Today, SuperFriend – a not for profit mental health foundation formed by Industry Super Funds and their insurers – released a ground breaking study into the real cost and level of insurance claims relating to mental illness and suicide.
In association with IFS Insurance Solutions, SuperFriend collected data from 13 ‘all profit to member’ super funds and six major group insurers over a five year period from 2007 to 2011, covering 4.1 million members.
The Super Mental Illness National Data (SuperMIND) Project showed that over a five year period claims related to suicide collectively cost the super funds’ insurers over $200 million with an average cost per claim of $120,410. Mental illness-related Total and Permanent Disablement (TPD) claims cost $147.9 million, at an average cost per claim of $82,960.
SuperMIND analyses claims related to mental illness, both TPD and Income Protection (IP), and suicide by gender, age and location, with the aim to help ‘all profit to member’ superannuation funds – and their insurers – better understand claim trends related to mental illness and suicide, and to target support for members.
The research found claims attributed to mental illness and suicide represent approximately 10% of all insurance claims within super. In some age groups this rises even higher, with suicide accounting for nearly 26% of all male death claims in the 25-34 age group and mental illness accounting for 25% of all female TPD claims in the same age group.
“The SuperMIND research reinforces the reality that mental health and wellbeing is a risk management issue not just for super funds and their insurers but for government, employers and the broader community,” SuperFriend CEO Margo Lydon said.
“Mental illness-related claims are one of the few insurance claim types that a fund and their insurer can influence, lessen and ideally prevent if detected early. By providing participating funds tailored SuperMIND reports that track their results against the benchmark, this research aims to help funds better understand and identify where issues are happening – by age, gender or location. Funds and their insurers can then actively develop early intervention strategies to help reduce the financial and social impact of mental illness and ultimately better support their members’ wellbeing.”
Other key findings from the research, included:
Mental Illness-related Total and Permanent Disablement (TPD) claim rates peaked for males aged 50-54 and females aged 55-59
Mental Illness-related TPD Claim rates were higher for men than women at all age groups between 15 and 64 and in most locations.
Mental Illness-related IP Claim rates were higher for men than women at all age groups between 15 and 64, except in the 55-59 age group.
Claim rates for suicide were around five times higher for men than women – a trend that reflects the higher suicide rate of males in the broader community.
Victoria and Queensland had claim rates for suicide that were almost double the claim rates of other locations.
Victoria and Queensland had claim rates for both mental illness-related TPD and IP that were higher than the claim rates of most other locations.
Shane Fielding, Principal of Group Risk at IFS Insurance Solutions, who analysed the data, said while there has been significant focus on the impact of increased claims on the cost of insurance within superannuation – with premiums rising anywhere from 30% to 150% over the past 18 months – this is the first time data had been collected and benchmarked to identify trends and help drive solutions beyond price increases to manage the increasing rate of claims.
“While insurers do need to think about how they price their offer, product design and the claim process is equally as important when it comes to claims related to mental illness,” Mr Fielding said.
The project does not aim to answer why certain trends have occurred but rather provides the most detailed analysis yet of what is happening and where it is happening in terms of mental illness and suicide claims for Australia’s ‘all profit to member’ superannuation sector.
“The financial and social impact of mental illness and suicide is significant and reinforces the need for preventative measures through greater member and employer engagement and education as well as early intervention, rehabilitation programs and wellness initiatives to help members stay in work or return to work sooner,” Ms Lydon concluded.
To find out more about SuperFriend, head here.
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