13 November 2017 Insurance

Success factors in disability scheme management: lessons for LatAm

Latin American ceding companies can gain key insights from abroad, particularly from Europe, Philippe François, global head of business development, AXA Life and Health Reinsurance, told FIDES Today.

“AXA is a market leader in disability schemes management in France, where we manage several billion euros in disability premiums. We have used our knowledge to share best practices in disability management with our ceding companies in the Netherlands, Scandinavia, and Australia,” François said.

AXA Life and Health Reinsurance is now developing its footprint in Latin American markets such as Chile. Beyond technical excellence and financial strength, AXA Life and Health Reinsurance draws upon its vast experience to partner with insurers for long-term success using its world-class expertise.

He added: “Each market has its own history and nuances, and it is key to respect these local specificities, but we have identified universal lessons that can help all insurers Our successful track record and long history on three continents bears this out.”

An example, he noted, is where large variations exist in the levels of disability claims in different markets. These are often closely linked to the definition of disability used to manage those schemes.

“The evaluation of disability is also essential to manage these schemes efficiently. Best practices can be shared to put in place the right process to evaluate whether a person is disabled or not,” he said.

There are also big differences in the way disability is managed. On this aspect, best practices can also be shared with local insurers. These include ‘return to work’ programmes, which are not used in many countries today.

François noted that AXA has experience in leveraging return to work programmes to reduce overall claims and shorten the duration of disability.

“It is better for the individual and means the claim has a lower value,” he said. “Claims duration depends on how individual claimants are managed and helped.”

Francois also noted the growing importance of mental ill health. In France, for instance, some 30 percent of disability claims can be linked to mental illness. AXA helps to alleviate this problem in France thanks to specific providers implementing action plans co-created and co-signed by the claimant.

He expects strong growth in some countries in Latin America in this business line, notably in those where there are fast-growing middle classes.

Thanks to AXA’s experience as a primary insurer of this risk in markets such as France, and as a reinsurer in many other markets, the company can use its experience to help its local clients manage this complex disability risk efficiently, he said.

“We can help through the entire cycle of disability, starting with risk management and pricing and taking a step further to discuss how claims are managed,” François said.

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