Once upon a time – and it was not really that long ago – there were industry conferences and seminars.
You remember the sort of thing. You dressed in your best bib and tucker, mingled with your competitors, caught up on old friends and former colleagues, and perused stands where insurers and others offered their goods, often giving those attending keyrings, water bottles, and other useful items, all adorned with logos.
There were talks on legislation, selling techniques and the latest medical statistics. But over the past few years, there was a new addition. Almost all industry get-togethers had a session on mental illness. Those who attending a few of these could probably reel off the statistics by heart.
With mental health issues increasingly added to protection policies, this was a welcome and very necessary addition to the range of topics covered.
No longer does anyone say – or dare to say – it’s “all pulling yourself together and looking cheerful”.
There can be few in the industry, if any, who are not now aware of the huge cost of mental health problems. There’s a cost to the insurer in terms of paying for care or compensating for time taken off. There’s a cost to the employer – obviously in the premiums paid but also indirectly.
There is the expense of dealing with the issues caused when a colleague develops a mental health condition. This is not just related to that person’s own work. It can spread to that person’s colleagues, to the department, and if the person suffering is sufficiently high up the company chain, to the whole of the organisation.
I have personal experience of this. And so do most others. We probably all know someone who has been afflicted in this way. So I would be the last to denigrate this new awareness.
The question is where do we go from here? The realisation that a problem exists, and setting it down clearly as the industry has done, is only the first stage of what will be a long struggle and, perhaps, the defining note between the successful and the also-rans in Protection Twenties.
While not everyone is ready to do this, and the present crisis may not be the best time to embark on new routes, looking at mitigating the problem is something few insurers have yet undertaken.
Take a sideways glance at measures from general consumer insurance.
Those covering household risks insist on decent locks – often specifying the exact type. The days when you could open a car with a bent metal coat hanger and hot wire it have long gone. Bike locks have increased in unopenability as bikes have become more valuable.
The motor policy people have a place called Thatcham (not far from Reading) where security devices are tested and the cars themselves are driven to destruction so insurers can learn the best way of putting them back together – or decided a vehicle is beyond economic repair. It was set up over fifty years ago – in 1969.
Thatcham and places similar in other countries have given motor insurers a wide variety of lessons. It enables them to talk to motor manufacturers about how to design cars for security, safety and repairability – after all, for many purchasers, a low insurance premium is vital.
It is also a good lesson in that section of the industry working together and not against each other. Thatcham is financed collectively by motor insurers who see a common need.
Now where is the protection industry’s Thatcham? If we are take all those good words about mental health seriously, where is the next stage – doing something about it?
Where is the guidance to help prevent mental health issues of which are substantial number are work-related? Even many issues which are seemingly poverty-related or relationship-related can trace their origins to work practices.
Unsatisfactory and poorly-paid work are at the root of many mental health problems. Insurers should be producing information for employers on how to avoid this. Even the basics need to be spelt out – mental health affects the bottom line of profit and loss. If you have a stable and happy workforce, you achieve more. The opposite also applies. In spades.
Insurers are powerful bodies. Many have high value investment arms – either as part of the insurance fund or standalone pension and other cash.
They can use this muscle to persuade companies in which they invest to modify working practices just as they have previously used voting power on issues such as gambling and tobacco.
At the individual level, much more needs to be achieved in terms of tailoring premiums to company practices. Customers are used to this – at home, they know they pay more for property and theft insurance if they do not have adequate locks and a decent standard of upkeep.
The Association of British Insurers has dipped its toe in the water. But it seems to be explanation of what insurance can do rather than a Thatcham-style approach.
The ABI Protection and Health team says it “works closely with member companies and charitable organisations to develop an industry and consumer-focused initiative to improve how our sector serves consumers with mental health conditions.” This report was scheduled to be delivered by early 2020 – presumably postponed due to the crisis.
It talks of “traditional views on mental health needing to change, and insurers helping to lead the way.”
Yet the evidence from all those conferences is that many major insurers have already recognised this.
The limit of ambition seems to be “discussing mechanisms to improve consumer understanding of insurance and the underwriting journey involved in accessing products such as Life, Critical Illness, Income Protection, Health, and Travel insurance.”
It goes on to say: “We continue to strive to have best customer processes and achieve the best consumer outcomes possible.”
Nothing here about tackling root causes or even understanding them.
Before Covid, we faced a serious problem. Now it can only get worse. Covid escape clauses in some insurances will not help engender consumer trust.
Doing something about mental health will be a first stage in rebuilding confidence in an all-important industry.