Understanding Depression for Fairer Risk Assessment
The release of the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), a manual edited by the American Psychiatric Association, led to an outcry from many experts who felt the diagnostic tool labelled everyday problems as mental health disorders.1 The changes present particular challenges in assessing risk in “depression” - a word that is used and understood in different ways by the public, the press and professionals, thus making it important for insurers to have a consistent approach.
Regardless of how it is classified, major or severe, depression involves low mood, lack of enjoyment, negative thinking and reduced energy that decrease social and occupational functioning. These symptoms are accompanied by early morning waking, changes in appetite and, for some individuals, delusions and hallucinations.
People suffering from mild depression have similar symptoms at a much lower intensity. Their mood is more reactive, and while they can experience some pleasure and still have an appetite, their sleep is fragmented. It is important to note that mild depression doesn’t significantly interrupt social and occupational function.
Meanwhile minor mood disorders, often seen only in primary care, are more of a mixed bag; people may present with anxiety, tiredness, irritability and some physical concerns. Minor depression of mood is often the result of specific life challenges with, for example, relationships, work or housing problems. Typically, complete resolution of mood occurs when a solution to the problem is found.
Bringing any of these mental states to the attention of a doctor, and thereby prompting its inclusion in health records, largely depends on the person labelling themselves as “ill” and the doctor confirming that label.
Although these contrasting presentations represent different mortality and morbidity risks, each may be labelled as “depression” and thereby attract a similar response from underwriters.
Suicide remains the most significant cause of excess mortality in severe depression (read our recent blog on suicide in Australia). Levels remain high despite significant reductions in many parts of the world since the beginning of the century – the U.S. a notable exception – that have been only partially reversed by the economic downturn.2 Individuals admitted to hospital following an episode of self-harm, especially where violent methods are used, are at greatest risk.3 For many years, outcomes from this cohort type were the only ones reported, leading insurers to impose high additional premiums whenever a diagnosis of depression was made.
During the early 2000s, significant degrees of significant degrees of granularity were added to this perception, with a hierarchy, from those at highest risk to those whose “depression” was a response to specific circumstances, meaning that the risk to suicide is no greater than the population at large.4
Relatively little information exists for suicide in insured populations, but there remains a perception by insurers that a death claim by suicide in some way represents a failure of underwriting. A recent study of claims found 90% of suicides gave no indication of risk at underwriting while the policies of those with mental health problems potentially carry an unwarranted burden of risk.5
Suicide exclusions remain a controversial topic. The typical period is 12-13 months in Australia, 24 months in the U.S., and typically 12 months in the UK. These exclusions protect insurers for up to two years against people taking out a policy only to commit suicide in a bid to improve the financial position of their family or business. However, claims assessment remains challenging as coroners are often reluctant to cite suicide as the cause of death.
Significant spikes in suicide claims coming soon after policy exclusions expire can prompt discussion about the need for permanent exclusions for suicide. However, it is not clear why a policyholder - who later develops a new severe depressive episode that leads to suicide - should be treated differently at claim from one who goes on to develop a new fatal cancer or suffer a sudden heart attack.
We can mitigate the need for draconian ratings and exclusions by having a clear strategy for underwriting individual risk and rating appropriately. When we provide the information gathering tools to assess severity, impact on functioning, treatment, co-morbidities that inform robust risk stratification, it is not only good for the business but also for the growing numbers of people who may attract a label of “depression” but whose mortality risks are nevertheless in line with the general population.
Follow our blog series on mental health for more on the complex risk challenges presented by specific disorders and behavioural issues.
- BMJ 2013;346:f3256 doi: 10.1136/bmj.f3256 (published 22 May 2013).
- BMJ 2013;347:f5239 doi: 10.1136/bmj.f5239 (published 17 September 2013).
- J Clin Psychiatry dx.doi.org/10.4088/JCP.14m09453.
- Ball, CJ (2008) “Depression and Suicide Risk,” Risk Insights, Gen Re.