We bring you this special Inbetweenysode, the recording of Hannover Re’s UK Life Branch webinar entitled, Mental Health in Protection Insurance.
To mark Mental Health Awareness Week in May, Hannover Re hosted this webinar to explore touch-points between mental health and protection insurance.
Guests Paul Farmer CBE (Chief Executive of mental health charity Mind) and Kathryn Knowles (financial adviser and Managing Director at Cura Financial Services) joined Hannover Re colleagues Tim Smith (Head of Protection), Lisa Balboa (Business Development Actuary and deputy chair of the IFoA’s Mental Health Working Party), and Kate Baldry (Underwriting Research & Systems Developer and member of the ABI’s Mental Health Working Group).
Tim Smith (00:03):
Welcome everybody. And thank you for joining us today. So it’s mental health awareness week here in the UK. And we wanted to mark this by hosting a webinar to unpick the life insurance industry’s approach when it comes to mental health. In the last 10 years, the topic of mental health has risen up the agenda in many industries with the impact of mental health conditions on individuals and on society being discussed, I think much more widely than it ever has been in the past. It’s likely that around one in six of us will have experienced some symptoms of a mental health condition in just the last week and the vast majority of people will experience symptoms at some point during their lives. Where there may be many new pressures in life that put individuals mental health at risk.
Tim Smith (00:56):
And as we’ll discuss later, I think definitely the, the pandemic has had a very significant impact here. There’s no doubt that mental health conditions have always been prevalent but significantly under reported in the past. So the, I think the increase in openness and the improvement in attitudes towards mental health is a huge step forward. But there’s certainly more that we could be doing in this area to improve outcomes for those suffering with mental health conditions. In the life insurance industry and the protection industry mental health is often discussed in the context of underwriting where it was one of the most common, if not the most common disclosures that we tend to see. There’s also debate about how best to support policy holders who are suffering from mental health conditions. And insurers are sort of increasingly looking to offer support services here and tragically the other place that we tend to see the impact of mental ill health in our industry is with the handling of related claims.
Tim Smith (02:02):
The industry has done a lot in recent years, I think to improve its position on mental health, our approach to underwriting has improved offering wider and cheaper coverage to those with most mental health conditions. As mentioned, there are also support services available for policy holders, and there’s been a big focus on training as well with the Chartered Insurance Institute and the ABI in particular working with Right Steps to introduce free training to frontline staff on mental health issues. Individual companies have also taken a lead here in supporting mental health charities in recent years. As an example, we supported Mind and Samaritans in recent years particularly through the pandemic with various employee initiatives and our Stockholm branch actually sponsored a study, looking at how we can deal with the longer term impacts of the COVID pandemic. So today we intend to have a discussion on how the protection industry approaches the challenge of mental health to celebrate some of the improvements that have been made in recent years and also ask ourselves what more could be done to improve outcomes.
Tim Smith (03:13):
So we’ll be joined. We will have a panel discussion and we’d welcome your questions. These can be submitted through the Q and a function in zoom on the webinar and you can submit that those at any time through the session, and we’ll try to get to as many as we can during the panel session later first, however, I am pleased to welcome Paul Farmer, Chief Executive of mental health charity Mind, being mental health awareness week, it’s a busy one for him but he’s kindly agreed to give us an overview of the mental health landscape in the UK. So thank you, Paul,
Paul Farmer (03:54):
Indeed, Tim, and thanks for the thanks very much, indeed, Tim, and thanks for the introduction and welcome to mental health awareness week. It’s always a big week in the annual calendar for us in the world of mental health, but it does feel like it’s a really important week for all of us, for all kinds of different reasons as perhaps we start to emerge from the, the way we’ve been living during the pandemic. And also it gives us a chance to reflect and think about what we all need to do to look after our own mental health. This year Mind is celebrating our 75th anniversary and it gives us a chance to really look back on the work that we have done here in the UK. We were formed after the second world war, by the government of the day who was worried about the psychological state of the nation.
Paul Farmer (04:44):
I think probably we, that I think we now know why, why that’s such an important was such an important act to make in terms of introducing into society a national mental health organisation, our, our proper title is the National Association of Mental Health. For those of you colleagues who are joining from outside of the UK, we work very closely with a networker of NGOs across Europe and the states to work in particular, thinking about how we can promote the cause and issue of mental health more widely. And I suppose for us in our 75 years of activity, we, as Tim mentioned in his introduction have seen huge strides in progress when it comes to the way in which we, as a society think about mental health. It really wasn’t that long ago that people with serious mental health problems and to be honest, people with really relatively modest mental health problems were locked up in a long stay asylums, the phrases in our English language, like out of sight, out of mind and around the bend are absolutely derived from that time.
Paul Farmer (05:54):
When basically people with mental health problems were invisible to wider society. Now, thankfully things have changed and they’ve changed quite a lot. I think, especially over the last 10 years as there’s been a greater awakening, I think of awareness understanding and critically tackling the stigma that exists around mental health and mental illness. So what I want to do today, just in this fairly brief session is just to give you a little bit of a sense from where we sit about what the mental health landscape looks like in 2022, and to offer a few thoughts about some of the issues that I think we all need to pay some attention to going forward. And then finally, I’m just gonna touch on the role that the insurance industry can play. And I just want to say, first of all, a huge thank you to members of the insurance industry for their support of Mind and the mental health charities.
Paul Farmer (06:50):
Over the last few years, it really does feel very much like a partnership is beginning to emerge, which I think is gonna be really helpful for the future. So where are we now? Well as Tim said at any given time, one in six of us would experience a mental health problem. And the overall prevalence as we call it of mental health issues is that one in four of us in the population will experience a mental health problem at some point in our lifetime. Those figures broadly speaking are not changing that much except for young people. And we are extremely concerned about the current situation that young people and children and young people are facing when it comes to their mental health. During the last three years during the time of the pandemic, we know that the prevalence of young people’s mental health problems has gone from one in nine.
