There is a supply and demand mismatch for mental health care in both the public and private sectors in Asia, but a common fear amongst underwriters of anti-selection, or high-risk individuals obtaining insurance coverage for conditions they are already at risk of, has not materialised, said Edward Moncreiffe, CEO of HSBC Life in Hong Kong at the Global Insurance Forum in Singapore.
Mental health and coverage for mental health conditions is a really problematic area for pricing actuaries and underwriters, as this type of care can be a non-linear journey and the severity of conditions can be so broad that it is difficult to model an expected claims rate or consumption rate.
“So what we’re trying to do, and what we’ve succeeded in trying to do at HSBC, is to kind of move the actuaries and underwriters out and go straight to the client,” Moncreiffe said on November 7 during a panel of health insurance executives during the Forum.
With HR directors becoming more progressive and recognising that mental health coverage is key to the value proposition of employers, HSBC has launched coverage in its group medical schemes for a few large multinationals, Moncreiffe added.
Even as they launched, however, there were widespread concerns of widespread anti-selection affecting the viability of products. Those concerns have, so far, not been realised, in part because “there’s still a cultural reluctance to really trigger and consume these services” within the region, Moncreiffe said.
In a survey by Reinsurance Group of America (RGA), 82% of global insurers that responded agreed that underwriting guidelines have also contributed to a conservative approach to mental health risk assessment. Insurers cited receiving appropriate disclosures from customers, obtaining sufficient information to paint a full picture of risk, and acquiring adequate medical evidence to make accurate assessments as some of the top underwriting challenges.
In the same survey, 57% of insurers surveyed reported additional demand for mental health related products and services in the two years following the start of the COVID-19 pandemic, with only 27% of them launching new products to meet this demand.
“Asia-Pacific probably lags a little bit behind in this area,” said RGA head of global accounts Duncan Lord, during a different panel on Monday.
“Maybe that’s partly because of less disability income products around this region,” he added. “There is potentially a greater stigma we have (in Asia) around mental health.”
Also, 48% of respondents to the RGA survey said that they planned to update their philosophies and practices within the next two years, and another 49% have updated their underwriting philosophies.
At the same time, “50% of the companies we talked to have mental health specialists on their staff involved in the value chain,” Lord added.
Underserved
Despite the opportunities it represents and the growing interest, mental health care remains a very underserved sector and a growing concern, said Rachel Edwards, global managing director for Verisk’s Life, Health, and Travel division.
Insurers have a part to play in providing early access to mental health services and facilitating early intervention before a severe escalation that might end up with a significant impact on life and health, Edwards added.
“Health insurance obviously has a part to play in the access of that service, particularly if it can facilitate that early intervention,” she said. “If someone is suffering from a severe mental health condition that could be avoided, they’re not working, they’re not earning an income, they’re not buying insurance, and there’s a lot of impact.”
Greater access through digital connectivity is also helpful, particularly in remote locations, like rural Australia, Edwards said. Virtual consultations are a case in point.
“It’s a good example where digitisation, enhanced access to healthcare can really help improve mental health outcomes to the benefit of so many different people,” she added.
Regulators also have a very keen interest in how mental health is being treated by the insurance sector, Edwards said. “So if there is a mechanism through which access to and support of mental health conditions within insurance can be provided, I think that’s going to be a positive step forward.”
