Mr Minto, who is the group executive of TAL and an executive officer at Japanese parent company Dai-ichi Life, told InvestorDaily that mental health is “as big an issue for retail [life] insurance as it for group insurance”.
He pointed to the disability claims in the United States as an example.
“Fifty per cent of these claims are attributable to psychological or stress-related issues. This is a global issue – it’s not just in the group insurance market,” Mr Minto said.
The difference between the group and retail markets is that there tends to be much larger sums insured via retail insurance, he said.
An analysis of the APRA quarterly statistics over the last five years for the income protection and disability markets makes for sobering reading, Mr Minto said.
“You’ll find that income protection’s basically made no money in the last five years,” he said.
Life insurance policies in both markets – retail and group – will become “dearer and dearer” as mental health claims continue to become a societal norm, Mr Minto said.
In response to rising premiums, consumers are becoming more dynamic in their decision-making when it comes to life insurance, he said.
“Customers are not buying and ‘setting and forgetting’ life policies. They’re buying and actively managing them,” Mr Minto said.
“Therefore that has to have an effect on policy design and how we price and design policies for the future. It’s going to be different,” he said.
In the group market, superannuation funds are in the process of “significantly changing” their product design, member eligibility criteria and automatic acceptance limits, Mr Minto said.
“Those changes are coming through – you can see it in the major super fund announcements,” he said.
