Demographic Changes Challenges and Good Practices for Accident by fionan


									 Demographic Changes: Challenges and Good Practices for
                            Accident Insurance Systems
Bogota, Colombia, 28-29 October 2008

Challenges for accident insurance systems

Stefan Zimmer
Director of International Relations
German Social Accident Insurance

                                       ISSA/DEMO/TECH SEMI/BOGOTA/2008
Challenges for accident insurance systems

Stefan Zimmer
Director of International Relations
German Social Accident Insurance

First the bad news: of the various challenges for accident insurance systems we have
talked about in recent years within the International Social Security
Association (ISSA), the International Labour Organization (ILO) and other
organizations, none has been fully answered so far.

Some of you may recall the last seminar of the ISSA Technical Commission for Latin
America, held in Buenos Aires in 2005 together with the Superintendencia de
Riesgos de Trabajo (SRT).

Many of the challenges identified three years ago (not exclusively pertaining to Latin
America) still have to be recognized and still await an answer.

The good news is, however, that answers are out there.

But they need being taken out of abstract theoretical debates and conference papers
and made applicable by practitioners of workers compensation. – Well, that’s us.

ISSA, ILO, WHO and other organizations, perhaps even regional communities such
as the European Union or MERCOSUR, may play an auxiliary role as facilitators of
implementation strategies.

But in the end it is on us, where the responsibility lies: on us, the managers of various
national workers compensation schemes: statutory or voluntary, private or public,
commercial or non profit.

Before talking about some good practices for coping with current challenges to our
systems, allow me to first give you a rough overview of how challenging they really

You are probably familiar with these data:

According to estimates by the International Labour Office for occupational accidents
and diseases, there are globally about 2.2 million work-related deaths, every year.

The – by far – largest share of work related fatalities is not made up by accidents but
by diseases: between 1.7 und 2 million deaths per year.

                                     Stefan Zimmer

For the countries in Latin America the ILO estimates that roughly 150,000 fatalities
are caused by work, every year.

Of all these work related mortalities accidents account for only 26 per cent.

The largest share – as on the global level – is caused by occupational diseases:
probably 110,000 each year.

You can already tell from these rough data that the old (and new) challenge
confronting insurances against occupational accidents and diseases is made up by
occupational diseases.

As our ISSA Technical Commission identified in a recently concluded global cycle of
seminars on this topic, this challenge forces us to find answers particularly for

•    the prevention, detection and reporting of occupational diseases; and

•    the protection of workers in the informal economy against occupational

Occupational diseases
Throughout our cycle of seminars – beginning in Cyprus in 2003 and followed by
events in Argentina in 2005, the People’s Republic of China in 2006 and last year in
Cameroon, Africa – many examples were presented, which show us how much work
has yet to be done in order to provide for accurate statistics, sound administration
and efficient compensation of occupational diseases.

Many countries, particularly in East Asia, Africa but also in Latin America are
challenged by massive underreporting of occupational injuries.

In some Sub Saharan countries, as few as 3 or less occupational diseases are reported
on an annual basis.

What are potential reasons for underreporting?
It can only be assumed that they are similar to those in most developing countries
with young workers’ compensation systems and, most important, with few or
insufficiently skilled occupational physicians who have difficulties recognizing ODs.

In these regions, especially, capacities for diagnosis, recognition and recording of
ODs need to be strengthened, in order to combat underreporting.

A second major problem in the context of occupational diseases is made up by the
large number of workers completely off the social security radar screen.

I am talking about the huge percentage of workers in the informal economy.

                                    Stefan Zimmer

  Covering the informal sector
  As a legal term, occupational disease only applies to compensatable diseases caused
  by work.

  In order to be compensated for any ailment caused by work a worker per definition
  has to be covered by a workers’ compensation or accident insurance scheme.

  Diseases caused by work in the informal (thus uncovered) sector usually do not
  appear in national statistics on occupational safety and health.

  Workers in the informal sector normally go without coverage and compensation, but
  also without health supervision and assistance in prevention.
  However, in many countries they make up the by far largest share of the national

  Table 1.        Workers’ compensation system coverage

                                                                   P. R.
Pakistan Egypt Bangladesh India Venezuela
                                                                   China Thailand Colombia
 2.3%        9.11%          10%           10%          12%         12.3%   15.7%     31%

  Source: ILO (2006), Occupational safety and health country profiles, Geneva.

