The Financial Services Council (FSC) has highlighted new life insurance data on mental health as part of a four-year, industry funded data project at its annual Life Insurance Conference in Sydney yesterday.
FSC CEO Sally Loane said during her opening address at the conference, “While sometimes hard to address, it is however very important to note that mental health conditions rank third in the top 10 causes of claim across all life insurance categories.”
She said, “Under life insurance disability claims, mental health accounts for 20%, which is second only to accidents.
“Population studies show, 22% of all disabilities in Australians result from a mental health condition, similarly, FSC figures show 20% of all disability claims are due to a mental health condition.
“In this initial analysis, it shows overall Australian insurers are paying out mental health claims at the same rate as they are occurring in our community—in other words, they are not lagging.”
She also said, “Preliminary findings of the data show in 2017-18, there were more than 102,000 claims on death, trauma, total and permanent disability, income protection, consumer credit insurance, funeral and accident with 92% of those claims paid in the first instance.”
Australian Prudential Regulation Authority data show that A$10bn ($7.1bn) is paid out across all categories of claims annually.
Ms Loane said, “Up until now, the life insurance sector has had no industry approach to the collection of aggregate industry data, which has been a major challenge and constant frustration.”
The study gives the life insurance industry a tool to better articulate the type and number of claims paid and enables the industry to understand patterns as they emerge, she added.
More details
In the future, the FSC hopes to be able to break information down by gender, age and geographical location. The multi-million project is being collected by KMPG on behalf of the FSC with data collected from 19 FSC life insurance members contributing, with a further three providing financial support and four members participating for the first time. Life insurance categories include death, trauma, Total & Permanent Disability or TPD, Insurance Protection or IP, CCI, funeral and accident.
The FSC has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies.