A new green paper, released by the Actuaries Institute, has found that the insurance industry faces “systemic difficulties” in the way it deals with mental health across a number of product lines.
The paper found that, while many areas of the industry are improving in their attitudes to mental health claims, an adversarial nature to claimants, alongside a lack of industry data, is hampering progress.
Geoff Atkins, co-author of the report and a principal at Finity Consulting, said that the work has found some “common, root causes” of issues the industry must address to make the system work better for all stakeholders.
“There is definitely a place for collaboration across the sector and then that is really about getting out with the expert providers and consumer representatives,” Atkins told
Insurance Business. “While there is a lot of work being done, it is often done in silos and often not leveraged to the greater good and for other people’s benefit.
“There is a series of initiatives that we think are pretty realistic and practical that if the various people involved with the sector and some government people and some consumer groups were able to get together, there could be some relatively quick wins in terms of improving how that works.”
Atkins said that the industry needs to work on its product design as well as its claims practices and underwriting methods and put aside competitive concerns.
“The companies need to satisfy themselves that this is a joint issue more than it is a competitive issue and then they can provide brainpower and resources to work together on it,” Atkins continued.
Atkins noted that one of the biggest barriers to development has been a lack of data for insurers to monitor mental health claims from. However, Atkins stressed that “you don’t need ideal data” to make progress as the insurance industry has shown in a number of different areas.
For brokers, Atkins said that working with businesses to mitigate the risks associated with mental health claims is an important step as creating a better workplace can have a direct impact on workers’ compensation premiums.
“Workplaces with a strong team morale, collaborative working relationships, a focus on quality customer service and supportive management styles have the lowest workers’ compensation costs,” the green paper states.
With nearly half of the adult population of Australia experiencing a mental health issue during their lifetime, and one in five aged over 15 to be affected by a mental health issue in any 12 month period, the issue is only going to move further into the spotlight for the insurance industry.
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