Insurance and mental health

10 min read
3 December, 2021

Our research tells us that mental ill health is affecting many of us in New Zealand. In light of the impacts of the pandemic, conversations about mental health and wellbeing have never been more important.  

Clarissa chatted to the Acting CEO of AIA New Zealand, Sharron Botica, about her views on mental health and insurance, and how the industry is embracing a more holistic view of health and wellbeing. 

Watch the interview or read the transcript below:

Sharron, this must be an incredibly busy time for you. So thank you so much for taking the time out of your day to talk to me about this really important topic. 

Kia ora and tēnā koutou katoa. It is double hitting at the moment! So really privileged to be stepping into the Acting CEO role whilst our wonderful CEO Nick [Stanhope] is having a well-deserved break on his long service leave. So it's a real privilege to be here today and to be representing AIA. 

Well welcome, Sharron. And I'm curious to know how have you been faring over the last couple of years or so? Because it's been a pretty challenging time for everybody.  

Myself, personally, I would say it's been mixed and it depends. So it depends what's going on. And in some periods I'd say I've thrived and in other periods I've really struggled. I felt very privileged this year actually to be able to get across to Australia and reconnect with much of my family who are across in Australia for my niece's wedding, I had a baptism and I had a big birthday. So that kind of really filled me up again.  

And then other periods last year when my uncle actually passed away who's based in Sydney, and we couldn't bring him back for his tangi [funeral] as well. So that was pretty difficult. And then it has been at times how to how to best lead myself personally, and lead the team here at AIA because in my home role, which is Chief Customer Officer, I lead around half of the employee base of AIA, so always conscious of being authentic, and being honest around, you know, when times are tough as well, and how to support our team.  

You'll notice that I am in the office here in Smales Farm in Takapuna and some of the things that we have done is actually bring people back in who have personally been having some struggles at home, as well as mental health. So this is such an important conversation for us to be talking about today. 

Thanks for that introduction. I'm really sorry to hear about some of the struggles you've been going through. And, as someone originally from Sydney, and have a lot of family back there, I definitely relate to some of what you're going through. So that's really fantastic. You've been able to get back there. 

So lucky! I got in the gap! 

So how would you say that Kiwis in general are faring at the moment? You know, we know that, you know, a lot of people have been struggling, all in different and unique ways. And I'm just wondering if you and your team have noticed any sort of increase in  the number of claims that are coming through that focus on mental health conditions, or even the types of questions that have been coming through from your customers? 

So we all know that it's been such a tough couple of years for everyone and how we've had to navigate and adjust. And, you know, the pandemic and COVID from a health impact, the impact that it can have. But the piece that wasn't originally spoken about, and now it's being more openly spoken about, is the impact on mental ill health that that is having globally. And we're seeing that coming through in New Zealanders as well. 

So the long periods of lockdown, and the rise of anxiety in particular. And this is coming through at very young ages. So here in Auckland, you know, our children who have been in a lockdown, you know, for 100 days, are now going back to school. It's exciting for some of them, but for many children as well it is very difficult and there's anxiety about you know, leaving that home bubble, losing their parents after being so connected for so long, and going back to that school environment. So yeah, what we're seeing is it is taking a toll. We're concerned about that rise of anxiety and what that may do over time.  

And from us from a claims perspective ... it has been mixed. So we do at times from disability income see that our lead cause of disability has been mental health. And then other times it's been around musculoskeletal. So it has been mixed, what we are seeing though underlying in our disability income claims are factors around the COVID lockdown in particular...

I may start the claim off being around musculoskeletal conditions - maybe something related to my back. But then if I don't have access to good care, and some of that is on Zoom and has been done wonderfully, but not being able to have access to all of the necessary care that they would normally have, particularly when there's delays to get into certain practitioners. That is having an impact on our claimants as well.  

So we continue to manage that and see how we can flex. What are the things that we can put into our rehabilitation programs? How can we bring through new programs to support as well? So Mentemia is something that we have embraced for our staff, and also access through our AIA Vitality program as well. 

Now, I also know that you've recently made some changes to your underwriting* approach to mental ill health disclosures for income protection cover. And I read that you were trying to encourage people to share a bit more of their stories when it came to their mental health. I'm just wondering if you could talk a bit more about that, and where you think the insurance industry is sort of heading when it comes to this more holistic view of health and wellbeing? 

*underwriting is the process that your insurance provider goes through when weighing up the risk of insuring you. This then determines the premiums you pay for your insurance cover.  

Yeah, so what one of the really, really important things is that we are inclusive as an industry. We're pretty proud this year of the fact that we are seeing the impact of mental ill health coming through so strongly, that we were able to really look at how can we improve underwriting insofar as mental health as well. So we're quite fortunate that from a digital perspective, we have had our e-application in play for over 12 years now...

