In recent years, mental health-related claims have moved from the margins to dominate the disability landscape, accounting for more than a third of all claims in major markets like Canada, Australia, and New Zealand, and nearly half in countries like the UK. Even more concerning than their prevalence, however, are their costs: mental health claims are consistently among the most prolonged and expensive claims to resolve, placing mounting pressure on insurers to intervene further upstream.
In light of this, counseling solutions have emerged as a clear path forward. Not only are they well-suited to address the explosive rise in claims and demand for mental health care, but they also align with the broader industry shift toward a more comprehensive and better-supported customer journey.
In the latest episode of Wellbeing at Work, a Workplace Options podcast, Marketing and Communications Manager, Emily Fournier, sits down with WPO Director of Business Solutions, Kay Burd, to discuss the pivotal role counseling will play in the future of disability insurance, and what insurers need to know to enhance their market performance.
Read the full transcript of their insightful conversation below:
Emily: To get started, I’d like to ask about why you think the insurance approach to mental health has changed. Historically, the story went that mental health-related claims were often denied and seen as a losing case. What’s behind today’s efforts to address psychological injury in the insurance space?
Kay: To answer your question most succinctly, increased awareness and accountability are big reasons for addressing psychological injury in the insurance space and elsewhere. Organizations recognize their duty to create safe and healthy work environments, but with more awareness and insight, they and their insurers are recognizing that “safe and healthy” includes both physical and psychological wellbeing.
In a review of anonymized data conducted by Workplace Options last year, four workplace concerns impacting psychological safety were most prevalent: job performance, managerial conflict, lack of recognition, and work-life balance—all of those things leading to potential stress, burnout, disengagement, and ultimately to having employees leave. So, companies want to have resources in place to address these risks to better attract, engage and retain employees, thereby strengthening their innovation, productivity, and growth.
Layered on top of companies’ best interests, an increasing number of states and countries—such as Australia, Mexico and Japan—also recognize psychological safety and have legislation to address it. But I believe you’ll be talking more about that in a future podcast.
Emily: Yes, you’re right—we absolutely are. And speaking of other episodes, in a previous podcast, you mentioned a growing focus you’ve observed among insurers on engaging with clients “more than at just renewal” and really building out the customer experience. Why do you think that is? And how does mental health support complement this approach?
Kay: My previous comments were really related to other types of policies, such as pet care and critical illness. Some providers have shared their desire to improve client satisfaction and retention and are looking for ways to add value while controlling costs. A mental health provision, such as in-the-moment counseling, can be integrated into these policies to support participants even if they aren’t filing a claim. For example, a pet owner may not be filing a claim due to illness but has a dog that’s lost, or a policy holder is awaiting a medical diagnosis, so they haven’t necessarily been diagnosed with a critical illness but they’re stressed by the anxiety while they wait. With a mental health benefit incorporated into these policies, these people would be able to talk with a professional counselor to help them manage their anxiety at that moment.
Overall, anytime we can meet people where they are, it’s beneficial, and avoiding delays in providing care is beneficial. Mental health support is another answer to the question, “What does this policy do for me?”
Emily: Absolutely, I think that’s a great way to put it. And when it comes to answering perhaps some of insurers’ most pressing questions—how this affects claims frequency, duration, and costs—how does mental health support make a material difference for insurers?
Kay: When mental health is outside the insurer’s control, potential obstacles such as long wait times, stigma, time, and geographic constraints can inhibit care. So, it keeps the policyholder from really getting the support they need. Whereas with the managed care through the insurer, these barriers can be overcome.
So what we see is, if it’s left up to the individual and the market in general, appointments can take up to several weeks or months. In areas where stigma exists, policyholders may be discouraged from seeking care—preventive or curative—out of fear of being judged or discriminated against. And then there’s the time and geographic constraints that make commuting to and from appointments a challenge and therefore inhibit outreach.
So again, when within the insurers’ control, the guarantee for quick access to confidential care overcomes all of these barriers and gets people the help they need so they can recover as quickly as possible.
Emily: Absolutely, I think that’s an excellent point. And finally, one last question before we go: looking ahead, where do you see mental health support fitting into disability insurers’ overall strategy? Do you think it will remain a ‘nice-to-have,’ or evolve into something more foundational?
Kay: Hard to say, but I do think mental health support should be integral to disability insurers’ overall strategy. At a minimum, I think we’ll see more insurers owning the delivery of mental health care by incorporating it into their disability programs. This way it ensures care is provided when it’s most impactful and improves that return-to-work outcome.
Like what you read? Be sure to check out our podcast page for more insightful conversations on the future of wellbeing in the insurance space.
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