Mental Health and Life Insurance: Data and Modelling

IFoA Conference 2022

Lisa Balboa, Maryse Nashime and Joe Wilson discuss their upcoming talk at The IFoA Conference on 22 June on “Mental Health and Life Insurance: Data and Modelling”.

There has been an increased focus on awareness and treatment of mental health conditions in the past decade. Statistics show that globally 1 in 4 people are likely to experience a mental health challenge of some kind each year[1]. The Covid-19 pandemic has shone a further spotlight on the societal impact of mental health. In particular, recent research from the mental health charity Mind shows that approximately one third of people surveyed in England and Wales say that their mental health has worsened during the pandemic[2].

With such a high prevalence of mental health conditions, it’s important to consider the touchpoints between mental health and life insurance. Indeed, the industry has been giving considerable thought to the challenges surrounding mental health in recent years and how to address these. The ABI (Association of British Insurers) published the Mental Health & Insurance Standards to guide insurers, including life insurers, in supporting the needs of individuals with mental health conditions when they seek cover[3]. ABI members and non-ABI members who signed up to these standards implemented them by the end of last year.

Over the past year and a half, our IFoA (Institute and Faculty of Actuaries) Mental Health working party has also been focused on facilitating cross-industry conversations around mental health in insurance. The interactions between mental health and the life insurance span the entire insurance value chain. We explored these earlier this year during our Mental Health in Life Insurance week[4]. During this week, our Products & Processes workstream brought together mental health charities, financial advisors, insurance distributors, underwriters, claims assessors, policy experts and actuaries to explore a wide range of touch points between mental health and insurance including:

  • Drivers for an individual to consider purchasing life insurance
  • Sales routes for purchasing life insurance
  • Life insurance product design, pricing and underwriting
  • Claims processes and access to mental health support

As members of the Data & Modelling workstream, we have been focused on exploring the data and modelling considerations in the risk assessment and underwriting of mental health conditions in life insurance products. We have been considering the possibilities that improved data availability could open up in terms of additional product and underwriting designs that further improve the availability and affordability of insurance products for those with mental health conditions.  

Ahead of The IFoA Conference in June, we will be publishing our paper titled “Data and Modelling Considerations for Mental Health in Life Insurance”. At the IFoA Conference we will encourage discussion of some of the key topics in this paper. We will suggest how improvements in data collection could be used to advance how mental health risks are modelled. We will also explore opportunities for actuaries to use this data and modelling to support continued cross-industry efforts to develop Life and Protection insurance products that:

  • Further improve availability and choice for customers with mental health conditions
  • Support customers with treatment and management of these conditions

To join the presentation and discussion on this important topic we encourage you to register for the IFoA Conference 2022 here:

Blog authors:

  • Lisa Balboa, Business Development Actuary, Hannover Re
  • Maryse Nashime, Senior Actuary, Partner Re
  • Joe Wilson, Pricing Actuary, RGA