Life insurers are continuing to pay out more for mental health related claims, as Australians take longer to return to work, according to new analysis by international professional services firm KPMG and the Financial Services Council.
Their five-year study on life insurance claims shows that over the period, the number of claim benefits paid for mental health conditions has doubled.
The analysis revealed claims paid due to mental health are now 53% higher than they were in 2013, with a 125% increase in the incidence of claims amongst men due to mental health.
Overall, Australian life insurance companies are paying out record amounts in disability claims, reported Financial Standard. Accidents top the list of causes for disability insurance claims at 38%, with musculoskeletal (18%), mental disorders (11%) and cancer 10% rounding out the top four.
KPMG actuarial partner Briallen Cummings said the increase in mental health claim pay-outs was notable despite the increase across the board. Rather than an increase in mental health pay-outs being due to an increase in the incidence of claims, it is the length of time involved in each claim which has caused the spike.
"Total claims benefits for mental health conditions have more than doubled in the past five years. More people are now focusing on their mental well-being, which we see in people taking longer to return to work after a mental health event," Mr Cummings said.
While most causes of claims see average claimants return to work after 12 months, claims for mental health stretch out to 18 months.
FSC chief executive Sally Loane said the data project is designed to help steer the local life insurance industry towards sustainable and affordable disability income insurance.
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