Paul Farmer (07:39):
So previously young people experienced fewer mental health problems to now are very worrying one in six. And that of course is a concern for all of us who have children or are concerned about young people, but it’s a, why presents a much wider issue for us as a society, as we know that from previous periods of national challenge, that they, you can quite often end up with a cohort effect or to put it another way, a lost generation, a generation of young people who are being affected by mental health problems, whose opportunities are therefore limited and without the right help and support those what can be a relatively short period of mental health issues, can become a long term issue for somebody’s career, their life, their relationships, and their future. So our first area of concern at the moment is that, the state of young people’s mental health.
Paul Farmer (08:38):
Why is that? Well, of course it’s part, at least in part due to the pandemic. And so if we kind of, kind of zone out a little bit more to think about the impact of the pandemic on all our mental health, it presents quite a mixed picture. First of all, for young people for, for people, generally we know that actually probably we’ve all had to really think about our mental health. Like we’ve never had to think about it before. It does sometimes feel like a little while ago now doesn’t it. But if it can take you back to those dark days of the first and second lockdowns in the UK, certainly where, where, where it was extremely challenging for our mental health. We were all worried about ourselves, our families, our partners, our loved ones, our colleagues, but we saw two really encouraging things happen.
Paul Farmer (09:27):
The first thing was that people really thought about their mental health. We know that our information, so our information service providing information and support on how to look after your mental health was never busier. We know that people sought and looked out for the right kind of help, things to do. And we also saw employers taking really positive action to look after the mental health and wellbeing of their people. I suppose on events like this, we became used didn’t we to seeing people’s cats and dogs and toddlers wandering on screen. And I suppose that’s part and parcel of us recognising that, you know, maybe it’s okay to share a little bit more of our, who we are as individuals, whether we’re leaders of organisations or not. The second thing that we also saw was that the balance in place between the way in which people, in which we’re, we’ve been able to manage our protective factors.
Paul Farmer (10:22):
In other words, those things that we know are good for our mental health and our risk and how we cope with those risk factors. So in the pandemic some, some of the protective factors, we were very worried that some people would lose their protective factors for older people’s ability to go out and about, and to be able to spend time with their children and grandchildren maybe all our ability to be able to go and do physical activity, but we saw on the whole that people thought quite a lot about their protective factors. And to me, the most important thing the government did was to allow us out for that one hour of exercise and physical activity, because that was important for both our physical and also our mental wellbeing. And the same thing we noticed amongst older people was that people replaced their protective character protective factors either that’s because their parents or their children and grandchildren were maybe paying them a bit more attention or maybe because their neighbours were popping around and checking to see how they were.
Paul Farmer (11:23):
So our worry about older people’s wellbeing actually has proved to be less of a concern than we thought than we had previously thought. Although there are issues coming up in the future. However, in terms of people’s risk factors, we know that there are very many communities who have been profoundly affected by the pandemic and, and the overall we know that the overall impact on people’s mental health has been really significant, very significant indeed. We know for example, that roughly one in six people have accessed health support for the first time, two thirds of people who have done that said they want to continue to access support. Post pandemic around 30% of adults have said their mental health has got much worse since March 2020, and more than one in four experienced mental distress for the first time during the pandemic.
Paul Farmer (12:13):
We now know the consequence of that, which is there is a waiting list of around about a million people waiting to access NHS mental health services in a very similar situation to those people waiting to access physical healthcare on the NHS. So that presents a real issue, I think, for all of us. And we also need to particularly think about those communities who have been profoundly affected most profoundly affected by the pandemic. That’s, I’m thinking particularly frontline workers, particularly frontline and NHS workers and care home workers, but also people from communities, particularly racialised communities, where you may well have lost more than one member of your community. I was in Blackburn a couple of months ago, somebody told me that they knew 150 people in their community who had lost their lives as a result of COVID and the mental health consequences of that are significant.
Paul Farmer (13:05):
So where do we go from here? Well, I think there’s a number of areas where we really need to collectively pay some attention. I mean, first of all, I think we, we need to think a lot about our own mental health. We’ve learnt a lot over the pandemic and probably a lot of us really understand now what it is, that’s good for our mental health, but as we return to the work of world of hybrid working business as usual and we come back into a, what, what might look like a pre pandemic world. How are we going to maintain and look after our mental health? So there’s one thing I’d really like everybody to do in the course of today’s session is just scribble down on a piece of paper next to you. The three things that you do to look after your own mental health.
Paul Farmer (13:49):
Secondly, we really need to ensure that mental health continues to be a significant government priority. Today is the Queen’s speech and we are anticipating the government will be publishing, will be announcing the publication of a new mental health led bill. And just a few weeks ago, the government also announced their intention to consult on it, which is a current live consultation on a 10 year mental health strategy. And I think this is, this is an incredibly important moment for us in the UK when it comes to thinking about what we really would need to see both from government, but also where are the role of, of the employers and the role of individuals in, in all of this. And for those of you who are outside the UK, it’s always worth checking what the current government position is in terms of thinking about what strategic approach is being taken to mental health and we’re certainly where, and I’m, we’re certainly aware that there are similar conversations going on in many countries at the moment.
Paul Farmer (14:46):
So those are two things that I think we need to pay particular attention to. And I want to now just turn to briefly talk about the role of employers and also the insurance industry. So as employers, I think there is a real opportunity to put mental health at the heart of the recovery from the pandemic there’s been we’ve learned an awful lot about the approaches and techniques that really help us sustain our mental health and the mental health at work commitment, which I’d encourage all employers to sign up it’s completely free to do so by the Mental Health at Work website is an opportunity for your organisation to think about how you support the mental health of your people. It’s a really important moment to do this. I think because we come out of this period with quite a lot of uncertainty and also quite a lot of worry.
