Stress in the workplace: a global threat for insurers

Stress in the workplace has developed into a crisis over the last ten years.

People are suffering from an enormous workload at home and at work. A yoga class at the desk cannot compensate for the urge for short-term gains and a leadership focused on “ambition” rather than realistic expectations. Stress at home affects concentration and performance at work, which is the start of a vicious cycle.

As an insurer, we are observing a sharp rise in health insurance costs worldwide, a record number of occupational accidents and disability cases as well as premature deaths.

The insurance industry alone cannot solve stress-related illnesses, but it has a crucial role to play in systemic change. We face a critical challenge – and a great opportunity – to take a leading role in prevention and care.

Health insurance under pressure

Stress in the workplace contributes significantly to health expenditure. According to a cross-national analysis published by the Asia Care Group/Cigna Group in 2019 between 4 and 19 percent of total healthcare expenditure is attributable to stress-related illnesses. The study shows that 25 percent of hospital admissions, 35 percent of GP visits and 19 percent of emergency admissions are stress-related.

In the United States alone workplace stress is associated with 8% of national health expenditures (costing around 190 billion US dollars) and an estimated 120,000 deaths per year, according to a 2015 joint study by Harvard Business School and Stanford University.

Do you need more figures? The World Health Organization reports that 12 billion working days are lost every year due to depression and anxiety, resulting in an annual productivity loss of 1 trillion US dollars.

According to the health data report from LexisNexis Risk Solutions the use of psychological services increased by 83 percent between 2019 and 2023. The pandemic has affected us all, but above all it has revealed a dramatic crisis: 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 run the risk of excluding those who need help from the system.

That’s why we need effective, data-based measures to combat stress at source.

Rising compensation for accidents at work

A growing body of data points to a significantly higher increase in workers’ compensation claims for stress-related injuries. Over the last ten years, mental stress claims have risen faster than any other category.

In Australia, mental health claims continue to increase each year, accounting for 11% of serious claims in 2024 in 2024. In addition, the average time off work in these cases is more than five times than all injuries and illnesses combined.

Meanwhile, the Health and Safety Executive (HSE)reports that stress, depression or anxiety in the workplace is now the most common cause of work-related ill health, costing 16.4 million working days each year. While the average British employee is absent from work for 6.8 days due to an injury, stress, depression and anxiety account for an average of 21.1 days.

In the United States, more and more states are allowing “pure stress-related” compensation claims, particularly in cases involving first responders and those exposed to intense workplace trauma. In light of these policy developments, brokers can expect a continued rise in stress-related claims – and the resulting necessary adjustments to policy terms and conditions.

Several European countries have recognized burnout as an occupational phenomenon, which has led to an increase in workers’ compensation due to stress in the workplace.

Disability: A tidal wave of mental illnesses

Chronic stress and work-related mental illness have become one of the main causes of short and long-term disability insurance claims worldwide. Over the past decade, insurers and researchers have noted a sharp rise in disability claims due to mental illness (often triggered or exacerbated by stress at work).

Studies by the Organization for Economic Cooperation and Development show that in industrialized countries, one third to one half of all new disability pensions are claimed due to depression, anxiety or burnout, which are often caused by chronic stress in the workplace. Although OECD labor studies showed this trend as early as 2012, the pattern has continued or even worsened: among younger workers, almost three quarters of new disability pensions are due to mental health problems.

The figures are sobering. A report by the Geneva Association from 2023 estimates that 15 billion US dollars are paid in disability benefits for mental illness worldwide every year – and the trend is rising.

A report by the Chief Risk Officer Forum in 2021 found that mental illness is the leading cause of disability and early retirement in many countries. It also found that disability insurance claims due to mental illness have been rising for more than a decade.

In Canada, mental illness accounts for almost 30 percent of all disability cases. The number of mental illnesses rose by 70 percent between 2019 and 2022. percent between 2019 and 2022.

Death by overwork: the ultimate price

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

“The study concludes that a work week of 55 hours or more is associated with a 35% higher risk of stroke and a 17% higher risk of death from ischemic heart disease than a work week of 35 to 40 hours.“

In Japan, the phenomenon of “Karōshi” (death by overwork) has triggered hundreds of compensation claims every year for employees who the consequences of chronic workload have died as a result of chronic workload.

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

Aside from the human suffering, these statistics also show that there are huge opportunities for all stakeholders to work together to develop stronger workplace policies and practical measures to protect workers’ wellbeing.

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

Stress-related claims pose a particular diagnostic challenge due to the subjective nature of the symptoms.

On the one hand, both insurers and employers run the risk of becoming victims of fraudulent claims, exposing themselves to legal liability risks and reputational damage. On the other hand, suspicion must not overshadow the genuine needs of those who actually suffer from stress-related illnesses.

Opportunities in the crisis

What does this all mean for the insurance industry? It underlines that responding to stress in the workplace is no longer a “nice to have” but an economic and ethical necessity.

A growing number of experts are calling for holistic strategies that take into account workplace design, workload and sound psychological support. Employers who implement such measures often experience lower staff turnover, fewer claims and healthier, more resilient employees.

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 innovative, science-based and technology-enabled solutions. We need to move beyond speculation and invest in prevention by developing quantitative measures of stress – tools that enable employers and individuals to proactively identify, prevent and combat stress in the workplace.

Because what we can’t measure, we can’t manage.

Mirela Dimofte

Read also: Is mental illness a choice?