Library: Geneva Association – Promoting peace of mind: Mental health and insurance
Close to a billion people around the world live with poor mental health. As the world emerges from the COVID-19 pandemic, health systems are reeling from unprecedented and widespread disruption and contending with a substantial escalation in demand for mental health services.
Sharp spikes can be observed in cases of depression and anxiety in particular – by far the most common manifestation of poor mental health globally. Research on the risks of poor mental health from an insurance perspective is relatively scarce.
Yet, health and life insurers are at the forefront of absorbing the resulting shocks, with close to US$15 billion in claims for mental health-related disability insurance paid out each year. It is thus timely to illustrate the broader landscape of mental health, discuss its insurability and how to overcome related barriers, as well as assess new ways to accelerate the development of innovative approaches to insuring mental health across the industry to keep pace with increased need and societal expectations.
Against this backdrop, this report aims to:
- define mental health and the scale of the burden posed by poor mental health;
- examine the current role of life and health insurance in addressing mental health; and
- recommend steps to boost insurers’ contributions to promoting mental well-being at scale, from prevention to active case management. It does so by combining a literature review with accounts from 16 senior key informants from the insurance industry.
Mental health as holistic state of wellbeing
Good mental health should not be defined as the mere absence of mental illness or mental distress, but as a holistic state of well-being. In accordance with this concept, the terms ‘poor mental health’ and ‘mental health problems’ are used in the report to encompass both mental distress and illness. The pandemic accelerated the uptick in poor mental health globally, affecting different segments of the population unequally.
According to a study by the Institute for Health Metrics and Evaluation (IHME), the pandemic precipitated an additional 53 million cases of depression and 76 million of anxiety disorders globally, and two thirds of those affected were women.
There is also substantial evidence to suggest that the perils of poor mental health have a disproportionate effect on the young, working-age and ethnic minority population.
Poor mental health impacts the economy, individuals, health systems and insurers. A study published by The Lancet estimates that mental health problems will cost the world US$6 trillion in poor health and productivity in 2030, up from US$2.5 trillion in 2010.
For individuals living with poor mental health, this translates to wage and employment gaps and curtailed life chances. Poor mental health has also been linked to an increase in mortality, driven in part by heightened physical morbidity. All of this translates to significant insurance claims. In the U.K., for instance, 27% of income protection claims were attributable to mental health in 2020. In Canada, too, insurers (life and health combined) experienced a 75% rise in claims related to poor mental health in 2021 compared to 2019. Furthermore, as the proportion of claims related to mental health grows year on year in many markets, the well-established link between mental and physical health problems may mean that even health plans that exclude mental health could be affected.
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