Paul Farmer (15:34):
And that really takes me to thinking about the future. The future has got challenges ahead of it. We know that people have been profoundly affected by the impact of the war in Ukraine. We know that the cost of living crisis and the rise in inflation will create pressures on people’s mental health. And, and I do very much hope that as, as that evolves that you know, that the work that the insurance industry is able to do, and we’re going to hear a lot more about this in the panel shortly. We’ll give people with mental health problems, confidence that helping support is available to you when you really need it when it comes to the support from insurers. And I think finally, just to kind of wrap this up, the theme of this year’s mental health awareness week is loneliness.
Paul Farmer (16:22):
Now, loneliness is not a clinical mental health problem. It’s an issue. It’s a feeling it’s a, an emotion, it’s a state of mind that many of us will have experienced at some point in our lives. And the reason why it’s worth us just paying a bit of attention to that at, just at this moment in time is because we know that if we don’t pay attention to our own social connections, our own networks, that can be detrimental to our mental health. So in this mental health awareness week of all weeks, please do reach out to friends, to families, to colleagues, but people who you think might be particularly isolated at this time and just get in touch and have a conversation with them about how they are, because we’ve all had our journeys through the last couple of years. They’ve not all been the same. They’ve not all been straight lines. They’ve not all been identical, we’ve all experienced some tough times. I’m sure. And that’s almost certainly had an impact on our mental health. So, the opportunity now is to really put that front and centre of how we care, how we think about living our lives over in the future and also how we put front and that front and center of both employers schools and government policies. So thanks very much. I’m really looking forward to listening to the panel. Over to you Tim.
Tim Smith (17:39):
Thank you, Paul. Thank you very interesting. Some, some concerning things there, I think particularly about the impact that clearly the pandemic has had on young people’s mental health, but really good to hear some practical steps as well that we can take to improve the mental health of ourselves and of others. You mentioned a challenge to everybody to write down three things that they could do for their own mental health. I, I had a quick thing while you were speaking there. I think definitely walking for me or doing some sort of exercise in a day is really important. Making sure that I shut my work away at the end of the day and I’m not sort of always on is important and making time for things like family meals and stuff in the working week is also something that I do so definitely would reinforce.
Tim Smith (18:28):
Everybody should have a think about the three things that they should do in their life to improve things. So I’d now like to introduce our panel today. So we are joined by Kathryn Knowles, who is the managing director of Cura and a financial adviser in the protection industry, by Kate Baldry, who’s a research and development underwriter with me at Hannover Re and also a member of the ABI mental health working group and by Lisa Balboa business development actuary at Hannover Re and deputy chair of the, IFoA, the Institute and Faculty of Actuary’s mental health working party. But to begin with, I would like to turn to the pandemic. So as Paul mentioned, it’s had a huge impact on the mental health of individuals across the world. And particularly as we’ve heard on young people. So what do you think is the impact of the pandemic on mental health, from our industry’s perspective and what support has been given to consumers on from this perspective Kate, maybe we could start with you to kick things off.
Kate Baldry (19:45):
Thanks, Paul. And thanks Tim morning, everyone for the past decade, common mental health disclosures, like anxiety, stress, depression, regularly disclosed from customers. So around one in five direct consumer application forms and, and slightly fewer for IFA will have some sort of ongoing mental health condition. And that’s fairly well in line with UK statistics. And so same as physical health. Mental health is first assessed by the underwriting rules engines, and the majority of multi moderate conditions will receive standard rates. We were mindful that during the burden of the pandemic, that we may experience higher disclosures, of course, as people suffered in numerous ways, including missing, or indeed losing loved ones, financial uncertainty, stress of juggling it all, or on the flip side, being isolated and lonely, the office of national statistics monitored personal wellbeing ratings during the first lockdown and not unsurprisingly, half of adults reported their wellbeing was affected negatively.
Kate Baldry (20:53):
The feeling lonely was the fact that most strongly associated with reporting high anxiety, people who often were always felt lonely were almost five times more likely to report high anxiety than those who never felt lonely. As we entered the first lockdown of a global pandemic, this became a very busy period for underwriting, as we considered, whether any areas where philosophy we ought to change in view of events, which were unfolding. We had to bring a brand new coronavirus question, make exclusions income protection, and consider high risk physical health conditions. We did not make any changes to underwriting mental health conditions. We advised our clients to monitor what was coming through on application forms and claims, but looking back on the data in lockdown, we didn’t experience a significant increase in customers telling us about mental health conditions. That may seem surprising. However, as the mindset at the time showed many of those who experienced mental health problems over the pandemic already had a diagnosis and a diagnosis can take time. It isn’t just a case of feeling pressured and, and nipping to the GP. Isn’t that straightforward. And it’s certainly wasn’t in lockdown. It can take months to approach the GP. And finally, in, in high stress occupations, particularly NHS and frontline workers at the time we were, we supported by the insurance industry by being given exemptions around contact with COVID positive patients.
Tim Smith (22:18):
Thanks, Kate. Yeah, certainly been a busy couple of years, I think from an underwriting development point of view, reacting to the various challenges that this has thrown up. Kathryn, maybe I could turn to you now. So, from an adviser’s perspective what impact have you seen over the last couple of years when it comes to mental health?
Kathryn Knowles (22:36):
Hi everyone. Well, I think there’s been quite a few different changes that we have seen. There was very clearly at the beginning of the pandemic, there was an increased demand for things like life insurance, people were naturally suddenly very, very worried cause we were all faced with, with that concern that obviously a lot of people unfortunately were passing away due to COVID. And I think it was, it’s quite natural obviously to have felt that way. And what I think a lot of us need to bear in mind as well, is that with a lot of things like insurance, we take it out because there’s a worry of some sort, you know, if it’s car insurance, well, obviously yes, it’s a legal requirement, but it’s also worry that if you don’t have it, then you could get really told off it’s the same with things like life insurance and income protection, you are worried that something’s going to happen.
