees.

Chinaka . . . significant impact of poor lifestyle
and stress on the workplace
Chinaka . . . significant impact of poor lifestyle and stress on the workplace

When asked whether corporates were aware of their ‘duty to accommodate’ and reintegrate back into the workplace those employees who have become disabled – as per the Labour Relations Act – 93% of corporates said yes. But 50% of respondents agreed that finding suitable alternative work is one of the biggest challenges in reintegrating employees who have claimed disability. While corporates are aware of this duty, very few have the resources to actually do so.

More and more corporates are starting to realise that the best way to manage disability claims is to be proactive and help prevent employees from having to claim in the first place. On the positive side, the research showed that 80% of corporates say they are proactively getting involved if they see a potential disability claim and 70% of them say they have an absenteeism management programme in place.

A total 79% of corporates also stated that they have a wellness programme in place, but these often tend to have a short-term physical or medical focus rather than a long-term approach to health and wellness management.

Focusing on the ‘basics’ such as eyesight, weight, blood pressure and glucose levels is just the beginning. When looking at disability claims it’s clear that extending them to include lifestyle, mental and skeletal health as well as financial wellness would benefit employees. Given how the world of work has changed, a long-term view has become critical.

Disability cover also needs to be refined to stay relevant and sustainable in future. If insurers and employers focus on prevention and rehabilitation, those who are disabled can return to work sooner. This will ensure that disability cover premiums remain affordable.

ROLE IN ADDING VALUE

The 2017 Old Mutual Corporate Disability Monitor reveals a rise in lifestyle and stress induced diseases. However, the research also found that - within this ‘new normal’ - insurers and employers have a role to play in creating a holistic risk-management approach that will add value for employers and their employees.

For more information about the Old Mutual Corporate 2017 Disability Monitor, visit https://www.oldmutual.co.za/corporate/disability-monitor