Occupational stress: a global threat for insurers

Occupational stress has developed into a crisis over the last decade.

People suffer from enormous workloads at home and at work. A yoga session at the desk cannot offset the urge for short-term gains and leadership that is focused on “ambition” rather than realistic expectations. Stress at home reduces concentration and performance at work, which is the start of a vicious cycle.

As an insurer, we are experiencing the drastic rise in healthcare costs, a record number of accident and disability claims and premature deaths worldwide.

The insurance industry alone cannot solve stress-related disruption, but it has a critical role to play in systemic change. We have an important challenge – and a profound opportunity – to lead in prevention and care.

Health insurance under pressure

Occupational stress is a major factor in healthcare expenditure. According to a 2019 analysis by Asia Care Group/Cigna Group, between 4 and 19 percent of total healthcare expenditure is associated with stress-related illnesses. The study shows that 25 percent of hospitalizations, 35 percent of GP visits and 19 percent of emergency room visits are stress-related.

In the US alone , occupational stress is associated with 8 percent of national healthcare spending (around USD 190 billion) and an estimated 120,000 deaths per year, according to a 2015 joint study by Harvard Business School and Stanford.

Need more numbers? The World Health Organization (WHO) reports that 12 billion working days are lost every year due to depression and anxiety, resulting in a loss of USD 1 trillion in annual productivity.

According to a health data report by LexisNexis Risk Solutions, there was an 83 percent increase in the use of mental health services between 2019 and 2023. Indeed, the pandemic has affected us all; however, it has revealed a dramatic crisis more than anything else – we are facing an unprecedented mental health crisis.

As a result, the insurance industry is faced with constantly rising premiums and loss ratios. However, continuous growth is not the solution – we risk excluding those who need care from the system.

That’s why we need effective, data-driven interventions that tackle stress at its source.

Rising number of occupational accident insurance claims

A growing body of data shows significantly higher workers’ compensation claims due to stress-related injuries. Over the past decade, psychological stress claims have risen faster than any other category.

In Australia, claims for mental health conditions are increasing every year, accounting for 11 percent of serious claims in 2024. Furthermore, the median incapacity to work in these cases is more than five times the measured incapacity to work for all injuries and illnesses.

Meanwhile, the UK Health and Safety Executive (HSE ) reports that occupational stress, depression or anxiety is now the most common cause of occupational ill health, causing 16.4 million lost working days each year. While the average UK worker is off work for 6.8 days with an injury, the average for stress, depression and anxiety is 21.1 days.

In the United States, more and more states are allowing “stress-only” workers’ compensation claims, particularly in cases involving first responders and individuals exposed to intense occupational trauma. As these policies evolve, brokers can expect a continued increase in stress-related claims and the necessary adjustments in underwriting policies.

Several European countries have begun to recognize burnout as an occupational phenomenon, which has led to an increase in work-related injury claims due to occupational stress.

Disability: a mental health tsunami

Chronic stress and work-related mental health conditions have become a leading driver of short- and long-term disability insurance claims worldwide. Over the past decade, insurers and researchers have seen a dramatic increase in disability claims attributed to mental health conditions (often triggered or exacerbated by occupational stress).

Studies by the Organization for Economic Co-operation and Development (OECD) show that in developed countries, one-third to one-half of all new disability claims are due to problems such as depression, anxiety or burnout, which are often rooted in chronic occupational stress. While OECD labor studies highlighted this trend back in 2012, the pattern has continued or worsened: among younger workers, almost ³/₄ of new disability claims are due to mental health problems.

The figures are staggering. A 2023 report by the Geneva Association estimates that USD 15 billion is spent annually worldwide in disability payments for mental health claims – and counting.

A 2021 report by the Chief Risk Officer Forum found that mental health conditions are the leading cause of disability and early ‘retirement’ in many countries. It also notes that disability insurance claims for mental health have been rising for more than a decade.

In Canada, mental health problems account for almost 30 percent of all disability claims. Mental health claims increased by 70 percent between 2019 and 2022.

Death by overwork: the ultimate price

Perhaps the most worrying indication of job stress is the cost in terms of premature deaths. A joint study by the World Health Organization (WHO) and the International Labour Organization (ILO) attributes 745,000 deaths worldwide from strokes and heart disease to long working hours in 2016 alone. This is an increase of 29% compared to 2000 in deaths due to overwork and chronic stress.

“The study concludes that working 55 or more hours per week is associated with an estimated 35 percent higher risk of stroke and a 17 percent higher risk of dying from coronary heart disease compared to working 35-40 hours per week.“

In Japan, the phenomenon of “karōshi” (death from overwork) has triggered hundreds of annual compensation claims for workers who die from fatal illnesses directly related to chronic occupational stress.

For life insurers, these figures are a cautionary reminder that occupational stress not only damages productivity, but can also tragically shorten lives.

Beyond the human suffering, these statistics highlight a huge opportunity for all stakeholders to work on stronger workplace policies and practical interventions that protect employee wellbeing.

The skeleton in the closet – the fine line between suffering and deceit

Stress-related claims present a unique diagnostic challenge due to the subjective nature of the symptoms.

On the one hand, both insurers and employers run the risk of falling victim to fraudulent claims, exposing them to legal liabilities and reputational damage. However, suspicion alone should not overshadow the genuine needs of those who really suffer from stress-related illnesses.

Opportunity in the crisis

What does this all mean for the insurance industry? It underlines that responding to occupational stress is no longer a ‘nice-to-have’ option – it’s an economic and ethical imperative.
A growing number of experts are calling for holistic strategies that incorporate workplace design, workload management and robust mental health support. Employers who implement these measures often experience reduced turnover, fewer claims and a healthier, more resilient workforce.

For us in the insurance and risk management industry, these trends are both a warning and an immense opportunity.

This is precisely why we need ground-breaking, science-based and technology-enabled solutions. We need to move beyond speculation and invest in prevention by creating quantitative measures of stress – tools that empower employers and individuals to proactively identify, prevent and combat occupational stress.

After all, we can’t manage what we can’t measure.

Mirela Dimofte

Read also: Is mental illness a choice?