Kathryn Knowles (23:25):
So it then becomes the level of, well, what level is that worry at? Is it a kind of standard level of worry or has it started to develop into something a bit more? And we started to see obviously the beginning of the pandemic there’s people as say were wanting my life insurance, but also people are wanting really wanting things like unemployment cover and income protection. People got very worried at that time that something was going to happen. Cause a lot of people were seeing lots of things about redundancies and unfortunately it’s not within the protection space, but unemployment cover in a slightly different area suddenly kind of became unavailable and people again were starting to get worried because it was a case of, well, I’m, I’m worried I’m going to find a solution to help me, but that solution’s now gone.
Kathryn Knowles (24:11):
And I think people found that quite hard and it was really hard as well as an adviser to, to try and comfort people who maybe had at that moment in time lost that opportunity. And there was also a bit of a, an extra knock on effect model of this as well, especially for people who maybe could still go for the, sort of the income protection, the life insurance, the critical illness cover and kind of knock on effect that we had was that for people who maybe need some extra medical support for applications, which would involve maybe a report from a GP, potentially some reports from a specialist to confirm their health that became quite tricky to do because in that kind of situation, if an insurer says, look, we, we can potentially consider you for your, for this insurance, but we just need to have some confirmation about all this medical information that you’ve given.
Kathryn Knowles (25:02):
And it’s, it’s quite standard for them to do that with some medical conditions. And personally as an adviser, I really like it when it happens. I think a lot of advisers don’t, but I personally do on the basis that it means there’s no question about what we have and haven’t said, nothing’s going to be missed. You know, the GP is literally saying, and everybody’s very clear about the information that’s there. And the difficult that we had, it was very clear is that GP’s were absolutely run off their feet, that, that they often are, but even more so during the pandemic. So people were wanting insurances and, and in the, in the best of times, I would say a report from a GP could, could easily take about eight weeks, potentially longer. We, we personally, my company have had an experience of over 12 months for a GP report to come back.
Kathryn Knowles (25:47):
It became even harder to get those going. So again, we had this again, this knock on effects of people were worried, so they wanted to get the insurance, they then needed medical reports. And then it was kind of a guessing game as to how long before that medical report would come back and, and all that time, that person is potentially worried and it’s built, it can be building up. It might not do, but it can do. I think something that we always have from an adviser space and insurance space in general is people can be quite apprehensive about going for insurance if they have a mental health condition. And it’s really important to say that there’s no one right way to get insurance. If you do have a mental health condition, you can apply through what be like comparison sites and things like that, where you don’t need to speak to somebody, because some people can find it incredibly hard to talk about their mental health history and, and having that barrier of not needing to speak to someone can really help.
Kathryn Knowles (26:43):
The difficulty with that is that, you know, in a sense you might choose an insurer that way who might not necessarily be best suited to your disclosures. So, then you can potentially get knock backs and then that can again feed into a cycle of, of sort like negativity around the whole process. You know, you can potentially though also as well, speak to advisers and there were different types of advisers, but that’s a bit too much to go into probably in the session. I don’t want to take up too much time. But the, the key thing is to just say that if you are going for insurance and you do speak to an adviser, then really you shouldn’t be getting judgment at all upon your history. You know, we are here as professionals to do what we do and it’s something we do day in, day out.
Kathryn Knowles (27:24):
It’s, it’s very unlikely that you’re going to share something with us that we haven’t heard from somebody else. And that’s not to say that everyone with a mental health condition is the same. It’s just that we have experienced this a lot, but if you’ve had something like mild anxiety, depression, stress, bereavement, a lot of insurers are going to be able to accept your application without having to necessarily go for enhanced medical underwriter. You should get an answer quite quickly. The times that we maybe don’t see that is if there has been any very significant recent changes in medications and, and that’s more types of medications potentially dosages it can be it it’s where symptoms have maybe been stronger. So that’s where someone’s maybe needed to be have a little bit of a stay in hospital or somebody has taken some action against themselves that would be considered to be you know, a level of self-harm of some sort that would be where an insurer maybe just wants to know some more information to be able to give out the insurance terms. But you know, in, in the long run, what I would say is that people do often have negative experiences, but unfortunately, sometimes that can just be where someone has chosen to go. And it does take a lot of research to find it right, but I would really hope that people, if they have had difficulties before that, they’re not it’s not put them off forever because no matter what that insurance need is still there. And it’s just making sure that we get you to the right place.
Tim Smith (28:58):
Thanks, Kathryn. And picking up actually on one of the points you made there around this, the time it took to get medical evidence during the pandemic. And obviously we all understand that huge pressures on the health service so we can understand why that would come about, but in your experience, has that abated now, or is there still a significant sort of backlog in the system that means it’s still challenging?
Kathryn Knowles (29:20):
I think it depends. <Laugh> I don’t want to say too clearly. Yes or no. It just depend upon the situation. It depends upon the GP. Now, one thing that we’re trying to do as advisers and I know insurers are doing as well, is try to really promote the use of what’s known as an EGPR systems within doctor surgeries with an EGPR system, the it’s very, very intuitive. I won’t even pretend to understand it. I’m sure the people here have found more better understanding of it than me. But essentially it’s instead of a GP having to sit there and manually write it out, it’s a click of a button and it sends it over to the insurer. So instead of it taking weeks, it can be a couple of days, maybe a week or so for it to go back. And it can also then as well, really help to, to sort of remove some of the human error that we sometimes see in these reports.
Kathryn Knowles (30:08):
And it can be quite significant the size of the reports, but it, it makes it much more streamlined. So I’d say because we’re getting so much more involvement from that space. I would say it’s generally getting better. But we are still unfortunately with some surgeries and, and also as well as not just necessarily the fact that some of them are having to have someone manually write them out. There are obviously still some GP surgeries that are incredibly overrun at the moment. And it’s, it’s a really fine balance between encouraging a GP to complete the form and obviously as always being incredibly respectful of their main job role.
