Mental health costs insurers $750m per year

Taking a proactive approach to helping those suffering from mental illness could save insurers up to $750 million per year, according to SuperFriend.

Speaking to Financial Standard, Superfriend chief executive Margo Lydon said that of the $180 billion drag on the economy from the adverse effects of poor mental health, $750 million of that is felt by the financial services and life insurance industries.

"We have substantive costs that by and large can be prevented if we are all thriving. The life insurance industry is paying out $750 million per year for primary cause of claim being mental health," Lydon said.

"The other element for super funds is that if people are in good work they are typically functioning well and are therefore contributing to their super.  So, we have a long term aligned vision of what super funds want to see for their members and that is for their members to retire as wealthy as they possibly can be but in a really good health and wellbeing state as well."

Lydon said there are a number of factors that have led to an increase in awareness over mental health issues including a higher willingness to talk about and seek help earlier.

"What that has translating to is an increase in the number of claims; workers compensation as well as life insurers are both experiencing an up-tick in the number of mental illness related claims."

SuperFriends' Indicators of a Thriving Workplace Survey showed that one in two Australians have experienced, or are experiencing, a mental health condition.

"The research showed that of that 43% have reported that work either aggravated or caused the mental health condition.  So, we have this incredible opportunity to look at this and say how we can improve that," she said.

Lydon added that the superannuation industry has been doing great work to address mental illness related issues both within their own organisations as well as for members.

"Some of the funds were really quite surprised and concerned about the level of claims coming forward for mental illness.  Collectively they thought this is a non-competitive issue, everybody will benefit if we can play our part, our role, in helping members to be their best," Lydon said.

Read more: Mental healthSuperfriendMargo Lydon
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