And so we were able to mine that data to see, from the disclosures that customers were telling us, how did that actually translate to a claims perspective as well? And so we wanted to take that information and better use our digital tools to be more inclusive around mental health. We know mental health issues, they're not black and white, and each experience is quite different. And, you know, we do encourage the insurance market to take a more flexible and inclusive approach. And that's what we've been looking to do, and seeking to lead the way in that regard.  

So what we do is we ask our customers to tell the story around if they are disclosing some issues in the past around mental health, what was causing that? What were the factors that were associated with that? And some of those can actually be a point in time. So could relate to a specific event and then the customer has recovered off the back of that as well. So we take that into consideration when we're looking at our underwriting practices, and we've actually been able to automate some of those. So some of those in time pieces, we can understand them, and then we can accept those for cover through our e-app system. Others there are times that, yes, some mental health conditions we need to continually refer them out, and then understand more deeply what has happened from a mental health consideration. 

In insurance, you talk about pre-existing conditions. So as a consumer if I have been diagnosed with a mental health condition and then I went to take out a health insurance policy, how would that impact on how my application was considered? 

So AIA's health insurance product, it does exclude treatment for mental health issues as a general policy exclusion, as do most health insurers. So mental health disclosures in the application form do not typically impact on the underwriting of health insurance, and the health insurance industry has always had to make choices between the balance between keeping the premiums affordable, and providing comprehensive cover.  

Health insurance has primarily been about getting acute treatment for a health issue where there might be long delays in the public sector. So maintenance of health e.g. you know, your routine screening or counselling services are only now being looked at as part of a move towards a more holistic approach.  

But as noted, we do need to balance between cost and cover. For other forms of insurance, it is important that we understand your mental health history, and hence some of the changes that we've been making to make that more inclusive to tell your own story.  

It is a pre-existing health condition that we need to understand. But we put significant effort into how we ask about mental health and how we use that information to ensure that it's being fair to all applicants, and to all other policyholders, as well.  

If someone has been diagnosed with a terminal illness and then as a consequence of that developed a mental health condition, how would that work in terms of their insurance policy? Would the policy cover that side of things if they required treatment or were unable to work, for example? 

So it will depend on the type of contract that the policyholder does hold. So if it is an income protection, disability and income type contract, then the mental health piece would actually be treatable through that claims process. So naturally, we would need to assess that.

But if that has, as you mentioned, yeah, it was a follow on from something that had most recently occurred, then, you know, we will go through a process to actually assess. So as long as it  wasn't a pre-existing condition or something that hadn't been disclosed, then yeah, absolutely. That is something that we look at.  

And, as I mentioned before, you know, at times when a claim may start as a certain condition or a certain event, and then mental health impacts can actually come in post that as well. And we treat the whole piece through that as well. So really proud of our case managers that we have here at AIA, but really proud across the industry actually, in how we do approach this and we treat all of the conditions that the customer has to help them and if it is a serious condition or you know, a terminal condition as well.

What I see both here at AIA and across the industry is that we go over and above to support that customer and many times we also support their whānau. 

Where are things heading in terms of the insurance industry as a whole and the approach to mental health?  

I think as an industry we are becoming a lot more inclusive to the impacts of mental ill health. We seek a lot of expertise, so from reinsurance from that global perspective, what are they seeing that sometimes may start overseas and then we tend to see it flow down more locally to New Zealand.  

At AIA, we are really, I believe, leading the industry around mental health and what we can do in this particular space. We, through our AIA Vitality program, there are so many things included in that program that help people to stay well from a physical and a mental perspective.  

We've also, you know, had the real privilege to host many companies from across the New Zealand industry in a Claims Industry Forum. So that's where most of the industry have come together with us and we've been talking about what are we seeing from a COVID perspective? What are those impacts around mental health? What are we seeing around access to providers? And what can we do collectively, to help to solve for some of that as well?  

So it's not about a competitive edge when it comes to the rehabilitation of New Zealanders, it's about a collective effort as well. And it gives me pride when I see us come together in those types of forums to have these open conversations as well. And really stare into the challenges, particularly around the increasing poor mental ill health as well.  

We are seeing from a claims experience, and I think there's some statistics released earlier this year, talking about how there has been seen a decline in suicide rates. You know, yes, there's a decline, it's still a major issue. And that decline in my books, it's not significant. So we want to avert, you know, the impact of sudden death suicides into the future, by making sure that for us at AIA and collectively as an industry, we're doing all that we can to understand this to support our customers and to support the broader New Zealand community. 

Sharron, thank you so much for your time today. This is such an important topic and it's really encouraging to see there are strides being made in the industry to embrace this more holistic approach to health and wellbeing. Like you mentioned, there's obviously a lot more work to be done, but it's really encouraging and positive to see that change is happening. So thank you again, for joining me today. 

It's my pleasure. My absolute pleasure. 

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3 December 2021.   




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