Health Risks

A difficult test for the mind

Mental illness has now moved to the top of the list of triggers for disability insurance. There has been a heated debate in the media over whether the number of such illnesses is actually increasing, or whether it is more a case of much ado about nothing. TOPICS Online looks at the implications of the trend for the business model for disability insurance.


For a long time, orthopaedic illnesses were the number one trigger for occupational disability. However, they have now been knocked off the top spot in Germany by mental illness. In some occupational groups, 25 percent of all claims now stem from mental illness. A parallel trend can also be observed in other European states. Initial indications from epidemiological studies show that the rate of mental illness in the population has not increased. However, illnesses such as anxiety disorders and depression are recognised and treated at an earlier stage today than they were in the past. Critical for insurers: Those affected also include groups that were considered low-risk up to now, and are therefore of particular relevance for competition.

What are the implications of this trend for insurers?

Mental illnesses mean changed prerequisites. With physical complaints, the doctor can arrange for specific examinations to be carried out, for example an ECG or a blood count. "The objective results of these measurements are available to the insurance company with every claim for benefits," explains Dr. Achim Regenauer, Chief Medical Director at Munich Re. "They help the technician in the claims department to compare the applicant's remaining abilities against the requirements profile for the professional activity in question." In addition, based on the findings, the options for improving the person's health and the prospects for reactivation can both be determined. "However, the situation is very different with mental complaints. The causes are extremely complex and are rooted in both the personality structure of the person affected, as well as in their personal history and social environment. For these reasons, it is often impossible for the claim assessor to determine the severity of a mental illness," Regenauer adds. Correct classification is made even more difficult by complicated and competing diagnosis codes.

Action needs to be taken

Due to their complex nature, mental illnesses require a suitably comprehensive and qualified claim assessment. This means additional work and expense, but it is a measure that will pay dividends in the area of case management. Because the insurance company can, and indeed should, provide targeted help to reintegrate the affected persons into their professions, for example by altering the work profile, creating new workplaces, or in the form of occupational medicine support. The fact is that the longer a person with a mental disorder is on sick leave and incapable of working, the more difficult will be their reintegration into the workforce. And, of course, the higher the amount of required benefits will be. "Particularly at young ages, mental illnesses are a significant risk driver," says Patricia Lewerich, Head of Section CoC Life Insurance Products and Risks at Munich Re. "In addition, they affect low-risk occupational groups in particular. Insurers thus face an increasing number of beneficiaries who, thanks to a cheaper occupational class rating at attractive conditions, have insured themselves to an above-average level."


Mental illnesses require a change of approach in terms of claim assessment and case management. "Providers need to organise their risk management in a more interdisciplinary way than before," Lewerich points out. A comprehensive overall picture can only be obtained if the actuarial department, insurance medicine and claims management all collate their findings. It is important to do this to increase the visibility of the risks from mental illnesses and the resulting challenges in the area of claims management." So what is needed to achieve targeted improvements is close cooperation between all the disciplines involved in order to establish a basis for a realistic assessment and appropriate portfolio management.