Full-time workers are more likely to be insured and there are more men working full-time. This issue existed in about half of the countries surveyed, particularly those where overall demand for insurance was lower. This means men are also more likely to have insurance overall.
Income protection solutions
There is a role for private partnerships and government. Appetite for income protection may reflect a reliance on public programmes in countries where a relatively high level of security has traditionally been available.
This could become problematic in countries like the UK with high levels of state support as access to benefits is curtailed, and claims periods are shortened.
The fact that 47 per cent of employees surveyed in the UK would prefer income protection cover as part of a benefits package, even if this means slightly lower take-home pay, shows the potential value of offering income protection insurance through the workplace.
More work could be done to identify the most effective workplace-based solutions and encourage employers to offer income protection benefits to their employees.
The pooling effect or ‘solidarity’ principle of such schemes also makes protection more cost effective. Governments have an important role to play to mitigate income protection gaps and this can be through public-private partnerships.
These may take many forms, for example, Hong Kong and Malaysia, currently sustain a mandatory arrangement. Others, such as Germany and Brazil, use tax concessions to encourage or ‘nudge’ private citizens into making additional personal contributions to supplement ailing state schemes.
A changing workforce
The changing nature of labour markets already has major implications for the way workers access income protection. An increase in short-term contracts, part-time positions and in particular the rise of the ‘gig economy’ is leaving many workers exposed to risk.
There is an urgent need to design new channels for income protection solutions that are both ‘portable’ (across jobs and borders) and appropriate to different country contexts.
We are committed to growing the income protection market in the UK given its social and economic significance.
We believe it has the potential to help the government address the UK's major welfare challenge and create a more sustainable model for UK workers.
Gary Shaughnessy is chief executive, Europe, Middle East & Africa, for Zurich Insurance
