Speaking at the Protection Review conference this morning (July 11), Yvonne Braun, director of long-term savings and protection at the Association of British Insurers, said the insurance sector was a "sleeping giant" that had "huge but unrealised" potential to protect the UK against mental health.
So far, the industry had "done a lot of talking" about mental health — but "talk is cheap", Ms Braun told the conference.
The problems highlighted in the industry included high prices caused by underwriting practices and the way advisers and providers ask consumers to disclose information about their mental health.
Ms Braun said: "Why do insurers ask about stress and anxiety in the same breath as asking about hospitalisation and suicide?
"And how do we go about asking these things with empathy, humanity and respect?"
Speaking at the same conference, Helen Undy, chief executive of Money and Mental Health, revealed research by the charity that found high prices, exclusions, disclosure and accessibility were the key barriers between mental health patients and protection.
The charity’s mystery shopper initiative found that a consumer was charged between 100 and 300 per cent more for having a bipolar disorder diagnosis for the same protection product, despite the illness never affecting the consumer’s day-to-day life due to medication.
The research also found a disproportionate increase in premium costs for mental health conditions over what would be considered an equivalent physical health issue.
One consumer told the charity that struggling to get any cover due to mental health problems had stopped them from buying travel insurance for multiple trips, a scenario which she described as "dangerous for everyone with a mental health problem".
Ms Undy told the conference it was worrying that people were often unclear on whether their cover excluded or included their mental health problem.
She said: "People are being offered cover that excludes their mental health. That leads to a range of problems.
"People think they are unable to get insurance that properly covers them or people are unaware and they think they have cover when they don’t."
She went on to say that for people with mental health cover, having a group income protection policy through their employer was the best option but too few people had access to that.
A further problem the Money and Mental Health research found was that consumers often didn’t take out protection because they didn’t feel able to discuss their mental health problems.
This meant consumers often suffered with loyalty penalties because they didn’t want to switch to avoid such questions or sidestepped the process all together.
Ms Undy said: "Getting this bit right isn’t rocket science. I understand that changing underwriting methods may take time, but we have to get this right."
Research from Protection Review found 26 per cent of providers’ staff, who spoke to consumers about mental health, had no training on dealing with issues like suicide or depression.
On top of this, 57 per cent of advisers did not have a protocol in place when someone asked about suicide.
And 55 per cent of providers and advisers didn't have a process in place to refer a consumer to a specialist adviser when they were declined.
Consumers often then think, "I can’t get cover, end of", Kevin Carr, chief executive of Protection Review, said.
Speaking at Protection Review, Kathryn Knowles, managing director of Cura, said the industry needed to improve the way it interacted with people with mental health issues or who were suffering from trauma.
She said: "A decline from the insurance industry for someone with mental health is like saying 'we think you're going to kill yourself'... and they're left with a letter.
"We have to think about our responsibility to them as a person."
Ms Undy told the conference: "We need to see a review of underwriting and price for mental health, a shared best practice over exclusions, an accessible and supportive disclosure environment and product innovation to improve inclusion for pre-existing conditions.
"There is a lot already happening. But access to the right products that pay out at the right time is vital for the industry."
imogen.tew@ft.com
