Life insurers lag behind the general insurance workers’ compensation sector in returning disability claimants to work, according to AMP.

Director of New Business Claims and Underwriting Malcolm Weir says the life industry tends to pay disability claims rather than seek other solutions.

“As an industry we pay all legitimate claims, but that creates issues of sustainability,” he told the Financial Services Council life conference in Sydney last week. “We have a medical approach to claims and there is an opportunity for other approaches.”

CGU Head of Workers’ Compensation Jen Mitchell says insurers in her sector now seek “certificates of capability”.

Banyan Work Health Solutions CEO Maria Vandenhurk told the conference this change in approach began in Canada about 20 years ago.

“It was about financial pressure on the insurers,” she said. “Insurers were demutualising and there was a lot of shareholder attention on claims. They were still following a medical approach and that was leading to a lot of claims being unsustainable.”

Now insurers encourage people with disability claims to return to work, even on a part-time basis.

“The paradigm shift… was good for everybody,” Ms Vandenhurk said. “There is research saying people who work are more healthy, and being off work was life-threatening.”

The change also led insurers to look at the causes of disability events.

“We have now seen in Canada most insurers moving away from pure medical management, but there are still some companies sticking to the older way of dealing with [disability] claims.”

Ms Vandenhurk says courts now ask about work placement before making decisions in disability cases that reach litigation.

But changing to a return-to-work approach cannot happen overnight. She says it took about 15 years to become mainstream in Canada.

“I see Australia as in the eye of the storm with disability claims management,” she said.