Six insurers have re-signed deals with a charity that aims to improve the wellbeing of Australian employees, as the cost of mental health insurance claims soars.
Insurers AIA, TAL, Hanover Life RE, CommInsure, MLC and Beazley Group have signed three-year deals with SuperFriend, while MetLife has signed up for the first time.
The deals come as claims of psychological injury resulting from bullying or harassment at work, and other mental health issues are growing in prevalence.
Each insurer will pay 0.15 per cent of the premium paid by superannuation funds to SuperFriend, whose activities they see as reducing claims.
Margo Lydon, chief executive of SuperFriend, said insurers see this as a long-term investment to claims reduction. “The current statistics that I have, which is looking up to 2012, is that our group insurers are paying in excess of $160 million per year for TPD and IP claims relating to mental illness, and for suicide it’s over $100 million a year.”
Lydon said feedback from Comcare, the government organisation working with employees and employers to reduce the human and financial costs of workplace injuries and disease, was that insurers are paying more now for psychological injury claims than they are physical illness and injury claims for the first time in their history.
Jim Minto, group CEO of TAL, explained his reasons for re-signing with SuperFriend, as a payback in reducing claims, but also a high numbers of claims cost the member, by making insurance less sustainable.
“If we recognise that stress, depression, mental illness is a fact of society, it’s a fact of life, cover for that needs to be provided, just like flood cover needed to be provided for general insurers. The question is, how do we make it manageable and affordable without taking it away?”
“We need the insurance to be relevant and valuable, but not overwhelmingly expensive, whereby the funds simply can’t afford to deploy it for members. So making sure it’s sustainable is quite important.”
He added that there was a moral obligation too.
“When you are a key business partner of a major superannuation fund, you have a member promise, which is around delivering protection needs for the fund members, who are members of our society in every respect.
“As an organisation, we try to be very aligned around the purpose and intent and value of life insurance and what it does, and the benefit that it brings to people.”
Super funds signed on to SuperFriend offer individuals, employers and workplaces information about improving and maintaining mental health.
SuperFriend is also running pilot programs developed in partnership with mental health service providers and funded by the insurers in various sectors, including engineering, maritime and teaching, tapping into such topics as positive psychology, bereavement and loss.
“We have potential access to 680,000 employers through our partners. There is no other organisation in the country that has that access other than probably the government,” said Lydon.
Superannuation funds signed up to SuperFriend include Industry Funds Forum, Australian Catholic Superannuation and Retirement Fund, AustralianSuper, CBus, Caresuper, EnergySuper, NGS Super, Rest Industry Super, SunSuper and TWUSuper.