Understanding the impact of mental health on claims

The COVID-19 pandemic has created an unprecedented global health crisis.

While no one is immune to the potential exposure to the virus, the psychological impact alone is mounting due to ongoing social restrictions, changes to working conditions and a pervading sense of uncertainty that life will ever return to ‘normal’.

PANDEMIC CONSEQUENCES

While it is too early to assess the extent of its impact on mental wellbeing, the pandemic may have significant consequences for mental health claims in months and years to come.

This is a focus of an upcoming ANZIIF webinar, Mental health claims arising from COVID-19 — emerging trends, presented by Angela Brookes, a partner at Hall&Wilcox in Brisbane.

‘My presentation will focus on the mental health ramifications of COVID-19 and how these mental health issues can trigger a multitude of claims,’ says Brookes.

‘I want the audience to appreciate the emerging claims trends and also the industries that are going to be most impacted.’

STRESS, ANXIETY AND DEPRESSION

Recent research led by Jill Newby from the University of New South Wales and the Black Dog Institute found that the rates of psychological distress, anxiety and depression symptoms rose among adults during the peak of the pandemic outbreak in Australia.

The research included a survey of 5,070 Australians and found that 78 per cent of participants reported that their mental health had worsened during the outbreak.

One in four (25.9 per cent) were very worried about becoming infected with the virus, and one in two (52.7 per cent) were concerned their friends and family would become infected.

Almost half were worried about loneliness, financial troubles, and uncertainty. Psychological distress levels were higher, with 62 per cent, 50 per cent, and 64 per cent of participants reporting raised levels of depression, anxiety, and stress, respectively.

QUARANTINE HITS HARD

A resource from the Black Dog Institute shows that being placed in quarantine can have long-term negative psychological effects, including depression, post-traumatic stress disorder symptoms, confusion, anger, boredom and loneliness.

It also shows that unemployed and casualised workforces are at increased risk of poorer mental health during times of economic instability and during pandemics, and that health care workers (including nurses, doctors and auxiliary staff) have been found to have high levels of anxiety during previous pandemics.

Brookes says that in addition to front-line health workers, the education and training sector may see an increase in mental health claims as a result of COVID-19.

‘There’s already been an increase by the education department with respect to workers making mental health claims related to COVID-19,’ she says.

‘That’s not only those that have been directly impacted by contracting COVID but also it appears teachers have reported considerable stress and anxiety having to work on site.’

MENTAL HEALTH CLAIMS ON THE RISE

Data from Safe Work Australia shows 7,200 Australians are compensated for work-related mental health conditions each year and approximately $543 million is paid in related workers’ compensation.

In addition, statistics from the Financial Services Council shows that mental health-related total and permanent disability (TPD) claims accounted for 24.1 per cent of claims paid in 2018.

Brookes says that while it is too early to tell how significantly COVID-19 will impact mental health claims, she notes that mental health claims are generally on the rise.

‘In my opinion, there will be a rise in mental health claims due to COVID-19, with research from national surveys confirming that mental health problems were at least twice as prevalent in pandemic circumstances than in non pandemic circumstances,’ says Brookes.

‘The first confirmed COVID-19 case in Australia was identified in January, so it’s too early to know the extent of its impact, but I think we’ll see a lift in life insurance claims and disability claims, for instance.’

INSURANCE AND WELLBEING

Brookes’ interest in insurance law began while working at legal firm DibbsBarker, where she focused on statutory insurance as well as product and public liability claims.

Brookes comes from a family of medical and health professionals and this fostered an interest in health and wellbeing from an early age.

‘At university, I studied an Arts and Law double degree and one of my majors was psychology,’ she says. ‘I also used to work as a workplace relations advisor at the Australian Medical Association, so I think this all links in to my interest in mental health.’

In 2018, Brookes joined Hall&Wilcox as a partner and acts on behalf of state, national and international insurers, self-insurers, and Australian and international corporations.

Her role has also included drafting codes of practice and occupational health and safety policies for large organisations.

BEING CONSCIOUS OF MENTAL HEALTH

Brookes says from a claims perspective, insurers should be conscious of those who may already have a predisposition to mental health issues.

‘For example, disability claims, workers' comp claims and claims where people have sustained physical injury, but may also have a secondary psychological injury,’ she says.

‘Insurers should be acutely conscious of the impact of the pandemic in general as well as the impact that it has on psychological injuries and what you could do to assist.’

IMPACT ON STAFF

Brookes adds that employers in general should not underestimate how the restrictions of COVID-19 are affecting their workers.

‘In many cases, face-to-face communication has been lost and people are having to adjust to working purely online,’ she says.

‘Employers really need to consider how they are managing remote workers and ensure that they have very good lines of communication in place to help promote wellbeing.’

OPENING THE DISCUSSION

The pandemic’s toll on mental health – and mental health claims, remains to be seen, but Brookes says it’s important to start considering the future impact.

‘There's going to be so much more research on mental health to draw on in the coming months and years, but what I plan to do during the ANZIIF webinar is to open a discussion,’ she says.

‘The pandemic has helped everyone to appreciate that mental health is so important and, if you let that go, claims will just inevitably rise.’