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Protection Review remarks by Yvonne Braun

[Check Against Delivery]

11 July 2019

Many thanks for sharing your story Mark and congratulations Kevin for organising today’s event.

It is safe to say that almost all of us will have either experienced mental health problems ourselves or in our family or circle of friends.

In past decades, there used to be a stigma around it and it’s wonderful to see it is gradually lifting.

People in the public eye like Stephen Fry have spoken about this, and so have the young royals whose charity Heads Together has assembled a roster of charities working on mental health issues.

There is also a recognition that mental health services have been the poor relation in the NHS, with extra funds announced by the Prime Minister only last month.

Government is also recognising the impact of mental health problems on the economy – 13% of all sicknes absence can be attributed to a mental health condition, costing the British economy a staggering £8billion a year. And with the Stevenson Farmer review and Good Work Plan, as well as the Prevention Green Paper we are expecting, mental health is finally having its moment.

This is long overdue. We only need to look at the statistics:

According to mental health charity Mind, 1 in 4 people in the UK will experience a mental health problem each year. And 1 in 6 people report a common mental health problem (such as anxiety and depression) in any given week.

I will speak for just over ten minutes and talk about the value of protection insurance, the opportunity to build out coverage but also the challenges we face to improve our offering and treatment of mentally ill customers so that we both grasp the market opportunity but also treat these customers better - because the two go hand in hand.

And if I would have one observation on our sector, I would say there has been a lot of talk about this – but as we all know, talk is cheap.

Let’s first look at the scope of coverage today.

Of course, it is the whole point of our sector to be there and support our customers in times of crisis.

And supporting people with mental ill health is a very large part of what our sector does.

In group income protection, mental health conditions have been consistently in the top three reasons for a claim. Last year, protection insurers paid out £85 million to support customers in mental ill health. These payments alleviate the financial stresses that come with being unable to work which is vital, but equally important is the professional mental health support that is part of these products.

As an example, last year, group income protection providers arranged more than 75,000 interactions with employees, through employee assistance programmes or fast track access to counselling, precisely the sort of early interventions that we heard about earlier.

Yet despite all this, our sector is a sleeping giant – it has huge but as yet unrealised potential to promote and preserve the mental health of the nation. Only 3.5 million people are covered by group or individual income protection. That leaves 29 million people in the UK with little or no protection who face greater levels of financial vulnerability, without easy access to the support services they need. Insurance can be one critical solution; the potential is there. 

We also know that the appetite is there. We published research earlier this year on how protection insurance products are framed to understand the types of messages that really cut through with people, especially those currently less likely to buy protection insurance. The standout result from this research was how strongly messaging around mental health resonated, especially with these groups.

So let’s consider honestly what we can do better.

Some would say our sector still has a blind spot when it comes to serving people with mental health conditions.

Over the past 18 months, there have been several damaging stories in the national press about access to insurance for people with mental health conditions and the poor communication of the reason for declining cover. These issues damage our reputation, and they do colour people’s perception of our sector and whether they even consider taking out insurance.

It’s always useful to take a step back to recognise our own shortcomings, and this is true of our sector too.

We need to take a hard look at the questions we ask, the decisions we make and how we communicate them, and be prepared to challenge the accepted wisdom and long-held assumptions.

At the start of this year, the ABI held an event in partnership with the Royal College of Psychiatrists to do just that. We brought together underwriters, mental health charities and medical professionals to help us hold up a mirror to our industry and to ask those difficult questions. I spoke at the event and found it truly humbling how many people with mental health problems in our sector are willing to share their experiences to help improve the situation for our customers and our customers of the future.

Out of this event emerged the ABI Mental Health Working Group.

What are we trying to tackle?

We want to develop a detailed understanding of how people with mental health conditions experience our sector to identify what we need to address and how.

To do this, we have engaged with charity partners, including Helen’s excellent organisation[1], to gain detailed feedback on the issues they have identified with insurance practices.

