Premiums to Rise, Longer Mental Health Claims Predicted

Premium growth for life cover is predicted to rise by 1% this year, says a Swiss Re underwriter. However, longer claims for mental health issues are also predicted.

Giving a presentation to members of Financial Advice NZ during an online seminar, Cara Jiao, Head of Retail Pricing ANZ at Swiss Re, also said the effects of so-called ‘long Covid’ – the term given to a range of medical conditions experienced by some of those who have been infected with Covid-19 – will also be prevalent.

“Long covid affects all parts of the body and shows up as chronic conditions with multiple and varied symptoms,” said Jiao. “These symptoms can be persistent, but come and go over time, and have a negative impact on daily life.

“They can show up as chronic conditions, such as heart disease, diabetes, kidney disease, and neurological conditions. There is no specific treatment.”

However, she says people with chronic health conditions are at an increased risk of depression.

…people with chronic health conditions are at an increased risk of depression…

“On the sickness related claims side we are seeing that people are struggling with mental health conditions due to covid stress and disruptions, down to loneliness through isolation, economic worries, and their condition deteriorated during lockdowns,” she said.

“The same may be true of people with Covid as symptoms linger for months and sometimes years.”

Jiao says mental illness makes up 20% of all sickness claims in New Zealand. And that while the figure has been stable, the length of time on claim is getting longer.

“Mental illness is the challenging one from a claims experience,” she said. “There is also a long delay in mental illness reporting. In that people have had mental health [issues] for some time before they lodge a claim. But the treatment cost is high, so that remains a challenge.”

…mental illness makes up 20% of all sickness claims in New Zealand…

Turning to excess deaths – the number of people who die over and above expected norms – Jiao said an analysis of data found that Covid-19 and related deaths account for most of the excess mortality, and that excess mortality seems to have stabilised from the most recent analysis by the Actuaries Institute in Australia.

“But this [excess deaths] is mainly through the older age group,” she said. “There are signs that excess mortality [rates] are slowing down, but are much higher than we predicted.

As for Covid-19 itself, she says there is no evidence the infection was a major cause of insurance claims.

Another trend identified in her data is that more people are having accidents in New Zealand than seen previously.

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