Mental health ‘a natural catastrophe’

By Resolve Editor Kate Tilley

Mental health should be described as a pandemic, says Zurich’s head of casualty and specialty lines, Robin Cooper-Driver.

He told the AILA Qld Insurance Intensive that Covid-19 is “one of the biggest natural catastrophes for humanity”. Federal health data showed that, in 2021, 2,226 people died of Covid and the Australian statistics “are low compared to other countries”.

“But in the same year, 3,144 people committed suicide, so surely mental health is a pandemic, too. In the 15-24 age group, it’s the largest killer.

“When insurers talk about sustainability, I think this will catch us before global warming does.”

Mr Cooper-Driver said insurers were not always able to manage mental health claims and it was a big underlying issue in many personal injury claims.

Claims costs rising

The cost of managing mental health claims was rising and 9% of workers’ compensation claims were pure mental health claims.

Workers’ compensation insurers could make a difference by getting injured people back to work quickly. “Good insurers find ways to screen for mental health and connect people so they feel ready, able and capable of getting back to work.” 

In wide-reaching presentation on long-tail claims, Mr Cooper-Driver said inflation was a critical concern. “Claims are costing more and we need to strengthen our loss pick.”

Finity Consulting’s 2023 insurance industry report showed the market was improving, but Mr Cooper-Driver said it was “still uncertain”.

“We had a big tailwind with motor, because we’re all on the road more than we were before Covid-19.

“In stand-alone liability, we’re still dealing with 1950-1960s issues. We have to strengthen reserves to pay for old losses. Financial lines are running strong. We still see a lot of class actions, including securities class actions, but most settle.”

Abuse claims pressure point

Worker-to-worker claims for subcontractors and labour hire were a “big challenge” for workers’ compensation insurers, having accelerated in the last few years. He anticipated narrower cover and higher deductibles for worker-to-worker claims.

Mr Cooper-Driver said silicosis claims would likely be another challenge for workers’ compensation insurers. “We haven’t seen claims yet but will start setting aside reserves.” He anticipates the “first cab off the rank” with claims will be Queensland.

Insurers were also concerned about silent cyber – cyber-related losses stemming from policies not specifically designed to cover cyber risk. “We’ve seen litigation in the US. Insurers only want to pay claims that were intended under the policy.”

Abuse claims were “a pressure point” because liability policies in the 1960s, 1970s and 1980s “covered everything” and the statute of limitations was removed.

Asked whether abuse claimants should be able to access perpetrators’ superannuation to have claims paid, Mr Cooper-Driver said: “Yes, please. But that’s my emotional view as a parent.”