Staggering cost of mental health is a crisis for insurers
Source: Asia Insurance Review | May 2023
Global life and health insurers are paying up to $15bn a year in mental health-related disability insurance claims according to a new study by The Geneva Association (GA), the leading insurance think-tank.
The study estimates that mental illness affects around a billion people across the globe. It describes the cost of the mental health crisis as ‘staggering’ and says that it is likely to grow.
The ‘destabilising factors’ behind poor mental health include the COVID pandemic, anxiety over the effects of climate change, increased financial insecurity and the cost-of-living crisis. This is leading to lost wages, employment gaps and higher mortality risk.
The report says that though the insurers offer mental health coverage through in-service and prevention innovations such as telemedicine and mental health tracking apps, the policy environment is preventing them from doing more.
GA managing director Jad Ariss said, “Factors like social stigma, non-disclosure of illness and the policy environment make it difficult for the insurers to have a full view on mental health risk and take necessary action.”
The report explores how insurers are boosting their contributions to addressing the mental health crisis and illustrates the magnitude of mental health problems. It examines how life and health insurance are currently addressing mental health. Finally, it recommends how they can build on and scale promising innovations to improve the insurability and state of people living with poor mental health.
The report finds there is significant potential for life and health insurers to expand risk protection to meet society’s needs. A