There’s no denying that life has changed since the arrival of COVID-19. Virus transmission and illness still remain a concern, and the pandemic has forced people who’ve lost loved ones and close friends to face their own mortality.
Layoffs and furloughs have hit people hard and daily routines have been upended with adjustments to working from home and online school.
Now more than ever, it only takes one child care crisis or missed appointment to trigger our anxiety. According to a Swiss Re study, 45% of Americans are more concerned about their mental health than they were before the pandemic, and over half believe this concern will linger after the crisis has passed. While younger people are more likely to say they’ve always been concerned about their mental health — irrespective of external events, and older age groups are more likely to say mental health is not a concern, the increase is consistent across all age groups.
Mental well being is a key driver of our overall health, as are physical activity, sleep, nutrition, substance abuse, and our environment. We call them The Big Six Lifestyle Factors, and they’re all interconnected. For example, the amount and quality of sleep you get can affect your physical activity and food choices. What’s more, nutrition is often correlated with mental wellbeing in that some people eat more when they’re depressed and eating more compounds their depression — becoming a vicious cycle.
Mental health, in particular, warrants more serious attention in our increasingly uncertain world. And, for their part, insurers need to acquire a better understanding of mental health and undertake innovation and investment.
The Underwriting Imperative
At Swiss Re, we’re striving to be at the forefront of understanding these risks.
It starts with better informed underwriting. Until now, life insurers have relied on data such as age, build, and blood pressure to evaluate applicants, but mental wellbeing and other lifestyle factors (e.g. nutrition, activity, sleep) open up a world of alternative data to support underwriting. Besides physical characteristics, what if we could know more about an applicant’s lifestyle? Of course, mental health can be a mix of comorbidity risks, which can make assessing mental health conditions seem more formidable.
But it’s not impossible. As more alternative data sources emerge, the task of assessing risk becomes less daunting. In addition, improved application questions will help determine comorbidity risk factors, ensuring increased granular risk assessment, a more transparent claims process, which, potentially, could form the basis for more targeted and fewer exclusions.
Understanding human behavior can also reap rewards. Sometimes all it takes is a few small steps to make a big difference. Besides the impact of mental health on one’s ability to function, the stigma of it can also be paralyzing.