The insurance industry has had an uneasy relationship with mental health conditions. A lack of robust actuarial and statistical data has seen blanket exclusions across many product lines, and cover remains hard to come by in some Asia Pacific markets. 

However, as the prevalence of illnesses such as depression and anxiety continues to rise around the globe, insurers must adapt to a future where mental health conditions may become commonplace among their customers. 

Even before COVID-19 swept the globe in 2020, mental health conditions were among the leading causes of global health-related burden. 

Their frequency spiked by 25 per cent in the first year of the pandemic, according to data from the World Health Organization, and the enduring impact on mental health remains to be seen. 

The long-term effect of mental health conditions on the insurance industry is also uncertain. To promote the sustainability of relevant forms of cover, some insurers across Asia Pacific are redesigning products and focusing on early intervention and risk mitigation. 

APAC region response

In countries such as Australia, where almost half of all adults have experienced a mental health condition, research from the Financial Services Council (FSC) and KPMG shows that those who have made a mental health claim are 18 times more likely to claim again, compared with people who have never claimed for a mental health condition.

FSC data also shows life insurers paid A$809 million to 8,500 Australians with a mental health condition in the 2018-19 financial year. 

Carly Van Den Akker, head of life and health claims ANZ at Swiss Re, says the complexity of mental health conditions means the duration of associated insurance claims typically exceeds those of common musculoskeletal claims.

‘This can mean the customer fluctuates in and out of work, which can then lead to a cycle of closing and re-opening claims,’ she says.

‘Looking forward, of concern is the increase seen in adolescent mental health issues.

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