Underwriting mental health

Cover magazine – 25th January 2018

Following The Guardian’s article detailing instances of people with a history of mental illness being refused life insurance, Andrew Wibberley, director of Alea Risk, looks into the ways underwriters can overcome challenges that underwriters face.

I’ve been involved with the underwriting of mental health cases for over 15 years.

In this time I’ve underwritten cases day to day, programmed computer rules to assess people with mental health issues and developed guidelines with a reinsurer that many insurers apply to their customers today.

First – a clear and absolute statement of fact – there is no difference in any of these processes for mental health to those for physical health.

Whether or not there is exactly the same legal protection is irrelevant in the realities of insurance offices today.

The process by which decisions are made and guidelines are written is consistent for every medical condition whether physical or mental health (or as so often a combination of the two).

Data and context

In all cases guidelines are developed by medical officers and underwriters based on large analysis of global medical data and insurance claims.

These are considered in the context of and applied to the insurance population.

Ultimately what is clear from all available data is that on average if you have a history of poor mental health you are more likely to have poor physical health in the future.

Equally if you have poor mental health you are more likely to commit suicide.

Clearly the extent to which these statements are true for each individual applying is the really critical part of the evaluation.

How much more likely are you to suffer poor future health if you had post natal depression three years ago / PTSD seven years ago / a suicide attempt four years ago are all where the real challenges lie.

Less consistent approach

I believe in applying a consistent approach to physical and mental health issues we risk not applying the best approach for those who have a history of mental health problems.

People can struggle to relate to the questions asked on an insurance application.

The precise symptoms, causes, effects and circumstances can all create many genuinely individual situations.

These individual stories can be shoved into the decision making machine.

At times the requirement to Treat Customers Fairly was translated to mean we should treat people consistently.

Treating people fairly

While this sounds sensible there may be very different realities between two people who both had one suicide attempt five years ago.

Do we dig deep enough to find out why?

Do we know enough to distinguish the different prognosis between the attempt related to a relationship breakdown and that linked to bipolar disorder?

As we applaud those with mental health issues who speak honestly so we should be honest enough to admit that both the medical profession and the insurance profession at times struggle to separate these individuals out in a fair way.

The risk is that these conversations become adversarial and prompt insurers to pretend everything is perfect rather than be open and admit they are doing their best, but if someone has a new insight then it would be great to consider it.

Insurance ratings are generally based on global research conducted by reinsurers.

Mental health in particular varies significantly by region and country in terms of categorisation, of diagnosis and of treatment.

The changes over time in the UK are also significant and rapid compare to many other illnesses.

It is difficult but not impossible for insurers to consider the future trends of an individual country rather than the past trends of the world for a condition – it seems to me this needs to be done here.

Positive steps

The UK could be a special case for mental health issues at present both in some of the hugely positive steps in terms of talking about mental health issues but also in recognising some of the truly dreadful statistics in terms of suicide as a major cause of death in the UK.

I do therefore think that it’s appropriate for UK insurers to evaluate whether the current processes truly result in fair terms for all their customers.

My personal reflection on work I have done both on individual applications or when setting guidelines for others to apply is that there is a larger grey area for mental health than other conditions.

Used correctly this may allow appropriate individual assessment of risks.

In a sales environment where there is a perceived need for swift assessment of risk based on customer disclosure rather than independent medical advice there can be a reverse into a black and white approach.

Typically this will be a safety first / worst case scenario decision when by taking time to listen to the customer or their doctor something more beneficial could have been achieved.

I think it is important that all involved in the process remember that these are individual cases and consider them as such.

While there is not deliberate or institutionalised bias against those with mental health issues in the UK I do think there is real room for improvement.

We should use this moment to reflect and engage with those interested in what is done here as has been done successfully with other charities in the past to consider the risk assessment and just as importantly improve the experience to get to that point.

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