"As an industry, we need to give customers confidence that disclosure will not automatically result in higher premiums or declined cover."
- Emma Hickey - IFoA
A new report from the Institute and Faculty of Actuaries (IFoA) has found that 49% of UK adults have experienced mental health challenges, but interacting with financial services providers such as insurers, banks and utility providers can still be a source of significant stress for many.
The report, The anxiety of access: bridging the gap between mental health and financial services, based on a consumer survey of more than 2,000 UK adults and conducted in collaboration with YouGov, considers consumer perceptions and lived experiences when dealing with financial services providers while experiencing, or having previously experienced, a mental health condition.
The report identifies three widespread issues: the first is that people do not feel safe being transparent, as 79% of customers believe that sharing mental health information with insurers will lead to higher costs and 65% fear declined cover. IFoA says that this creates a lack of trust and leads to non-disclosure of mental health conditions.
Secondly, while the majority of respondents felt supported when claiming, they also identified multiple opportunities to improve the claims experience, suggesting that current processes do not yet fully meet the needs of vulnerable customers.
Thirdly, 66% of respondents find routine interactions stressful, with a strong preference for digital, flexible channels over phone-based communication.
In regard to insurers, the report says that the industry has an opportunity to redefine the trust contract with consumers.
The report suggests building transparency into underwriting to reduce fear and encourage disclosure of conditions; prioritising dignity and reasonable adjustments over speed of response in claims; closing the accessibility gap through multi-channel, flexible communication, and protocols that mean customers do not need to keep repeating details of mental health conditions.
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"When we began exploring mental health in the context of disability insurance, we wanted to understand how people experience interacting with financial services while managing a mental health condition," Emma Hickey of the IFoA Mental Health Working Party, said.
"This report highlights that non-disclosure is largely a rational, defensive behaviour. As an industry, we need to give customers confidence that disclosure will not automatically result in higher premiums or declined cover.
"The same principles apply in claims. Taking the time to communicate in the ways people need can transform often stressful interactions into supportive experiences.
"If we design systems around trust, empathy and accessibility, we will better serve vulnerable customers and strengthen the perception of the industry as a whole."
Paul Sweeting FIA C.Act, president of IFoA, added: "Being able to access financial services is a vital part of our day-to-day lives, but when people feel excluded by the way the system is set up, this leads to imbalances across society. I encourage actuaries and those working in the financial services industry to act on the measures outlined in this report to protect, empower and reassure customers."
