ESTONIA: Life and health insurance promotion through tax incentives needed for dealing with the raising occupational accident statistics

In recent years the number of occupational accidents recorded by the Estonian Labor Inspectorate grew continuously, from about 3.000 in 2009 to approximately 4.000 in 2013. Only last year SEB Elu-ja pensionikindlustus registered 33 occupational accidents, paying its clients over 12.000 euro, the insurers' representatives told the Baltic Course. In this context, Estonian employees are severely under-insured for the risks arising from their occupational profile.

 "The rise in the number of occupational accidents may be chalked up to the increased awareness of parties to the employment relationship and a decrease in the concealment of occupational accidents. Regardless of the increased accuracy of occupational accidents statistics in Estonia, the number of occupational accidents happening to employees is not declining, and Estonia's workforce is severely under-insured. Often, occupational accidents result from the company or its employee breaching occupational safety requirements, with a third of the accidents related to falls at work, which may result in injury. On average, 45 days are spent away from work because of treatment for occupational accidents," said Indrek HOLST, Chairman of the Management Board of SEB Elu- ja pensionikindlustus.

Although people's awareness of the need to insure their lives and health has improved, in most cases employees' lives are not insured, mostly because life insurance is still considered too expensive. As far as employers are concerned, many of them started considering that to conclude life insurance contracts for their employees means to mitigate the risks for the company and show a responsible behavior. As a result, "they include life insurance in their corporate motivation packages," as HOLST said. However, insurers believe that the government and the private sector could go a long way by working together on mitigating social risks for citizens and promoting risks coverage through insurance, which would be a good way to help people get through difficult times after temporarily losing their labor capacity due to an occupational accident.

By providing tax incentives for contracts concluded by both individuals and employers, life and health insurance would be the reasonable thing to do for the government, especially considering that risk premiums for coverage are small and such incentives would not constitute a huge load for the national tax revenue. "The incentives provided for employers would be of much greater significance, since they send a clear signal to society that the state promotes the contributions of employers towards the security of their employees," said HOLST.

Share |