Changing minds: How can insurers make a difference on the mental health journey?
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Sinenhlanhla Sithomo - Head of Insurance Business: Investec Life talks about A December 2021 report by the Chief Risk Officer’s (CRO) Forum shows that over the past decade there has been a significant shift in insurance claims from physical to mental health with ailments such as burnout, anxiety, and depression overtaking musculoskeletal impairments and neurological diseases. With the latest data from the SA College of Applied Psychology indicating that only 27% of severe mental illnesses in the country are treated, Sithomo says undiagnosed mental health conditions could be a hidden crisis facing the insurance industry.
“As an insurer your biggest risk isn’t actually the people who are disclosing their mental health issues, it’s the people who aren’t aware of their condition and aren’t being treated,” says Sithomo. “Once your mental health claims start ticking up above your musculoskeletal claims your amber flags are no longer amber, they are red flags at that point.”
One challenge for insurers is that developing objective diagnostic measurement tools for mental health conditions is not as cut-and-dried as doing so for medical conditions such as cancer or heart disease. When assessing mental health risk underwriters have to rely on questionnaires, which have traditionally given insufficient consideration to clients’ social support structures, often resulting in adverse underwriting outcomes for applicants that should have been deemed low risk.
“Clients who proactively seek care and disclose a mental health condition also tend to receive harsher underwriting outcomes compared to those who do not seek care and remain undiagnosed,” says Sithomo. “This is why it’s critical that we begin to transform our underwriting protocols and incorporate as many of the biopsychosocial factors in risk assessment for clients with mental health conditions.”
Interestingly, Sithomo says the catalyst for placing greater emphasis on mental health conditions has not been the economic stresses that have surfaced in the wake of Covid-19. In fact, he says Investec Life first began looking at mental health in 2018 when advisers began reporting increased mental health complaints from young doctors.
Since then, the insurer has been looking at ways to better assess the mental health of its fairly well-off client base with Sithomo saying rising income protection claims attributed to mental health are regarded as the “first amber flag” that the client population is under stress.
A sustained increase in these claims is typically followed by a spike in long-term disability lump sum claims from mental health related issues. Unfortunately, these claims are often followed by increased death claims from suicide.
While suicide typically has a two-year exclusion for claims, once that time period has passed insurers are liable to pay out meaning it is in both their and their clients interest that mental health interventions take place earlier rather than later. Improving the identification of mental health risks during the underwriting process is one way to do this but stigma can be a problem, particularly among male clients.
“As life insurers, we can contribute towards the destigmatisation of mental health by making changes in the way we underwrite these conditions,” says Sithomo. “Greater awareness will go a long way towards destigmatising mental health as people begin to better understand their own mental health status and become open to disclosing the potential challenges they encounter when they seek out treatment. This shift is certainly in the interest of the life insurance industry.”
“As an insurer your biggest risk isn’t actually the people who are disclosing their mental health issues, it’s the people who aren’t aware of their condition and aren’t being treated,” says Sithomo. “Once your mental health claims start ticking up above your musculoskeletal claims your amber flags are no longer amber, they are red flags at that point.”
One challenge for insurers is that developing objective diagnostic measurement tools for mental health conditions is not as cut-and-dried as doing so for medical conditions such as cancer or heart disease. When assessing mental health risk underwriters have to rely on questionnaires, which have traditionally given insufficient consideration to clients’ social support structures, often resulting in adverse underwriting outcomes for applicants that should have been deemed low risk.
“Clients who proactively seek care and disclose a mental health condition also tend to receive harsher underwriting outcomes compared to those who do not seek care and remain undiagnosed,” says Sithomo. “This is why it’s critical that we begin to transform our underwriting protocols and incorporate as many of the biopsychosocial factors in risk assessment for clients with mental health conditions.”
Interestingly, Sithomo says the catalyst for placing greater emphasis on mental health conditions has not been the economic stresses that have surfaced in the wake of Covid-19. In fact, he says Investec Life first began looking at mental health in 2018 when advisers began reporting increased mental health complaints from young doctors.
Since then, the insurer has been looking at ways to better assess the mental health of its fairly well-off client base with Sithomo saying rising income protection claims attributed to mental health are regarded as the “first amber flag” that the client population is under stress.
A sustained increase in these claims is typically followed by a spike in long-term disability lump sum claims from mental health related issues. Unfortunately, these claims are often followed by increased death claims from suicide.
While suicide typically has a two-year exclusion for claims, once that time period has passed insurers are liable to pay out meaning it is in both their and their clients interest that mental health interventions take place earlier rather than later. Improving the identification of mental health risks during the underwriting process is one way to do this but stigma can be a problem, particularly among male clients.
“As life insurers, we can contribute towards the destigmatisation of mental health by making changes in the way we underwrite these conditions,” says Sithomo. “Greater awareness will go a long way towards destigmatising mental health as people begin to better understand their own mental health status and become open to disclosing the potential challenges they encounter when they seek out treatment. This shift is certainly in the interest of the life insurance industry.”
