Investigation uncovers widespread mental health discrimination in travel insurance industry

Travel insurance policy document with paperwork and technology. There is an image of a tourist resort with cocktails and a swimming pool which adds to the peace of mind concept. There is also a mobile phone, map, digital tablet and calculator. Image featured on the brochure can be found in my portfolio 20943516
By Christian Fleetwood


An investigation into Australia’s travel insurance industry has uncovered widespread mental health discrimination, forcing several major players to change their policies.

An eight-month investigation by the Victorian Equal Opportunity and Human Rights Commission found Australian travel insurers sold more than 365,000 policies containing terms that discriminated against people with mental health conditions, with Allianz, Suncorp and World Nomads Group among the culprits.

This comes after the financial services royal commission last year discovered that Allianz had mislead its travel insurance customers by housing deceptive and incorrect information on its websites as far back as 2012.

“Australians are avid travellers … Being able to access insurance equitably is an important part of travelling. We found that for many people with mental health conditions, travel insurance was either not available or could not be claimed,” Victorian Equal Opportunity and Human Rights commissioner Kristen Hilton said.

The commission’s Fair-minded cover report details the findings of the investigation that looked at several Australian insurers, including three companies that represent around 37 per cent of Australia’s travel insurance industry – Allianz, Suncorp and World Nomads Group.

The report found that each of the three insurers had discriminated unlawfully against people with mental health conditions.

“Their policies included a blanket exclusion, which meant that people who experienced mental health conditions weren’t covered,” Hilton said.

“They also didn’t adequately recognise different types of mental health conditions and their risk or severity.”

Under the Equal Opportunity Act, an exception that might have allowed insurers to limit insurance is if the provider has adequate statistical data or reasons to support their approach. None of those investigated were able to adequately explain this to the investigation, according to the commission.

Hilton said the investigation was an important step in reducing discrimination in the community.

“It’s a catalyst for change.”

As a result of the investigation, all insurers that took part have either removed or taken steps to remove blanket mental health exclusions from their travel insurance policies.

The insurers have also agreed to address the commission’s recommendations, including in relation to the way they “offer and indemnify pre-existing mental health conditions”.

“When deciding how to insure people with mental health conditions, insurers need to think beyond their bottom line. Not every mental health condition is the same – insurers need to account for differences between them,” Hilton said.

Here’s a summary of the Victorian Equal Opportunity and Human Rights Commission’s recommendations, as found in its Fair-minded cover report:

  • All insurers who participated in the Investigation should develop a strategy for compliance with the Equal Opportunity Act
  • Allianz, Suncorp and WNG should apply rigorous actuarial analysis to the policy terms they use to offer or exclude travel insurance cover to people with a mental health condition (having regard to the DDA Guidelines)
  • Allianz, Suncorp and WNG should contact claimants denied indemnity or claims based on a mental health condition during the Investigation Period to notify them about the Investigation and its outcomes
  • All insurers who participated in the Investigation should provide their staff with regular education and training on anti-discrimination law
  • All insurers who participated in the Investigation should develop risk profiles and appropriate coverage for different mental health conditions
  • All insurers who participated in the Investigation should provide clear reasons to travel insurance customers for refusing to offer cover or deny indemnity based on a mental health condition
  • The Actuaries Institute and the Insurance Council of Australia should facilitate education on anti-discrimination law for actuary members and insurers respectively
  • The Insurance Council of Australia should incorporate its Guidance on Mental Health in its revised Code of Conduct to ensure that it is mandatory and enforceable.

 

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