Tim Smith (30:45):
Yeah. Sure. Thank you. Okay. So, Lisa what have you seen from the industry in terms of the response to some of these challenges in the last couple of years?
Lisa Balboa (30:55):
Yeah. Thanks Tim. And I think it’s very interesting actually. I was going to pick up on that thread of worry experience by insurance customers during COVID that Kathryn and Kate were highlighting. And actually I wanted to focus in on one example here of payment premium holidays. So this is an area where I think the insurance industry collaborated together very well to put measures in place to really support customers during COVID 19. So as Kathryn was saying, we saw really high increase in demand for life and protection insurance during COVID. So really anyone with a life protection insurance policy, someone that already had one, they also hugely valued the coverage that that protection gave them during these really uncertain times, unprecedented, uncertain times for our, for our health. So for those customers with one of those policies, but who might have been struggling financially as a result of a pandemic, what we saw was many insurers offered payment premium holidays to those customers.
Lisa Balboa (31:51):
So that really gave those customers who needed that financial relief from paying insurance premiums, something that could support them. So they had this real need for protection. And what it meant was these customers could still keep that protection in place. They weren’t forced due to financial inability to afford cover at this really wide scale economic pressured time to lapse those policies. So that lessened the worry about the health, cause they could still have that financial cover in place to protect against these ill health events. And I think there is a lot of research linking financial health, physical health, and mental health together. So these payment premium holidays that insurers offered, they provided financial relief to those customers who needed it most. And that was really important to reduce stress and to protect the mental health of customers. It was something tangible that the industry put in place and it required across industry initiatives.
Lisa Balboa (32:41):
So, what some people might not realise then, but I’m sure many of, of the insurers on the call will know, is that reinsurers such as Hannover Re. We supported this initiative. So, it requires a lot of people collaborating right across, across the industry, the advisers, the customers sort of calling for this, the policy advocate, also the insurers and the re-insurers who take on that risk to all work together. So, I’m really pleased that Hannover Re was able to really play its part in easing those pressures on insurance customers during this time. And looking back what’s interesting is that uptake of this initiative turned out to be low. So think we saw significantly less than 1% of customers taking out those payment premium holidays on the individual protection insurance side, but that low take up rate that’s not an indication of failure. What it actually means is, you know, this is something that can be offered to those people that need it most. So it’s a small number of people, but the impact on those people that do need it, that’s really hugely important. So it’s a way that for those insurers, they can directly support those customers that are struggling most financially during the challenges of the pandemic. And it really did offer a valuable safety net and further peace of mind to customers during these uncertain times. So I think it’s really fantastic to see the collaboration of the industry to support that initiative over the past couple of years.
Tim Smith (33:59):
Yeah. Thank you. And now maybe looking back over a slightly longer period then, so as I mentioned, and as, as Paul mentioned as well, there’s been definitely improvement generally in the openness in society generally, I think about mental health conditions and in the insurance industry specifically I think there’s been some serious improvements in the last say 10 years or so in our approach to how we deal with individuals with mental health conditions. Kathryn, I know that you have some personal experience in this area. So wondering if you could share some insight into how you think things have changed in sort of recent past.
Kathryn Knowles (34:38):
Yeah. So things have definitely changed quite a bit. So I’m, I’m very open about this. So a little over, over 10 years ago, I went for my life insurance and critical illness cover and I was declined by all but two insurers, because of my mental health. Now at the time I had, I still have generalised anxiety disorder and a couple of years before I applied, I’d had two bouts of agoraphobia, which is a very not nice situation to be in. And I applied and I was saying two, all but two said, we can’t insure you. And also of those two, it was, I had to have my premiums increased and essentially with the other ones, it was just because I was in the industry. You know, some of them, you know, were, I think one had gone to application, the rest of them, I was just told to even put an application in kind of thing.
Kathryn Knowles (35:29):
But essentially being told that you can’t have insurance because of that is very clearly somebody at that time. I’m not saying necessarily now, but at that time it was very clearly, and I knew that insurers are turning around and saying, we think you are going to kill yourself at some point, because you’ve got a mental health condition and it’s something that I’ve been advocating about for quite a bit. And, and obviously there’s been lots and lots of work done in this space as well, but essentially it was a case of right. Okay. So I have panic attacks. I’ve just completed uni. I have a mortgage, I’ve got a job, not missed a day off work because, you know, because of it or anything like that. And you start there thinking really, you know, that’s what you think of me. And it was really, really hard and very emotional at the time.
Kathryn Knowles (36:15):
Massive, massive knock on effect for my mental health because I thought I was doing well. I wasn’t acrophobic anymore. I was doing stuff. I was going off on my own to places. And it was a real smack in the face to be honest, to be told that at the time. And it was awful. And what’s lovely is that we are now just over 10 years down the line and that’s not necessarily what somebody would experience now. I can’t speak for everybody. So if you do have a similar situation or back history to me, please don’t assume that you’d be in the exact same situation with me going for insurance. Now it’s all about the individual, my symptoms and different treatments at the time, but what’s lovely now is somebody has generalised anxiety disorder. Okay. So the, the assuming that, you know, the, the key things, I would ask somebody as an adviser and obviously I’m, I’m saying them now quite openly, because we are in this forum, it wouldn’t be said in this kind of tone or this directly, if I was speaking to somebody, cause it’s a very sensitive conversation that you have, but I’ll be going through key things, which would be, what condition do you have?
