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Navigating New Horizons: Embracing Mental Health Challenges in the Insurance Industry

07 September 2023 Shanique Jina, Underwriting Manager at Bidvest Life
Shanique Jina

Shanique Jina

The prevalence of mental health disorders in our country continues to rise, presenting both challenges and opportunities for the insurance industry. To address this growing trend, insurers and financial advisers must adapt their strategies and develop a deeper understanding of mental health conditions.

Before the pandemic, one in three South Africans was likely to experience a mental health issue at some point in their lifetime1. However, the pandemic's aftermath has exacerbated this tension, leading to significant mental health ramifications due to joblessness and other factors2. Healthcare professionals, insurers, and financial advisers are now actively engaging in discussions to address the rise in mental health disorders and its implications.

Underwriting impact
The surge in mental health conditions presents a new set of underwriting challenges. Accurate risk assessment is paramount, which means understanding the correlation between mental health conditions and their prognosis. By doing so, insurance processes can better reflect the associated risks of these disorders.

When it comes to mental health, South African insurers predominantly deal with anxiety, depression, and bipolar disorders. These conditions are complex and understanding them helps insurers better assess and underwrite risks associated with each.

Anxiety Disorders:
While anxiety disorders are the most common group of mental health disorders, full remission rates remain low. Whether symptoms are chronic or recurring, insurers must be sensitive to the social impact of anxiety disorders as they can affect an individual's social life and productivity at work. All cases of anxiety disorders are complex and each one must be assessed on an individual basis.

Depressive Disorders:
Depressive disorders are characterised by a persistent feeling of sadness and can severely impact an individual's ability to function in day-to-day life. It's vital for insurers to consider the impact of depressive disorders on mortality and morbidity, including the heightened risk of suicide.

Bipolar Disorders:
Bipolar disorders present significant long-standing risks, including increased mortality and morbidity. Assessing the course of the illness, social implications, suicide risk, and other causes of increased mortality is crucial in evaluating risk. The morbidity risk associated with bipolar disorder is substantial, affecting occupational and social functioning for many individuals. In fact as few as one-third of individuals recover full occupational or social capabilities, and in some community studies as many as 65% of individuals were unemployed, with 40% of these receiving disability or assistance benefits.

The Assessment Process
Guidelines from the South African Society of Psychiatrists (SASOP) offer valuable insights into the management of impairment claims on psychiatric grounds. It’s important that treatment is focused on strengthening an individual’s resilience and aims to support their ability to resume work. Disability assessment is a legal decision, not a medical one, involving experts from various fields. A holistic evaluation of an individual's impairment needs, job description, policy disability clause conditions, and personal factors is essential in this process. The decision is taken by a panel of experts including a medical advisor, legal advisor, and claims consultant. The doctor treating the patient cannot express an opinion on disability. To assess disability entails assessing the extent of the person's impairment needs in conjunction with their job description, policy disability clause conditions and personal factors such as education and experience.

Rethinking the Underwriting Process
With the growing prevalence of mental health disorders, traditional underwriting processes must evolve. By developing a deeper understanding of mental health disorders, insurers can enhance risk assessment and better address the scope of these challenges.

Promoting Mental Health Practices
As we navigate uncharted territory, increased awareness, early identification, and enhanced support for mental health issues are critical. Insurers need to embrace a more holistic view, recognising their role in promoting better mental health practices and contributing to a healthier society.

Early Identification and Support
Increasing awareness and promoting early identification are crucial steps toward managing risk and creating a healthier society. By advocating for better mental health support, insurers can play a significant role in ensuring individuals receive the care they need and reducing potential risks.

By adapting strategies and gaining a deeper understanding of these conditions, insurers and financial advisers can navigate this new landscape more effectively. Promoting early identification, advocating for better mental health support, and adopting a holistic approach will not only lead to better risk management but also contribute to a healthier and more productive society.

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