60% drop in disability claims could mean an impending bottleneck

12 June 2020 Momentum Corporate

But what could the long-term fallout could look like?

Momentum Corporate has seen a 60% drop in the disability claims notification rate since the lockdown began on the 27th March 2020. While part of this is fewer work-related injuries and motor vehicle accidents, it may also be that human resources staff have not been at work and are therefore unaware of new disability cases.

As more employees return to the workplace, Elna van Wyk, Head of Group Disability and Underwriting at Momentum Corporate, says that claim levels are likely to increase dramatically. Submitting valid disability claims sooner rather than later will help South African diability claimants to avoid possible delays resulting from a post-lockdown rush.

What could the longer-term fallout look like?

The pandemic and lockdown measures are having a debilitating effect on an already weak economy. Van Wyk explains that Momentum Corporate’s claims experience shows a correlation between a weak economy and high income disability claims. “A weak economy leads to financial pressures on employers, which creates pressure on employees due to salary cuts or a cut in working hours that may affect their health and drives an increase in disability claims. A reduction in job opportunities for claimants returning to work is also likely to extend the duration of claims.”

Van Wyk also raises the issue of psychiatric-related impacts. “Mental health is already one of the top causes of disability across the Momentum Corporate client base,” she says. “The many stressors associated with the pandemic and lockdown, from the blurring of work-life boundaries in work-from-home settings to coping with uncertainty and financial pressures, are likely to drive a surge in claims related to mental health.”

According to Van Wyk, corporate financial advisers have a role to play in helping their clients to reignite workplace performance. This will be a priority given the pressure that adapting to the new normal is likely to have on employees’ mental health and the knock-on effect on productivity.

Value-added benefits and professional wellness centres

“Many employees who would normally be able to cope may struggle with the new normal of a COVID-19 workplace, virtual or otherwise,” she says. “There will be a need for support interventions that minimise the risk of disabilities related to mental health as workplaces adapt to the new reality.”

But, not every employer can afford an Employee Assistance Programme (EAP), especially at this time. Van Wyk points out that to remedy this, some large insurers offer telephonic counselling as a value-added benefit within their service offering. “In addition, certain leading umbrella retirement funds also offer basic financial literacy as part of their benefit counselling services. This support may be essential for employees dealing with financial pressures. Work with your adviser to find out what value-added services your service providers offer”.

Van Wyk highlights that when a disability does occur, it’s more essential than ever to make sure your employees have access to professional rehabilitation and wellness services through their insurer. “These services minimise business disruption and facilitate a speedy, efficient return to productivity,” she says.

Behaviour change that helps prevent lifestyle-related disabilities

Van Wyk also advises employers to tap into the heightened appreciation for the value of good health and healthy behaviour that is likely to peak as we emerge from the grip of the pandemic.

“Top group insurance service providers offer engagement programmes which incentivise employees to follow healthy lifestyles as part of their value proposition. Some service providers also reward you as the employer for encouraging employees to engage with these programmes,” says Van Wyk. She explains that employers are able to spend their rewards on employee wellness initiatives or, for employers trying to get back on their feet within the COVID-19 context, on safety measures for workplace integration or to support staff working remotely.


Quick Polls


Which of the following factors will make the biggest difference to the profitability of a short-term insurance brokerage over the next five years?


Implementing tech-backed distribution platforms
Diversifying into specialist risk management & risk advisory services
Renewing focus on the broker-client relationships
fanews magazine
FAnews October 2020 Get the latest issue of FAnews

This month's headlines

Transformation trends - Tough commission procurement rule could dent insurers’ B-BBEE scorecards
Business interruption losses… the uninsurable
Are annuities tailor-made for today’s investors?
Reframing clients’ notions about retirement
In search of sustainable drought solutions
From risk to resilience - What the latest mindshift means for insurers
Subscribe now