COVID-19 Forces Insurers to Rethink Approaches to Mental Health

For example, consumers have been reluctant to share personal information about their condition with insurance companies out of shame or fear of being rejected. In acknowledgement of this, insurers are refining how they collect responses from applicants. In this situation, completing an online form may be preferable to speaking with an agent or communicating with a chatbot.

Insurers are also framing sensitive questions differently by stating upfront that a symptom or behavior is common. Both can go a long way to ease the anxiety associated with getting insurance.

Insurers as a Wellness Partner

Life and health insurers have an inconsistent record of underwriting people with mental health issues. Accordingly, we are designing products to accommodate those customers and improve their experience. That coverage may come at a higher price, which can be a challenge given the financial strain many already face, exacerbated further by the current recession.

This underscores the need for insurers to provide customers with the materials and resources they need to better manage their condition. Historically, as an industry, we’ve focused primarily on bringing support to individuals at the claims/pre-claims stage. However, now, there is also a focus on seeing where and how we can offer support to policyholders when they’re well and first go on risk – which is where there is potential in the digital support space. There are currently 1,435 mental health apps in existence, proof that early and tailored intervention is no longer just a trend – it’s a movement.

We all want an outcome where coverage and conditions are aligned, and customers feel that their insurer understands and supports them in their journey to wellness. Our industry must act with determination to help shift the focus to more positive interactions with consumers, and, where possible, champion early intervention before symptoms become chronic. This approach will not only benefit consumers by minimizing risks associated with mental health, but it also benefits insurers with more policyholders who enjoy improved health, wellbeing, and a less costly claims experience.

The Protection Gap Benchmark

We often refer to the protection gap, which is the difference between how much life insurance people have and how much they actually need in order to leave their family with a solid financial foundation when they die.

The U.S. protection gap stands at $25 trillion, and the outlook for this year is potentially worse. Mortality resilience will likely deteriorate further as deaths rise from COVID-19, while household assets suffer in the recession.

The protection gap is a critical benchmark, and Swiss Re is passionate about closing it. Investing in extensive research in the field of mental health will better enable us to help insurers make more accurate and fair risk assessments. This, in turn, could help our industry extend coverage to people who may otherwise not be able to get insurance.

The pandemic took us out of our comfort zone, and however unsettling that may feel, I believe that many positive outcomes will emerge from this unprecedented period. At the top of our list is a renewed commitment to a greater understanding of mental health and investing in products and services to meet the needs of a population in crisis.

— Read Jill McGruder to Lead LIMRA and LOMA’s Parent in 2020, on ThinkAdvisor.

Neil Sprackling is president of Swiss Re’s Life & Health U.S. business and a member of the firm’s Americas management team. He’s a member of the board of directors of the American Council of Life Insurers, and a member of the ACLI’s CEO committees on prudential regulation and taxation. He’s also a member of the board of LIMRA/LOMA.