Mental Health – A Challenge for Insurers

August 27, 2015| By Ross Campbell | Life | English

The economic consequences of mental health problems are enormous. Estimates suggest more than 80% of U.S. adults have below optimal mental health.1  The UK spends around 4% of its GDP (a little over £100 billion) on prevention, diagnosis and treatment each year.2  The value of lost output and less tangible indirect costs of diminished quality of life are no less significant.

The global burden of mental health problems and their complexity has tremendous impact on the life and health insurance industry. By 2020 disability from depression will trail only cardiovascular disease.3

Despite the alarming figures, the evidence for a wholesale epidemic of mental health problems isn’t that strong. In Britain, for example, the rates of self-reported illness increased by just 2.5% from 1992 to 2007.4

Over 80% of people with the most common mental health problems of mixed anxiety and depression seek no treatment. Many receive minimally adequate treatment and rare specialist interventions from mental health services.

Nearly two out of five people in the UK miss work due to anxiety and depression, outstripping musculoskeletal problems as a cause for sickness absence. Little wonder British insurers report a significant increase in associated disability claims.

This shows that the effects of mental health problems experienced by the insured population are not necessarily the same as those of the whole country.

The contrast is most apparent when attempting to understand the impact the 2008 financial crisis has had on mental health, especially levels of suicide.

It’s hard to generalize because the trends vary in different countries. However, it is rare for suicide rates to have returned to the highs seen at the turn of the millennium.

Compared to the general population, there is evidence of higher rates of claim due to suicide, predominantly in older people with no history of mental health problems and especially on policies with large face amounts.

But public perception of mental illness is changing.

Follow our blog series on mental health for future posts on the complex risk challenges it presents. We’ll be looking at specific disorders and behavioural issues, suicide and the impact of recreational and prescription drug addiction. 

  1. U.S. Department of Health and Human Services. Mental Health: A Report of the Surgeon General. Rockville, MD: U.S. Department of Health and Human Services; Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, National Institutes of Health, National Institute of Mental Health, 1999.
  2. Centre for Mental Health. Economic and social costs of mental health problems in 2009/10. London; 2010.
  3. Murray CJL, Lopez AD. The Global Burden of Disease: A Comprehensive Assessment of Mortality and Disability from Diseases, Injuries and Risk Factors in 1990 and Projected to 2020. Geneva, Switzerland;World Health Organization, 1996.
  4. Adult Psychiatric Morbidity Study in England: A household Study (2009).


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