Group life insurers have sought advice from beyondblue on how to improve claims but the mental health organisation told the Investment Magazine Group Insurance Summit there is also room for improvement with respect to applications and underwriting.

With thousands of Australians dying yearly from suicide – one of the most preventable forms of death – and mental health one the third-biggest causes of income protection claims, the insurance industry has more work to do in this area, beyondblue policy adviser Kelly Wilson said.

Issues commonly arise first when someone applies to have their cover changed or upgraded and is refused or has an exclusion placed on their policy, Wilson said. At claim time, one source of problems is when someone has disclosed previously suffering from, or seeking support for, a mental health condition.

In one instance, a woman contacted beyondblue and said she had experienced depression, anxiety and an eating disorder as a teenager, as a result of bullying, Wilson told the summit. The woman self-harmed during that period; however, she was able to get treatment and now, in her mid-20s, she was fully recovered.

But her application for insurance cover was refused on the basis of previous depression and anxiety and the eating disorder.

“In that process of applying, she wasn’t asked for any further information, wasn’t asked for a report from her doctor to clarify her situation now,” Wilson said. “In her experience she shared with beyondblue, she said, ‘Having worked so very hard to survive and recover from my illness, encountering this so many years on is a real blow.’ ”

Insurers have approached beyondblue for advice on how to do things differently, and much work is being done, particularly at the claims end, she said. But more work is needed at the “applications and underwriting stage”.

Psychiatry professor Patrick McGorry – a former Australian of the Year – said the roughly 3000 Australians who die from suicide each year, and the 68,000 suicide attempts a year, are highly preventable. Studies have shown the majority of people who attempt suicide and survive quickly regret it, underscoring the importance of intervention and treatment.

“One of the points I have always made is you are in a rich country like Australia and only 1 in 3 people with mental illness can get treatment,” McGorry said. “You are going to have hundreds and hundreds of people die unnecessarily from suicide because they have tried to get treatment that is not available. If it was breast cancer or heart attacks or chest pain it would be a national scandal.”

There have been positive developments. The federal government has improved access to mental healthcare by funding allied health such as psychology and supporting organisations such as the headspace National Youth Mental Health Foundation.

But with only 5 per cent to 6 per cent of the national health budget spent on mental care – which is nearly 15 per cent of the burden of disease – many people are going untreated.

Margo Lydon, chief executive of workplace-focused mental health organisation SuperFriend, said the insurance industry was changing for the better. She said it had actively supported and funded SuperFriend and that in the eight years she had been chief executive, she had seen a substantial increase in allied health professionals working inside insurance companies.

In the last two years, more than 2200 insurance staff had been trained in caring for themselves, others and their members in distress by qualified psychologists in SuperFriend mental health programs, she said.

More needs to be done, however, particularly in creating a culture of care within the financial services industry, which still often tends to look at things through the lens of what is an identifiable risk, Lydon said.

Ben Hurley is a journalist and editor with more than a decade of experience in the industry. He has written for The Australian Financial Review, Business Review Weekly, The Guardian and a range of specialised and industry publications.