  In the third seminar on occupational diseases, in Buenos Aires in 2005, our friend
  Carlos Aníbal Rodriguez from Argentina (now minister of labour in the province of
  Santa Fe) reported that in Latin America 7 out of 10 new jobs were created in the
  informal economy - largely unprotected by social security.

  Similar, if not worse, problems occur in Africa:

  In the United Republic of Tanzania for instance, (with a population of
  36 million people) the workforce is estimated to be 10 million. Of these, only
  1 million (10 per cent) are in formal employment and only 400,000 are insured by
  the National Social Security Fund.

  In Asia, various countries encounter the same dilemma: In Vietnam, for instance,
  only 14.5 per cent of the workforce is covered by social security.

  As was specifically addressed in our seminars by experts from Latin America, the
  large share of informal workers somehow needs to be included into the (public)
  system of healthcare supervision.

  It is estimated, that only between 5 per cent and 10 per cent of workers in Latin
  America have access to adequate occupational healthcare services.

                                            Stefan Zimmer

We, as accident insurances, can play a crucial role in bridging this existing gap, since
we have the expertise and the experience in the field of occupational diseases which
the public healthcare system often lacks.

One step could be made by providing general medical practitioners – not specialized
in occupational medicine – with at least some guidelines on how to recognize
occupational diseases.

By publishing and distributing “OD-bulletins” of not more than 3-5 pages, at least
the awareness of doctors can be raised to inquire potential links of a disease with
exposure at the workplace.

Accident insurances could publish such bulletins on the internet and provide
comprised information on what kind of ODs are most common in a specific region,
how to detect them and whom to report.

This was just one good practice suggested by experts in our cycle of seminars.

I don't want to go into more details on the various results of our seminars at this
point in time. If you are interested in the seminars and the reports delivered, please
have a look at these web-pages1:

•      Seminar II (Latin America, 2005):

•      Seminar III (Asia, 2006):

•      Seminar IV (Africa, 2007):

Demographic change
Ladies and gentlemen, in his opening remarks yesterday Dr. Breuer already pointed
out how demographic change already does or will impact accident insurance systems,
around the world. He highlighted the situation in the People’s Republic of China,
Japan, Europe and Latin America.

In a nutshell, we are confronted with two core developments:

•      an overall ageing of the working population; and

•      a decrease of the labour force potential in many, mostly industrialized

       1If you send me an Email, I would of course be happy to provide you with these links, so you don’t have to
copy them now.

                                               Stefan Zimmer

For Germany, it is estimated that by the year 2030 people aged between 60 and
69 years will be the largest age group among the entire population. Today it's the
group of people aged 35 to 44.

In light of the fact that today only 25 per cent of all people between 60 and 65
(the current retirement age) are in employment, we have to find ways to keep more
older workers employed, in the future.

Since the overall labour market potential is decreasing in the next decades, we
otherwise will face a deficit of technically skilled workers in our country in the
coming years.

This development comes with a bill attached:

By the year 2030 the deficit of skilled workers will have cost us a total of
EUR 4.6 Trillion (that is 4,600.000.000.000 Euro or
Colombian Pesos) – if we don't find a solution.

How do we go about this challenge?
First of all, if we want to employ more older workers, there is the obvious need for
adapting work places to the needs of an ageing workforce.

In most trades and professions today the work load is not adapted to age, which leads
to excessive demands on physical and mental health.

How can working conditions be changed and adapted
to a workers’ age?
One example is an assembling workplace with non reflecting worktops; height
adjustable chairs with adjustable backrests in order to support the lumbar spine;
footrests for the load relieving of the legs; individual arrangements of work
equipment in order to allow for an individual workflow, etc.

Or, take an adapted office workplace, with additional support for the musculo-
skeletal system and adapted visual display units, including
big screens, big fonts, clear contrasts etc.

Now, you may ask: How can employers be attracted to implement these – doubtless
costly – features? Why not simply employ a younger worker, instead?

Who could convince employers to invest in safe and healthy
workplaces for older workers? – Can we do it?
We, as accident insurers, can activate employers for occupational safety and health
by granting economic incentives for adapting workplaces to an ageing workforce.

                                   Stefan Zimmer

We can do this either by lowering contribution rates for accident insurance, by
awarding monetary prizes for exemplary prevention activities or by granting
subsidies for investments in age adapted workplaces.

But, ladies and gentlemen, adapting our prevention efforts to the needs of an ageing
workforce is only one side of the medal.

Demographic change not only challenges us in the field of prevention.

It also demands us to find answers for the rehabilitation and reintegration of workers
after an occupational accident.

