AIA NZ underwriting improvements to support mental health

AIA NZ has taken a positive step forward to support customers to ‘tell their own story’ of mental ill health when applying for insurance cover.

Improvements have been made to the insurer’s underwriting approach to mental ill health disclosures for Income Protection cover, via its online platform AIAHub. These changes include 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.

AIA NZ Chief Customer Officer Sharron Botica says, “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.”

Historically applications for Income Protection have been referred for manual underwriting when mental health issues are disclosed, irrespective of the severity or type of mental health condition or the impact on a customer's individual circumstances. Across the market, mental ill health is considered 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,” says Sharron. “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.”

“While there are some more severe mental ill health conditions that will continue to be automatically referred, some milder conditions such as those relatively transitory in nature, or those which have minimal or no impact on daily work and activities, will – in the majority of cases – no longer require additional medical information to be provided,” Sharron says.

According to the 2018 He Ara Oranga Report into Mental Health and Addiction, over 50–80% of New Zealanders will experience mental distress or addiction challenges (or both), in their lifetime*. AIA NZ’s charity partner, the Mental Health Foundation of New Zealand, stated in their 2020 Wellbeing study that a quarter of New Zealanders currently have poor levels of mental and emotional wellbeing, including nearly a third of women. 

“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. 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,” Sharron says

AIA NZ will continue to look closely at other underwriting considerations and disclosures, such as smoking status, alcohol consumption and BMI which research shows are all drivers of poorer mental health outcomes.

“At AIA our dream is for New Zealand to become one of the healthiest and best protected nations in the world. We believe we have a responsibility as New Zealand’s largest life insurer to move away from simply being a payer of claims, to partner with New Zealanders to support their mental wellbeing and help them lead Healthier, Longer, Better Lives.”