Kathryn Knowles (37:18):
When did it start? What are your medications, treatments, and then I’ll be going to, have you ever seen a psychiatrist? Have you ever stayed in a hospital? Have you ever had suicidal thoughts or self-harmed or attempted suicide? And I help a lot of people in this space who have yes and no to all of a range of those questions. And what’s brilliant is that for the majority of people there are options, it’s not just automatic nos. And we have seen a number of policies develop as well. So, you know, there is a specific insurer that we can use. They are, it’s very, very specific. The policy it’s only allowed to be used with four brokers in the UK. So it’s not something that somebody would just see if they apply to the insurer themselves or even through in a sense other brokers, it is very, very specific because of the potential exclusions that are on there and, and different bits of information that need to be discussed.
Kathryn Knowles (38:10):
But there is now for people who have had quite significant mental health symptoms quite recently that we can maybe get things like a life insurance policy that would have a permanent self-harm or suicide exclusion on there. And one of the main things that I, when I’m speaking to people is a lot of the time I’ll say, because with the loss of life insurances, they will pay out if somebody is able to successfully attempt suicide after the policy’s been in place for 12 months. And a lot of people don’t realise that. And what’s quite interesting is when you say to people, right, okay. Has anybody explained to you that there’s this initial 12 month suicide exclusion on these policies and because of your history, that’s why a lot of insurers at the moment are saying no, and you wouldn’t, you can’t imagine the amount of relief that somebody has that someone has explained to them that that’s why, because they just don’t even know that that, that they might even be covered in the future.
Kathryn Knowles (39:08):
They’re just, it is far to them. It should, you know, they kind of think, well, why would it ever be covered? So, when you explain it, it’s really, it really helps them to understand. I say there are certain policies that we can get potentially that long term exclusion on that. And not everybody will want that. So, I’m certainly not saying that everybody went down that road and it’s not always needed either a lot of the time it’s not needed. It’s, it’s very specialist cases. And I think is really important for people to, to be well. And also as well, you know, in terms of the questions now with some policies, we maybe have questions about, you know, the kind of activities that you are maybe doing. So, so some of the things that Paul was mentioning, what are you doing to kind of help your mental health?
Kathryn Knowles (39:48):
If, if you’re maybe doing some of these things, then maybe we can potentially look at your application really favourably. And we have some insurers who don’t ask about suicidal thoughts. Some of them do, that’s always a very contentious area and it’s, again, something that’s necessarily to go into in this webinar, but it’s that thing of, well, what is a suicidal thought? It’s not as easy to quantify some of the other things. But the positive thing is, is that we are seeing so many more developments we’re seeing, you know, some insurers are saying, right, if this, you know, if any of this happened within the last five years or the last 10 years, and if it’s over that timeframe, then that is a really positive thing. Especially since it’s with certain medical conditions, people often can have quite strong symptoms in teenage years until diagnoses happen.
Kathryn Knowles (40:34):
And until they have proper treatments. And then historically they’ve always been held to those actions that happened at a younger age. And we’re now starting to get to the point where insurers are saying, well, actually that was a good long time ago, and you’re not the person that you were then you’re not in the same situation. And we can be really respectful of the fact that your life is very different now. So I think it’s incredibly positive. There are still things that I would quite like to work on at times I’ll be honest. But overall there have been really significant improvements that I’ve, I’ve been personally very happy to see.
Tim Smith (41:10):
Great. Thanks. And thanks for sharing your sort of personal experiences. That’s it sort of really brings it home. I think Kate, obviously you’ve done a fair amount of work with the ABI in this area. Would you be able to give us a bit of a flavour of what works been done there?
Kate Baldry (41:26):
Yeah. So there’s been an ongoing industry-wide initiative across protection PMI and travel insurance. So the ABI, the Association of British Insurers, established a mental health working group in 2019 where we engaged with mental health charities and campaigners, and from this project, four ABI standards were created. First one was improve accessibility. Number two is asking appropriate questions in the application journey. Number three is to communicate decisions and cover with clarity and empathy. And the fourth one is transparency. So, all ABI members implemented these standards by the end of last year. And if you want to know any more about this, there’s some really good information on the ABI website, including some free mental health training with Right Steps. At Hannover we’ve supported clients with numerous changes over the years to their underwriting rules, outcomes for customers and communication, including better wording of application questions compared to 10 years ago, we are seeing more people receiving standard rates decisions, which is backed up by evidence-based research. We also work with medical professionals to provide evidence based guidelines to underwriters on how to underwrite physical and mental health conditions. Our underwriting manual ascent is, is grouped into 13 main mental health conditions. There’s been recent updates to bipolar disorder, schizophrenia and anxiety, and we’ve also got planned updates for PTSD, which is post-traumatic stress disorder and alcohol use disorder this year. And I do often say this to colleagues but mental health and underwriting could almost be a full-time job.
Tim Smith (43:16):
Great. Thank you. And Lisa, your work with the IFoA mental health working party perhaps you could give us some insight into what’s going on there.
Lisa Balboa (43:27):
Yeah, thanks Tim. So, as you mentioned, I’m deputy chair of the Institute and faculty of actuary’s mental health working parties. So this is a group that was set up a year and a half ago, and we’re really committed to championing a consideration of mental health in insurance and much like the ABI group that Kate was mentioning. It’s a really cross industry group. So it’s fantastic to have that cross industry representation as part of our working group. So, we have Kathryn as part of the group. So, she brings an adviser perspective. We also have actuaries from areas such as pricing, product and risk. And we also have other insurance professionals from underwriting, from policy backgrounds, and as well as that, where we do have a gaps in our membership, we also proactively seek input from other stakeholders. So medical professionals, claim professionals, mental health charities as well.
Lisa Balboa (44:12):
So it’s a really active group. And, and probably our, our biggest piece of activity to date is the work we did back in February, where we held a mental health and insurance week really exploring all those wide range of touch points between mental health and insurance. So that could be at the application stage. The underwriting stage as Kate was mentioning pricing of products, design of products, themselves claims and other support services. And Kathryn as well was a key supporter of that work. So I’m very happy to tell you more about it as part of the Q and A as well. If you’re interested, just drop some messages into the Q and A box. One bit I did also want to mention because it’s one that I’m heavily involved with at the moment is our data and modeling work stream. So this is looking at what data we could start to use to further improve, for example, product design, underwriting approaches in this space.
