Katy Dowell says brokers are confused about recommending rehab products to their clients, but who will help them?
The rehabilitation marketplace is a confusing place to be. Brokers approach the issue of rehab with some trepidation. The profit margins to be made by selling the products are low, they complain. There is little understanding of the differences between products on the market, retort suppliers.
On top of this clients have a limited knowledge of how rehabilitation can slash the customer's outlays.
So given this muddled picture how can brokers separate the myths from the facts? Should more be done to persuade brokers that rehabilitation is a worthwhile commodity?
And how can a profit be made from rehabilitation? As our current Prime Minister once said, it is all about "education, education, education".
Simon Collings, Marsh employer's liability practice leader, says it is all down to a lack of knowledge. "There is not a huge understanding of rehabilitation or the differences between the various products," he says.
Andy Welch, HCML's business development director, believes this is because the insurance industry has not presented research on the subject. He says a lack of research has left brokers with little evidence to present the cost benefits to the client.
"There is a lack of analysis on how effective rehabilitation is. Insurers are doing the research but not enough of that has come out, so brokers don't see the financial benefits and cannot explain those benefits to their clients," says Welch.
Some research is available to show how insurance claims can be reduced using rehabilitiation. This could, in turn, persuade employers to invest in rehab products.
"There is no doubt that there is plenty of medical research available which would lead you to the view that rehab gets people back into work quicker," says Cathie Bruce, head of proposition for Groupama.
Although Collings agrees, he says the benefits hit an employer's pockets because of the wider costs associated with employee absenteeism. The cost of hiring a replacement worker, training that worker and paying the sickness of the absent employee soon adds up.
The question arises: wouldn't it be cheaper to assess whether the sick employee could be helped back to work quicker through using effective rehabilitation? And should brokers demand more information from their insurers?
Bruce thinks so. She says: "Brokers should be asking for a better standard of service. They are not reluctant to sell rehab, but they need to know they have the means to do it."
So it is simple: brokers need to know where the cost benefits are.
For Mark Howard, FirstAssist's group rehabilitation director, the rehabilitation process is the utilisation of "educative, preventative and curative tools" which can be applied to all varieties of insurance programmes.
How an intermediary uses the available research to promote those strands of rehab and show that claims costs could be reduced, however, is dependent on whether that research is available in that particular field.
Furthermore, what financial incentives are there for brokers to work in the rehabilitation arena? According to Howard: "There are no profits to be made in front line rehabilitation." Oh dear.
But the Jelf Group has had enormous successes in its healthcare lines.
Yet while the broker has managed to make a profit, it readily admits there are slim profits to be made. Tobin Coles, head of flexible benefits, says: "There are not many avenues to earn an income from rehabilitation. Rehab providers don't really tend to pay any commissions on the services which brokers sell."
Jelf has positioned itself as a consultative service, advising clients on where rehabilitation is best utilised rather than selling it as a commodity.
"We help clients install a software system, which triggers a protocol process when they feel rehab can be used," he says.
That system informs the client of when to use rehab, and what type of products that firm can apply.
"Good rehab is a good way of reducing a firms insurance costs in the long term," he says. "Using a consultative service as method of promoting rehabilitation differentiates the broker from other providers," says Coles.
The broker also runs seminars to educate its customers about the benefits of launching a rehab package, thus opening up new avenues of business.
Coles says insurers have been slow to admit the financial benefits of applying rehabilitation, but it is gradually becoming more common.
"If insurers want to help they should accept rehab products from any provider, rather than their own in-house providers," he says. This could also drive down the costs of rehab impacting directly on the rising cost of claims.
It is true to say, then, that there are financial benefits to be had by brokers working in rehabilitation, but these are not as straightforward as earning a commission from say a motor fleet policy. As Howard says: "To be influential, brokers need to be innovative."
Howard suggests a more radical approach should be encouraged. He says a not-for-profit organisation should be made responsible for educating the public about the wider benefits of using rehab products.
In other words it should become embedded in British culture.
In Australia, rehabilitation is actively promoted in the majority of work places. In the UK, the government is stepping up its quest to get people on benefits back to work. There is no doubt it will be beneficial to society in general. Howard says: "I believe, very simply, there is the opportunity for someone with the foresight and passion to deliver the services required," he says. "It needs someone to champion the cause."
Furthermore, he says the benefits of applying rehabilitation will only be seen over time. "Brokers want proof that rehab will save money. It is a curative end, and if preventative education stops that situation arising it will take time to see the true benefits of rehab."
Would it be easier for a non-profit making organisation to broach the subject with a public unsure of the financial incentives a business gains from its promotions?
With questions surrounding rehab and its financial benefits it is no wonder brokers are nervous about entering this line of business. And while profit margins remain low it is unlikely that an intermediary will step into this business despite its rapid growth.
There is little doubt that if the industry wants to get rehabilitation products into the mainstream, questions must get louder. And more importantly, they will have to be answered.