A shrinking workforce implies the necessity to use all rehabilitating measures (such
as “return to work” programmes) to keep a decreasing number of people in working
age fit for work – even in the case of reduced physical capacity.

According to figures from the International Labour Organization, an estimated
386 million of the world’s working age people are disabled.

In light of demographic change, social security institutions are not only morally
obliged, but also economically, to strive for their successful rehabilitation.

After all, reintegrated workers with disabilities have the potential to make a valuable
contribution in the workforce, as employees, entrepreneurs or employers of others.

However, many disabled people who are willing and able to work are unemployed –
as many as 80 per cent in some countries.

Frequently, this large unemployment exists because employers assume that people
with disabilities or older workers are per definition unable to work and they are
unwilling to give them the opportunity.

Often, it is because these people have not had access to training in employable skills,
or because the support services they require are not available, or because of
unsupportive legislation and policies.

The resulting loss is felt at every level, not only by disabled or older people and their
families, but also by employers and the wider society.

Special measures for disabled and older employees are indicated, as shown by
international experience.

For example, a Japanese automotive company increased its productivity by ten
percent by allowing its production lines to run at different operating speeds for
different age groups.

Companies can save money with measures of this sort.

For accident insurers, this constitutes an important prerequisite for the financial
sustainability of the system.

                                     Stefan Zimmer

Medical Rehabilitation and professional reintegration are good avenues of approach
towards meeting the effects of demographic change on our branch of social security.

In particular, the concept of disability management can be an answer to this

Disability management is geared not towards care for disabled people, but to their
motivation to become healthy and capable of working, again.

Through a combination of prevention and rehabilitation, health impairments
resulting from accidents and illnesses can be identified in time, their impact on the
enterprise can be assessed, and measures geared towards occupational participation
put in place.

In 1997 the Canadian National Institute of Disability Management and
Research (NIDMAR) began developing a training program and test procedure for
disability management, based on a code of practice setting out the requirements

This code of practice has since been recommended by the International Labour
Organization (ILO).

Various countries, Germany among them, subsequently acquired, on behalf of
employers and employees in their countries, all rights to use the training program
and the tests.

According to the internationally recognized and protected curriculum for “Certified
Return to Work Coordinators” (CRTWC) and “Certified Disability Management
Professionals” (CDMP), rehabilitation experts are now trained by Accident
Insurances in Canada, Australia, United Kingdom, Ireland, New Zealand and 8 other

In Germany, alone, we have trained and certified over 500 disability managers
during the last four years.

The German Social Accident Insurance (Deutsche Gesetzliche Unfallversicherung,
DGUV) also assumed responsibility for setting up a body for voluntary audits in

We thus can certify companies who make great efforts in implementing disability
management strategies in order to reintegrate disabled workers.

Companies may then use the certificates awarded to them for their own sales
promotion and to distinguish themselves from competitors as socially responsible

Globally, about 200 companies have so far been certified and – through their
disability management – were able to retain or re-integrate personnel with
disabilities which otherwise would have been laid off from work.

                                   Stefan Zimmer

They were able to safe between 30 per cent and 50 per cent of disability costs due to
this newly implemented management tool.

As you can see, for accident insurances there are indeed ways to offer incentives not
only for prevention, but also for rehabilitation and disability management.

If you are interested, and for some detailed success stories from different countries,
please have a look at this web page:

Ladies and gentlemen, I began my statement by claiming that not only “old” and well
known challenges still need being answered but that in the wake of demographic
change new challenges are on the rise.

ISSA and its Technical Commission for accident insurance understand their roles as
that of facilitators of good practices in answering these challenges – old and new.

Our cycle of seminars which was concluded last year sought to identify simple
strategies for preventing, detecting and reporting occupational diseases.

The results can be downloaded form the internet as I indicated earlier.

And while occupational diseases still pose the biggest challenge to workers
compensation systems in many countries, new challenges emerge and new answers
need being identified.

Demographic change has a very specific impact on accident insurance systems,
depending on the region of the world, the level of industrialization, birth rates, etc.

There is no “one size fits all” answer for all systems around the world.

But there are two promising paths leading towards potential answers.

One is the adaptation of workplaces to the needs of an ageing workforce.

We, as accident insurers can offer suitable incentives for employers to follow this

The other path is that of intensifying our efforts in the professional rehabilitation of
workers after an occupational accident or an occupational disease.

Older workers as well as people with disabilities must be seen as assets to the social
security system, not as liabilities!

I strongly believe that accident insurers can set incentives in order to attract
enterprises to embrace this view and act accordingly.

                                     Stefan Zimmer

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