Life insurer funding of illness and injury recovery programs could save the Government $1.2 billion in healthcare costs over the next two decades, an industry study shows.

The report by Cadence Economics – commissioned by the Financial Services Council and sponsored by BT and MetLife – says reforms allowing the industry to be more involved in rehabilitation could help 1379 people a year, on conservative estimates.

Return-to-work times could improve by 5-13 weeks, while the GDP benefit could reach $405.7 million by 2040, Cadence estimates.

A Parliamentary joint committee is considering whether to let life insurers fund medical rehabilitation services. A final report will be released by September 20.

“This research clearly demonstrates to policymakers that the changes proposed by the Financial Services Council would deliver better outcomes for all Australians with a simple reform to existing legislation,” council CEO Sally Loane said.