Money spent by Australian life insurers on rehabilitation services is cutting income protection claims costs, a study by Swiss Re has found.

Insurers saved between $24 and $39 on claims costs for each $1 spent, but only 5-6% of income protection claimants participated in rehabilitation services during 2013.

“The positive financial impact rehabilitation can have is starting to be understood, and the market is focusing on promoting the intrinsic value of rehabilitation in assisting people to make a recovery and a return to health and work,” Swiss Re Head of Australia and New Zealand Mark Senkevics said.

The report finds rehabilitation success is mostly determined by the claimant’s attitude and motivation.

Insurers initiate a program at least 12 months on average after either the date of the disability or notification.

“There are signs that the market is pressing forward with earlier intervention and engagement, with some insurers offering rehabilitation assistance within the waiting period and potentially prior to claims being lodged,” Swiss Re says.

“When rehabilitation services are being implemented, either by in-house rehabilitation consultants or provided externally, most insurers are able to provide evidence of a return on investment.”

Nine major Australian life insurers provided data and commentary for the study.