The Actuaries Institute has released a Green Paper reviewing how Australia's insurance industry deals with people with mental health conditions.
It found significant work needs to be done to improve public and commercial policy around insurance for those who suffer a mental health condition.
The Institute’s “Mental Health and Insurance Green Paper” key findings:
The insurance sector faces ‘systemic difficulties’ dealing with mental health coverage.
- Many insurers are improving claims processing.
- Progress is hampered by insufficient data and subjective criteria for diagnosis.
- The claims process can be adversarial and in itself lead to ‘secondary mental harm’.
- There’s a bias against early intervention that can hinder a claimant’s recovery and return to work.
- Insurers face real challenges to sustainability.
The Green Paper states the insurance sector “faces systemic difficulties in dealing with mental health coverage.”
It said the industry needs better data to more effectively deal with diagnosis and claims, and the claims process, which can be long and adversarial, can sometimes hinder recovery. The Green Paper also questioned whether lump sum payments help recovery or encourage a return to work, which can be in the best interests of the claimant.
"Insurance products need to strike a balance between meeting the needs of people who suffer the loss covered, and being affordable to those who are at risk of such losses," said Geoff Atkins, principal at Finity Consulting, and co-author of the report with Sue Freeman, also from Finity Consulting.
“Insurers must be financially stable and solvent. This has to be balanced against society’s confidence in the system that legitimate claims are paid,” Mr Atkins said.
For a copy of the Green Paper, please download here.