Lisa Balboa (45:01):
And as Kathryn was mentioning the EGPR so on the sort of data analysis side of things, we’re starting to see the wider use of population based electronic health data to feed into research. So these larger data sources could provide some further insights into morbidity and mortality risks across the wide range of mental health conditions. So I think there’s more than 200 different mental health conditions, all at differing levels of, of severity and treatment approaches. So really those large volumes provided by those electronic data sets, sort of pooling that very large data sets together. They can provide deeper insights, particularly into the lower frequency, but higher severity mental health conditions. So these are the ones that are typically most likely to be underwritten at present. So very valuable to use these bigger datasets, to get more nuanced insights there. But I think it’s also worth highlighting with this group that even for high quality medical records data.
Lisa Balboa (45:58):
So even those that capture the latest treatment and management approaches, the policies we write in life and protection, they’re long term policies. So people are taking out the policies for 25 years or more in some cases. So really the sorts of longitudinal population studies that reflect these latest treatment and management approaches in terms of relating those back to morbidity and mortality risks that can take a long time for the data to emerge. So I think whilst that’s being built up, keeping those close links to the medical profession around the changing practices of mental health and treatment, that’s again, a way that the industry looks to support and make sure that underwriting philosophies stay up to date and relevant as well.
Tim Smith (46:35):
Great. Thank you. And Kathryn, so you mentioned that there are still some things perhaps that frustrate you or that you feel could be further improved in the industry in our approach that we take here. So I wonder if you could elaborate on that and give us some insight into what you think could be done better.
Kathryn Knowles (46:53):
Yeah. I mean, obviously I just mentioned a little bit about the things to do with suicidal thoughts, but I know that is a very, very big debate. Obviously far more people being able to use the EGPR to be fantastic. There has been a lot of work done as well upon things like decline letters. Like, as I say, you know, if, if you know, you’re being declined for life insurance, you’ve got mental health condition. There’s, it’s a very clear statement that’s being made. And there has been a lot of work done with insurers and in different people in our industry to try and make sure that we can make those conversations as, as easy as possible, or as it say, as nice as possible, even though it’s not going to be nice. When you have an adviser involved that can obviously, or somebody involved, who’s kind of like a bit of a middle person as professional that can help to it, it can help to soften the message that’s being said, and obviously can then look for alternative approaches. But that will probably be, be the key things for now. There’s more, but that’ll probably be my key things for now.
Tim Smith (47:57):
Great. and one question that’s come in is around policyholders who perhaps have existing cover and then develop mental health conditions while they have cover. And in the context, particularly, I guess, of the current financial crisis and the, the cost of living rising people might come under increasing pressure to be able to afford their insurance premiums. And perhaps, you know, I guess the question is, is there enough done really to highlight the value, of their cover and the fact that perhaps if they were to lapse their cover, then it would be more difficult to reinstate it because they’d have to go through that underwriting process. And could there be anything more perhaps done in that area? Maybe Lisa, can I come to you on this one?
Lisa Balboa (48:43):
Yeah, thanks Tim. And I think it’s important sort of from that question, that’s come in to highlight that, you know, those payment premium holidays, they’re generally continuing on a flexible basis to support those customers in financial stress, even beyond the pandemic. So people wouldn’t be forced into lapsing. So that’s actually really valuable the way the industry has come together to embed these positive changes in terms of the initiatives that have we’ve got together and aligned on as an industry. And also just going beyond that. So of course like you’re saying people’s mental health is deteriorating. Paul, what struck me was a, the impact on younger people as well. These are sort of the next generation of protection insurance customers. So it’s a highly relevant question. And as part of the mental health working party, we are looking at what are some newer product designs that might be able to support the ongoing mental health needs of customers.
Lisa Balboa (49:29):
So, you know, those newer data sources, those electronic medical records, maybe wearables or health apps to give some lifestyle data, perhaps they open up some opportunities for newer product designs that really get closer to the mental health needs of customers as an ongoing basis. So from an underwriting perspective that could perhaps open up different structures, like continuous underwriting or reviewable underwriting, but I think there’s lots more debate that needs to be had there if that’s the right approach. So I’ll just highlight three factors there that that might be considered, and it’s going to be, you know, really thinking through is that the best way forward for customers? So a more continuous underwriting approach. It might not give the sort of price stability certainty that customers would be looking for. Also the data itself would need to be very reliable, incredible for that analysis to underpin the risk assessment.
Lisa Balboa (50:15):
And also it’s a lot more intensive from an admin perspective to have these products that, you know, from an underwriting perspective might adapt to the health needs. So that could mean that the product itself might not be sustainable, but there’s lots of ways. I think if we look at the premium you know, the premium payment holidays, how could we think, maybe beyond the underwriting side to the support side of the conversation. So, you know, we saw with those, those payment premium holidays, which I keep coming back to that really it’s the smallest number of people where you might be able to have the biggest impacts, and that can be true both in people’s health needs, but also in terms of the claims ratios that an insurer might see. So is there a way that insurers can do more to embed support services that actually reach out to those customers, maybe help prevent the severity of, of some of those mental health conditions that might be emerging at the moment.
Lisa Balboa (51:01):
And there’s quite a lot of innovation this, in this space, Insurtech operating in the mental health space that might be able to add value here, if insurers want to integrate with those. And also, I think it’s important to ensure that, you know, we do have a, a strong national health service here. It might be under pressure. But I think designing these services in a way that can support the national health service and integrate with that excellent primary care that we have and make sure that we’re adding value as an insurance industry in this space is really important. So yeah, it’s definitely something that Hannover Re UK Life Branch. You know, we have a strong history of supporting these sorts of product designs and innovations in the life and protection space. So as part of our sustainability strategy, I think, you know, we welcome the opportunity to collaborate with insurers on these sorts of product developments that can really broaden that insurance coverage and actually support the development of products that support customers’ health and, you know, provide that benefit to the insurer as well, in terms of, you know, less claims for the insurers, positive, both for the customer and the insurer and for the reinsurers.
