Insurers Investec Life and Liberty are both observing a significant increase in mental health concerns from their client bases, echoing a global trend highlighted in June 2022 when the World Health Organization (WHO) released a report showing that mental disorders are now the leading cause of years of healthy life lost to disability worldwide.
As high-income clients have access to comprehensive medical care, they are more likely to get diagnosed with any issues much earlier than the rest of the population, confirmed Investec, which has a higher proportion of living benefits claims compared to death claims than most of its peers because clients having relatively better access to doctors and costly tests.
“We’re definitely seeing mental health come through as something of which we need to be aware and to which we must adapt,” said Investec Life CEO Darren Behrendt.
Liberty, which has also recently flagged the rise in mental health claims, also predominantly serves high-income earners, reports News24.
“This is not a problem just for our clients. It’s a problem across all socioeconomic classes,” added Behrendt.
After depression and anxiety cases surged by more than 25% in the first year of the Covid-19 pandemic, the WHO estimates that roughly one in eight people worldwide live with a mental disorder. It also found that people with severe mental health conditions can die up to two decades early from preventable physical diseases.
Yet a history of mental health problems still causes many people to face insurance exclusions or higher premiums in the form of loadings ranging from 5% to 200% more than consumers without those issues.
Investec Life said it’s time to review the underwriting of mental health as more research has become available, with Sinenhlanhla Sithomo, head of insurance business at Investec Life, saying it took some time to get the underwriting for HIV, cancer and lifestyle diseases right too.
Complicating mental health-related issues is that, unlike physical illnesses, it’s not easy to accurately assess their progress and effect on the person by putting them through CT scans and X-rays.
“In the insurance space, how we define mental health and how we cover mental health has always been one of the challenges,” he said.
Assessment advances
The company was forming partnerships with international players who are working on advancing medical technology that could offer them “a more holistic way of assessing the risk of mental illness”. For instance, the company wants to look beyond the psychological and biological aspects of mental disorders.
Sithomo believes social circumstances can aggravate or lessen the impact of mental disorders. For instance, someone with a supportive family and children is likely to have a different outcome from a person who is alone or who doesn’t adhere to treatment regimes.
“In our processes, we’ve asked, are we fair to clients in how we underwrite them if they have mental health issues? At the claims stage, do we pay in a fair manner compared to physical ailments?” said Sithomo.
If it gets this correct, innovative underwriting of mental health could set the company apart from many of its peers. The five-year-old insurer is still finding its feet in the SA market dominated by centuries-old insurers.
Behrendt believes this is where it can differentiate itself while making a difference that can change the industry.
WHO mental health report
See more from MedicalBrief archives:
Mental health illness toll on life expectancy – South African study
The triple A approach to tackling South Africa’s mental health challenges
Psychiatrists group urges government to spend more on mental healthcare