Berkshire Hathaway’s global reinsurance subsidiary, Gen Re, has announced plans to develop an insurance product for managing mental health issues, beginning in South Africa.
Gen Re, which operates in South Africa as General Reinsurance Africa Ltd., notes that mental health conditions are on of the leading causes of disability in the country, making up more than a quarter of both income and lump sum disability claims over the past five years.
This year, the issue has only been amplified by the COVID-19 pandemic, and yet the global re/insurance industry has largely been unwilling to engage with it, given the difficulties involved in assessing and managing mental health conditions.
However, by using principles similar to those used to develop cover for people living with HIV, Gen Re hopes to create a new framework for mental health cover with a foundation in behavioural economics research.
“The key paradigm shift is the departure from the pure biomedical approach, which offers little granularity in the assessment and management of the risk, to a biopsychosocial approach,” Gen Re explained.
A multifactor risk tool, developed by the Gen Re team, considers psychosocial factors, as well as selected questions from the self-efficacy scale, in the terms offered.
“This more holistic approach translates into improved underwriting decisions and better terms for people with less severe mental illness,” Gen Re added.
Gen Re’s Thea Weyers, who led-the Cape Town team responsible for developing the product, commented: “Research has shown that proactive and early intervention adopting the biopsychosocial approach across the mental health spectrum is a potential gamechanger.”
“The focus is on keeping people well, intervening quickly when a change is triggered and working hard at the in-claim stage with structured rehabilitation, supported with tool sets, such as our Gen Re-developed Depression Tool,” Weyers continued.
“Initial feedback from our recent CONNECT client event has been overwhelmingly positive and we are excited about working together with our clients to meet the specific needs of their customers.”