Since the pandemic was declared, Australian insurers have been preparing for a “tsunami of mental health claims”, according to Carly Van Den Akker, Head - Life & Health Claims ANZ, Swiss Re.
While the nation has so far been spared the high mortality rates experienced in many other countries, Van Den Akker said: “a lot” of mental health claims are already coming in from Australians with pre-existing conditions that make them particularly vulnerable to COVID-19, many of whom have to self-isolate and, in some cases, withdraw from the workforce.
Even before the pandemic, life insurance was facing a broader national issue with Australians’ worsening mental health. Claims have doubled and mental illness is now one of the greatest burdens of disease for TPD and disability income insurance claims.
As part of Life Insurance Awareness Week, the FSC published new life insurance statistics on the incidence and duration of mental health income protection claims on a state-by-state level, reminding Australians that no community is untouched by mental health conditions. With the nation now facing a sustained recession, Van Der Akker said she expects the mental illness burden to grow.
Van Den Akker emphasised that the life insurance sector needs to play an ever-greater role in preventing mental illness. “When we are at claim time, we deliver the promise – that’s what people buy as an insurance policy – but how do we keep our policyholders healthy? Those people who pay for a policy but may never need to claim. [The pandemic] is a time where we’ve got a real opportunity as insurers to give wellness offerings to keep policyholders as healthy as we can, particularly from a mental health perspective.”
Lucy Brogden, Chair, National Mental Health Commission acknowledged the proactive work that life insurers had made in product design and claims processes. She said the industry also has a big part to play in the treatment and return to work. “Most people are desperate to get back to work but we know that the longer somebody is out of work, the harder it is for them to get back. There’s a lot of bias within workplaces and there’s not a lot of good knowledge around reasonable adjustment or generally bringing people back to work. I think that’s where the real opportunity lies. The [life insurance] sector has a lot of data and knowledge and we need to work together with employers to work out better return-to-work pathways for people.”
According to Dr Sally Phillips, General Manager - Health Services, TAL, the life insurance sector has previously “been the poor cousin in the background” when collaborative efforts have been made to address mental illness in society. She said life insurers needed “a seat at the table” because they have a “360-degree view of policyholders and claimants.”
“We’ve got data, particularly in the individually underwritten products, around the health of people when they come onto the policy,” said Dr Phillips. “In the past decade, at claim time we’ve come a long way in terms of considering psychosocial factors and really understanding the claimant. It’s not just looking at their medical condition and their diagnosis but [also looking at] the outcome of that.
“We also have the opportunity to see where health services are working and where they’re not,” added Dr Phillips. “We’re not there to say when people should be treated and what treatment they should have, but we might be able to see the gaps and understand what the government-accredited treatment pathways and systems are – particularly telehealth and digital health – and where we can connect people to those services.”
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