PETALING JAYA: The lack of a sizeable market is a key reason that many insurance companies in the country have yet to provide mental health insurance, says an actuary.
Yoon Yew Khuen, a former Bank Negara insurance development director, said although society had been making progress on mental health awareness, it was still not at a stage where insurance buyers were willing to pay an extra premium for coverage.
“People are still reluctant to talk about mental health issues, let alone seek help,” Yoon said at a Malaysian Mental Health Association forum.
“(When) it becomes an established and normal part of life, when there is an addressable market, insurers will serve the market because there is money to be made.”
Yoon, who is also a former chief risk officer at an insurance company, said the other key challenge insurers faced was the lack of quantifiable measurements.
Unlike physical illnesses, mental health conditions could not be captured by diagnostic imaging or biological markers and this made underwriting challenging.
“A lot of diagnoses were (based on) subjective self-reporting and clinical assessment with some level of subjectivity,” he said.
He also said there was insufficient detailed data on mental health problems to properly design an insurance product.
“There’s definitely a demand (for insurance coverage) among advocates of better mental wellbeing but for the overall population there is some way to go.
“When insurers put a product out in the market, they need to see if it moves sales. That is the commercial reality,” he said.
Yoon saw companies as a possible catalyst for the growth of mental health insurance as it would be in their business interest to provide such coverage for employees.
He also said many financial institutions wanted to demonstrate that they were contributing to positive social outcomes and were adopting environmental, social and governance criteria, hence could be open to promoting mental health insurance.
Source: https://www.freemalaysiatoday.com/category/highlight/2022/10/25/small-market-a-stumbling-block-for-mental-health-insurance/