Lisa Balboa (51:59):
So I’m hopeful that we can sort of really align here to think, you know, based on reflecting on Paul’s talk, what more can we do here to make sure we’re supporting customers in the best possible way when it comes to mental health.
Tim Smith (52:10):
Great. Thank you. And Kate, is there anything you’d like to highlight on the underwriting side that you feel we could sort of build on or improve upon?
Kate Baldry (52:18):
Yeah, so there’s a, there’s actually nearly 300 types of mental health conditions listed in the, the DSM five, which is a resource that doctors use to standardise conditions and definitions. So from an underwriting perspective, it’s really, really important to actually be aware of all of these and the prevalence of health and they’re being used, whether we need to add new definitions into customer journeys or, or into the underwriting manual. I also think there’s scope from using behavioral economics techniques to improve the way we ask questions. So, if, for example, we could normalise it with data and say one in four people experience a mental health problem of some kind feature in the UK. Have any of the following conditions affected you depression, et cetera, as Kathryn said to kind of help break down barriers? I do think we will continue to experience an increase in mental health diagnosis, some which will be a direct result of coronavirus.
Kate Baldry (53:12):
I believe some GPs are even predicting the current one in five could move to more like one in three being called a second pandemic. And we also have a cost of living crisis to contend with. And we know that COVID has caused significant problems for children’s mental health. I also believe that social media is certainly have an impact as well, both in positive and negative ways. Suicide accounts for one death around the world, every 40 seconds and severe mental illness has been found to reduce life expectancy by 10 to 20 years, this provides a challenge and an opportunity to our industry and, and more widely in the UK. And presently the way we write protection business, we have one opportunity to underwrite someone the term of their policy. So 25, 30 years, one chance to get it right, no pressure. And that definitely works and it will continue to work well for some people, but however, we’ve got many customers and potential future customers who will start to look to insurers as wellness providers and engaging with insurers about mental and physical health on an ongoing basis could become the norm and it will also help to reduce the pressure on the NHS.
Tim Smith (54:24):
Great. Thank you. Paul, I know you need to leave us very soon to go to another event, but could I just ask you very quickly as we’ve had a question in directed at you have you seen a very clear difference between countries in terms of the population’s mental health status during the pandemic and is this in some way related perhaps to the level of lockdowns and different approaches, different countries have taken?
Paul Farmer (54:51):
Yeah. thanks. It’s a, it’s a really important question. Measurements across countries are tricky because the, because of the nature of the way that different communities and societies count the prevalence and the overall data, I think we know from our friends in the international initiative for mental health leadership, that so far the lockdown approach policy approaches to lockdown has not necessarily in and of itself impacted on overall prevalence rates. However, there’s still a long way to go to really dig into that a little bit in a little bit more detail before we get to that, to be able to really evidence that, however, what there is very clear evidence of is the impact on people’s mental health of this coronavirus period. So sort of almost regardless of the changes and of the, the way in which the different countries may have may have approached it.
Paul Farmer (55:43):
There’s no doubt that it’s had an impact on, on mental health around, around the globe. And of course, it depends on your conversation today is really interesting in terms of recognising that different systems have different levels of ability to be able to provide help and sports people, depending on where, where you are, where you are around the world. So, it, so it’s, it’s quite tricky to, to, to give exact, exact kind of comparisons, but we can we can certainly come back on that in, in the future. And can I kind of just very quickly with say one other thing, just listening to the conversation, which is, I think a real reflection on the, you know, what, for me feels like a real shift in terms of the way that the insurance industry is really thinking about mental health. And I think that’s a product of the work of many of the people on this panel, but also I think really shows that, you know, as the stigma starts to recede, people are becoming much more comfortable disclosing their mental health background in, in, in, into, into their insurers.
Paul Farmer (56:42):
And so that gives you a really good opportunity to understand both the breadth and the depth of the issues. But I think particularly as we’ve heard, as we’ve heard from all the panelists today, a sense about the, the sort of nuance around mental health, you know, that this is a, I think for far too long, we’ve kind of lumped all mental illnesses into one into one box without really understanding the very significant differences between different, different experiences and, and what it’s like to experience different types of mental health problems. And I think Kathryn’s point in all that is incredibly important that we help and, you know, we’re all on a bit of a journey to improve our overall understanding and education around mental health. And the more we can do this in inside the insurance industry, the better experience customers with mental health problems will, will have. And as we’ve already established the number of people who are potential customers with mental health problems are very significant in need a very large part of your customer base. So really it’s really great to hear that progress and also some real opportunities to go even further as we collectively understand more about our mental health.
Tim Smith (57:48):
Great. Thank you. Well, we are just about out of time now, actually the hour has flown by, but I would like to take the opportunity to thank everybody involved, so thank you to Paul, Kathryn, Lisa and Kate for providing your insights today. I hope everybody has found it interesting. I think it’s been a really interesting session. Lots of ground covered lots of positive improvements that have been made across the industry. I think it’s clear but also lots of room for improvement as ever. So hopefully we can reflect on that and build some of that into our product developments and approaches going forwards as ever if you’d like to discuss any of these topics with us, then please do get in touch. And we’d be happy to work on some of these things with you. Thank you everybody.
Episodes of the Practical Protection Podcast include a transcript of the episode’s audio. The text is the output of AI based transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors and should not be treated as an authoritative record.
We often discuss health and medical conditions in relation to protection insurance and underwriting, always consult with a healthcare professional if you are concerned about any medical conditions and symptoms we have covered in any episode.