And as we have already heard from Helen, these stakeholders fully appreciate that insurers need to gain an understanding of an applicant’s medical history, including their experience with mental ill health.

They also acknowledge the need for these questions to be comprehensive, and they accept that disclosure may lead to a higher price or cover being declined.

What the charities dispute is the need for insurers to ask individuals about five different mental health conditions in one question, or to ask about topics that have little or no relevance to assessing the risk profile of a customer.

A striking example of this is the still common practice of asking questions about an individual’s propensity to have “suicidal thoughts”, a question that baffles medical professionals and underwriters alike.

Other areas of challenge refer to the lack of a logical framework of questioning that separates conditions by severity, with charities legitimately asking how useful it is to enquire about episodes of stress and anxiety in the same breath as hospitalisation or suicide attempts.    

It is not the questions alone that raise concerns. There is also a strong desire to understand how the underwriting process actually works. The perception that underwriting is an incomprehensible “black box” has long been a source of irritation to many charities. This is not about influencing insurers’ or reinsurers’ underwriting philosophies but about explaining a process and its logic. There is nothing so corrupting to a sense of fair play as a feeling we don’t understand the rules of the game. 

Finally, it is about how we communicate with consumers, how we convey the reasons for higher premiums or declining cover, and how we make sure customers understand the exclusions that may apply. And perhaps most of all, how we do this with empathy, humanity and respect.

We are working these challenges through with our members in the Mental Health Working Group. This is not about reinventing the wheel but looking to update our practices. Over the coming months, the ABI will seek to develop a mental health initiative for protection, health, and travel insurance. This will not seek to constrain innovation or create a one-size-fits-all model, but to provide a framework for concrete action.

The Working Group will focus on the questions, the decisions, and the communications.

We have been encouraged that our members accept that the framing of questions leaves a lot to be desired and that thinking has and should evolve on grouping multiple conditions in a single question.

Our members also accept that being a little more transparent about how underwriting works will not jeopardise their business model.

Everyone recognises that we can and must get better at communicating everything from what insurance is, how you apply, who you speak to, what they will ask, why they will ask it and what happens when you are declined, have exclusions applied or your premiums are raised.

Ultimately, as an industry, we should be best in class in engaging with individuals who have suffered trauma or are under stress. Whatever part of the insurance industry they are dealing with, people at the point of claim are highly likely to have encountered a very stressful situation. Doing this well should be our bread and butter. 

We will also work with charities such as Helen’s Money and Mental Health Institute, Mind, and Mental Health UK to create consumer information webpages that answer all these pressing questions.

We hope this will be a definitive go-to guide that all insurers can reference and which will has the support of the mental health charity sector.

But of course insurers are only one part of the equaltion here. Intermediaries are a crucial part of the value chain and key to getting this right.

We need to support advisers when they guide individuals with pre-existing mental health conditions through the underwriting process. We need to help them with the information and knowledge they need, and we need to listen to them and learn from their experiences of customer engagement. That is why the ABI is also working closely with the Protection Distributors Group and Income Protection Task Force to ensure we are all on the same page.

So in terms of my three messages to take away from today:

  • We have much more to do to improve how we ask questions, reach decisions and communicate with people applying for insurance.
  • We need to address the lack of transparency of underwriting.
  • And we need to support advisers and work together.

It’s time that our sector seizes the opportunity to truly make a difference to the mental health of the UK. If we address the issues that keep recurring and damage our reputation as an industry, I believe our customers, society at large, and insurers will reap the benefits.

Helen gave an example at the end of her talk of a customer who had to leave work because of mental ill health and claimed on her protection insurance. Her whole life was put back on track by her insurer, she retrained and is working again.

This story shows just what we could be as an industry, which would rebuild trust, and really demonstrate our social purpose.

Let’s be the change that we want to see.





[1] The Money and Mental Health Policy Institute, https://www.moneyandmentalhealth.org/

Last updated 11/07/2019