Staggering cost of mental health is a crisis for insurers
Source: Middle East 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 estimated that mental illness affects around a billion people across the globe. It describes the cost of the mental health crisis as ‘staggering’ and 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 said 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.
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.
GA director health and ageing and author of the study Adrita Bhattacharya-Craven said, “The prevalence of mental illness is staggering, and the true number of cases is likely much higher than we estimate. It is disheartening that young, working-age and ethnic minority populations are experiencing mental health problems at higher rates.”
Surprisingly, anxiety and depression – not more complex mental health conditions such as bipolar or psychotic disorders – are the most common types of mental health problems.
The report explored how insurers are boosting their contributions to addressing the mental health crisis and illustrated the magnitude of mental health problems. It examined how life and health insurance are currently addressing mental health. Finally, it recommended how they can build on and scale promising innovations to improve the insurability and state of people living with poor mental health. M