AIA New Zealand has made changes to its underwriting approach pertaining to customers’ mental ill-health disclosures when applying for income protection cover via its online platform, AIAHub.
The insurer introduced an expanded set of questions to better understand the nature and severity of any mental health conditions being disclosed, and, in some circumstances, provide straight-through processing, it said in a statement.
“With the growing maturity of automated underwriting and our ability to analyse data from many years of customer disclosures, we are pleased to have been able to review our previous approach of manual underwriting, and introduce some automation to better support customers with mental ill health,” said Sharron Botica, AIA NZ chief customer officer.
Previously, applications for AIA’s income protection product have been referred for manual underwriting when mental health issues are disclosed, regardless of the severity or type of mental health condition or the impact on a customer's individual circumstances. According to AIA, many insurers generally consider mental ill health as a disclosure that requires independent, third-party information such as a doctor's report, to ensure it can be accurately underwritten due its subjective or changing nature, which makes it difficult to assess.
“Mental ill health disclosures are never easy, and the revised question set will offer AIA NZ customers the chance to share their personal experiences, and allow our underwriters to only become more involved on those cases that require further consideration,” Botica said. “We believe it is important to recognise the disclosure and the type of mental health issue our customer is experiencing, or has experienced in the past.”
According to Botica, some more severe mental conditions will continue to be automatically referred for manual underwriting. However, milder conditions, such as those relatively transitory in nature or those which have minimal to no impact on daily work and activities, will no longer require the customer to provide additional medical information.
The 2018 He Ara Oranga Report into Mental Health and Addiction found that around 50% to 80% of New Zealanders will experience mental distress and/or addiction challenges in their lifetime. The Mental Health Foundation of New Zealand stated in a 2020 wellbeing study that a quarter of New Zealanders currently have poor levels of mental and emotional wellbeing, including nearly a third of women.
AIA NZ said it will continue to look closely at other underwriting considerations and disclosures, such as smoking status, alcohol consumption and BMI. Research has shown that these factors are all linked to poorer mental health outcomes.
“We know mental ill health is something affecting many New Zealanders, and we feel it is important that we find ways within our underwriting practices to be more inclusive,” Botica said.
“While we acknowledge there is more we can do to support these customers, we feel these changes are a positive step forward to providing cover, and the chance for customers to have their personal experiences understood more clearly.”
