The UK’s largest provider of “income protection insurance” (IPI) has denied that it stands to gain financially from incapacity benefit reforms that campaigners believe it helped to influence.
Unum launched a major media campaign this year aimed at persuading more working individuals to ask their employers to provide them with IPI, which is intended to pay out if they become disabled or ill and are unable to work.
But questions have been raised because the start of Unum’s campaign coincided with the launch of the government’s three-year programme to reassess about 1.5 million claimants of old-style incapacity benefit through a new, stricter test.
Campaigners believe tougher welfare rules could persuade more people to take out IPI.
Although Unum denies it has had “significant influence” on government policy over the last decade, two of its executives – a doctor and an occupational therapist – were involved in “technical working groups” set up under the Labour government, which reported in 2006.
The working groups were asked to review the test – the personal capability assessment – that was at the time used to assess disabled people for their eligibility for incapacity benefit.
Some disabled activists have been trying to persuade parliamentarians that Unum will benefit from the new stricter test – the work capability assessment (WCA) – which emerged from this review process and was first introduced for new claimants in 2008.
A Department for Work and Pensions (DWP) spokeswoman confirmed that two Unum representatives were appointed to the working groups as “recognised experts in benefit assessment and in supporting return to work for people with disability”.
But Tim Jackson, head of marketing strategy for Unum, told Disability News Service (DNS) that the working groups met just once and that the company had had “no further influence” on the design of the WCA.
The DWP has so far been unable to confirm how many meetings the Unum executives attended.
But Jackson also denied that Unum had had any “significant influence” on government policy around welfare reform.
He said: “Like any large organisations, we talk to government, particularly with experts in this kind of area. We are often asked for expert opinions.
“In terms of the design, implementation of the WCA, we had no influence beyond that single meeting.”
Unum is continuing to promote the need for its IPI policies among politicians, sponsoring fringe meetings at each of this autumn’s three main party conferences.
When asked after the fringe meeting at the Conservative conference whether his company had had any influence on the welfare reform agenda, Unum’s chief executive, Jack McGarry, told DNS: “None that we have seen yet. We haven’t tried to influence the welfare agenda around reducing welfare or making it harder to claim. To my knowledge we have not done that.”
He had told the meeting that his company was “really focused on” trying to meet the needs of “the squeezed middle”.
McGarry is a member of the expert panel for the review of the sickness absence from work system, which was announced by the government in February.
Jackson said the widespread publicity around the new tougher benefits regime was helping Unum raise awareness of the issue – particularly among those in the £25,000 to £50,000 “squeezed middle” income bracket who the company is targeting in its new marketing campaign.
He said: “What welfare reform does really is highlight the problem to them. So now is a good time to talk about it.
“The state provides a great safety net for those who are most at risk and exposed, but for those in the squeezed middle range it will not support their lifestyles. We asked some journalists [as an experiment] to live on ESA and they found it extremely difficult.”
He said the “tightening” of eligibility for out-of-work disability benefits was “a backdrop that gets people to realise that if they thought they were protected they are probably less so. It gives us a backdrop to have a good conversation. It is a backdrop that makes people more sensitive to the issues.”
When asked whether he was comfortable with the idea that the impact of the welfare reforms on disabled people – particularly with the WCA – would boost Unum’s profits, he said he did not “necessarily accept that the fear is acting to increase our profit” and had not “seen any evidence” that that was happening.
He added: “The backdrop is the way it is. It gives the impression that the welfare state is receding or dropping away. Whether welfare reform goes ahead, whether the WCA changes, whatever happens, we would still be doing what we are doing.”
McGarry also claimed that tightened eligibility for incapacity benefits was “not useful financially for us”.
He added: “The awareness of the risks people face in how inadequately they are protected does help us, but our belief is that is an important conversation to have, irrespective of welfare reform. The fact that people are talking and aware of the need for protection is useful.”
The disabled activist who has done most to raise concerns about Unum’s influence is Mo Stewart, a retired healthcare professional and veteran of the Women’s Royal Air Force (WRAF), who has been researching Unum for the last nine months.
She first became interested in the private sector’s role in welfare reform after being visited by a doctor employed by the company Atos Healthcare, who was conducting a medical assessment for her war pension.
She said: “The doctor who visited me actually refused to offer any form of ID, resisted eye contact, advised I was only ‘permitted’ to speak in answer to any questions and produced a totally bogus report.”
She said her subsequent research led her to identify what she believes is Unum’s involvement with the UK government over the last two decades.
She believes the company has long planned to “flood the UK market with income protection insurance now that the welfare of disabled UK people is no longer guaranteed by government”.
Jackson denied that Unum’s major marketing push, which began with public relations efforts this spring, was timed to coincide with the launch of the government’s three-year programme to reassess all claimants of old-style incapacity benefit through the WCA.
He said: “There was no connection with that whatsoever. Why now is [that] somebody should have done it before, but the industry has not. It is fresh thinking on the part of senior management.
“And today, given the current economic climate and discussion about welfare reform, is a good backdrop for the discussion to happen.”
He said persuading employers to take out such policies “helps them support their staff, helps with retention and to manage the costs of absence in the medium to long term”.
And he insisted that “treating customers fairly” through the WCA process was “absolutely critical” but that it was “for the government to make sure the WCA does that and for parliament to hold them to account in that respect”.
Jackson also admitted that there had been widespread criticisms of Unum’s past actions in the US – mainly over its refusal to pay out on genuine insurance claims by disabled people – while McGarry admitted in the Conservative fringe meeting that the “general public doesn’t trust insurance companies”.
Jackson said: “There has been criticism written of Unum in the US. What I would say [is] in the UK we take our obligations and duties for treating customers very, very seriously and we have market-leading claims-handling processes and we do our very best to make sure we treat customers fairly throughout that process.”
6 October 2011