The very nature of mental health risks, i.e., the complexity of underlying causes, the problems of correct diagnosis and the difficulties in risk-assessment, pose a huge challenge for the insurance industry. Pricing and underwriting as well as claims handling do often not follow clear guidelines as consistent data are missing and quantifiable links between certain lifestyles and mental health are non-existent. Furthermore, the personal mental health history is often not disclosed for fears of discrimination. The consequence: The whole customer journey involves a (high) level of personal judgement and the industry may more often than not reject customers with low risk levels or accept customers with a higher risk than expected. In
Australia, for example, this situation forced the regulator to intervene as rising mental health claims (in particular in disability insurance), coupled with comprehensive and liberal policy conditions, started to threaten the very viability of the insurance product.
Shifting to a more data-driven process could help – but it is easier said than done. Clear guidelines how to interact with clients and full transparency about the coverage — the in- or exclusion of certain mental health conditions — would be a good start. For some conditions (e.g., schizophrenia), dedicated rating scales already exist; such quantitative benchmarks should be further developed and become more widespread. The same applies for treatment: More standardization is needed: for example, the adoption of the Standard for Clinicians’ Interview in Psychiatry (SCIP) could help eliminate biased decisions. Private insurers can use their levers to push for these improvements. But it goes without saying that such initiatives are best conducted in close cooperation with the regulators (who define the standards in the first place).
In addition to improving the diagnosis and treatment of mental health, the monetary aspect is just as big a challenge. According to WHO figures , countries currently spend only slightly more than 2% of their health care expenditure on mental health; even in rich countries, this share is only slightly higher at 3.8%. Against the backdrop of rising prevalence and the increasing number of countries that assume mental health treatment costs in their public health systems – France and India have recently taken steps in this direction – related expenditures are bound to increase (significantly) in the future.
Prevention will therefore become ever more important: As with other diseases, the earlier symptoms of mental health conditions are recognized and targeted treatment is initiated, the lower the costs – and the less suffering for the patients. Primary health care plays a special role here, i.e. the extent to which mental health is integrated into general health care (for example by family doctors). And here there is still a lot of catching up to do. While more than half of the WHO countries now cover mental health treatment by specialists in their public health systems, only about a quarter have integrated mental health satisfactorily into general health care, for example through appropriate training of non-specialists or in the form of the possibility of pharmacological interventions at the primary care level.
Further efforts are needed to close this gap — not least on the part of private insurers. The design of insurance solutions — be it affordable and broad coverage or mental health add-ons — can help, as can appropriate training to increase awareness, including among the insurers' own employees. Another field is the use of tech- or digital-based solutions enabling self-help. The idea of insurers using apps and incentives to encourage their customers to adopt healthier lifestyles can also be applied to mental health: Mental resilience can be trained and offers insurers a further opportunity to deepen customer relationships. Within the framework of clear policies for dealing with mental health and in close cooperation with the public sector, insurers can play their part in helping society to weather the mental health crisis.