Partner Content?Zurich
share icon
Blue Zurich logo

Top actions: how can your company help employees prevent income protection gaps?

Be an employer of choice by helping individuals to close potential income protection gaps before they occur.


Be an employer of choice by helping individuals to close potential income protection gaps before they occur.

Watch the video above to hear from Gary Shaughnessy, CEO EMEA, Zurich Insurance Group and Chair of Z Zurich Foundation, who presents the top actions employers and insurers can take to work together to prevent income protection gaps.

Living longer allows us to earn more by working longer.  However, as we get older, there is also the risk that we may not be fit enough to work for at least part of our career.

Have you thought about what would happen to you or those you support if you were unable to work due to things like sickness or disability?  How long would your savings would last if you lost your income?

We define such an income protection gap (IPG) as a reduction in household income due to serious illness, disability or another severe reason of the primary salary earner, taking all public and private sources of replacement income into account.

The evolution of the social protection landscape over the past half-century shows an increase in the growth of personal responsibility in ensuring households’ long-term financial well-being. According to Professor Gordon L. Clark, the director of the Smith School of Enterprise and the Environment, University of Oxford, there are three different institutions, “family, the employer and government. In some countries where government has had a historically important role in filling an unexpected shortfall in income, people will automatically bypass both the family and the employer and look to the state for support.” But where government is no longer able to step in, simply put, there's an increasing burden on the individual to make their long-term-financial security a reality.  This burden is far too great for many individuals to bear.

A series of practical recommendations for change, as well as how multiple stakeholders (including employers, insurers, governments, and individuals) can ease this growing burden on individuals to ensure long-term financial security are outlined in the report, Embracing the income protection gaps challenge: options and solutions. By working together, these stakeholders can help prevent IPGs, and to close existing gaps in individual household incomes.

Employers are a key part of the solution to guide and motivate individuals. One recommended solution is for employers to include income protection as part of their employee benefits, maximizing coverage through auto-enrollment and auto-escalation. Another key recommendation is for employers to host financial education programs to support their employees.

Other recommendations are around driving workplace-based solutions. One example is for employers to offer health check incentives to employees.  Incentivizing people to have health checks not only create awareness but also can lead people to have healthier lifestyles and so reduce health-related costs.


Social protection: From precarious to outmoded (pdf)

Embracing the income protection gaps challenge: options and solutions (pdf)