Cape Town, December 10, 2020 … Mental health conditions are one of the leading causes of disability in the South African market. More than a quarter of both income and lump sum Disability claims received in the past five years included mental and behavioural conditions.*
It’s an issue that has come sharply into view this year, amplified by COVID‑19. Yet people living with mental health conditions are currently either completely excluded from cover or offered very restricted and/or expensive terms at application, with little or no opportunity for review.
The global insurance market has been aware of this issue, but as with other difficult-to-assess-and-manage conditions in the market, the trend has been to mitigate the risk associated with the disease, rather than cover and manage it. This has left the industry seemingly out-of-step with consumer sentiment and the call for broader de-stigmatisation and support for the condition in all aspects of life, not just insurance.
Gen Re, a global reinsurer operating in South Africa as General Reinsurance Africa Ltd., has set out to provide clients with practical design solutions and tools to help rethink the risks in this space. Using principles similar to those used to develop cover for people living with HIV – cover created by Gen Re in the nineties – the result is a framework for a pioneering managed mental health product.
The product has foundations in behavioural economics research: through active engagement with the managed services offered in partnership with their insurer, customers can control and improve their health and so change the underwriting decisions over the lifetime of their policy.
The key paradigm shift is the departure from the pure biomedical approach, which offers little granularity in the assessment and management of the risk, to a biopsychosocial approach. A multifactor risk tool, developed by the Gen Re team, considers psychosocial factors, as well as selected questions from the self-efficacy scale, in the terms offered. This more holistic approach translates into improved underwriting decisions and better terms for people with less severe mental illness.
The continuous underwriting approach also provides the opportunity for automatic reviews and re-underwriting, with the ability to offer expanded cover for mental health conditions over time. The effect is that customers will obtain increased levels of cover or a reduction in extra mortality loadings – in the presence of stable and well-managed disease.
While not all mental health conditions and events can be fully covered, the product aims to also provide cover for other unrelated events for individuals living with the condition.
Access to support services and managed programmes for customers is integral to the design. Gen Re’s Thea Weyers, who led-the Cape Town team responsible for developing the product, commented:
“Research has shown that proactive and early intervention adopting the biopsychosocial approach across the mental health spectrum is a potential gamechanger. The focus is on keeping people well, intervening quickly when a change is triggered and working hard at the in-claim stage with structured rehabilitation, supported with tool sets, such as our Gen Re-developed Depression Tool. Initial feedback from our recent CONNECT client event has been overwhelmingly positive and we are excited about working together with our clients to meet the specific needs of their customers.”
Clients will also benefit from access to Gen Re’s growing network of health tech specialists operating in the mental health space, as they develop their own custom structures from this unique scaffold.
While the new design can be a stand-alone managed offering, Gen Re’s team in South Africa has identified features that can be implemented or tweaked within the existing client offerings in the market – in both the individual and group market spaces and at various points in the process.
*Claims received by Gen Re.
About Gen Re
Gen Re delivers reinsurance solutions to the Life/Health and Property/Casualty insurance industries. We work closely with our clients to understand their strategic and operational goals, offering a wide range of products, tools and resources that aim to promote our clients’ ongoing growth and success.
Gen Re is a member of the Berkshire Hathaway family of companies and has earned superior financial strength ratings from each of the major rating agencies. We take our commitments very seriously. With $14.8 billion in capital and $11 billion in premiums, we only make promises we can keep.