Mental health claims threaten insurers and employers by 2030

Zurich studied six markets, including Australia, Malaysia and the UK.

Mental health conditions are becoming a growing risk for insurers and employers, with rising claims, productivity losses and gaps in workforce participation expected to increase pressure on protection systems by 2030.

A report by Zurich Insurance Group found that mental health-related costs often fall outside formal healthcare and insurance systems, leaving individuals, families and employers to shoulder much of the burden.

The report analysed six markets — Australia, Chile, Germany, Malaysia, United Arab Emirates and UK — and projected that in some countries, around one in three working-age adults could be living with mental health conditions by 2030. 

Productivity losses linked to mental health could also approach 5% of GDP.

In Malaysia, more than 4 million people, or around 12% of the population, could be living with mental health conditions by 2030. 

Productivity losses are projected to reach RM34bn, equivalent to 1.4% of GDP.

Zurich said earlier intervention and rehabilitation support could help reduce long-term workforce disengagement. 

Alison Martin, CEO of Life, Health and Bank Distribution at Zurich, said around one-third of employees who receive early support through the insurer’s rehabilitation services are able to remain in work instead of leaving the workforce.

The report found that the largest economic impact comes from people leaving jobs or struggling to enter or return to the workforce, rather than from short-term sick leave. 

In Malaysia, people with mental health conditions are estimated to be 18% less likely to be employed than those without such conditions, with employment rates of 56% compared with 74%.

Mental health conditions are also expected to increase pressure on households through higher out-of-pocket healthcare costs. 

In Malaysia, 42% of treatment costs are projected to be paid directly by patients, whilst families and caregivers are expected to provide more than 123 million hours of unpaid mental health-related care by 2030.

The report estimated Malaysia’s total mental health-related expenditure could rise to nearly RM3bn by 2030, representing around 0.1% of GDP. 

Across the six markets studied, total wellbeing costs linked to mental health are projected to approach $1t annually.

Zurich said delayed treatment and limited access to professional care remain key challenges. 

The insurer noted that up to four in five Malaysians with a mental disorder may not be accessing professional support, increasing the likelihood that conditions worsen before treatment begins.