Innovating claims processes with AI in the face of rising mental health claims in Australia

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A tidal wave of mental health conditions is driving a sharp rise income protection claims

Imagine a young professional in her early 30s, working tirelessly to build her career, but also struggling with anxiety. She’s not alone. Across Australia, the USA, and the UK, countless individuals are turning to income protection insurance as a lifeline when mental health challenges make it impossible to work. Behind every statistic is a deeply personal story of someone facing the toll of conditions like depression, anxiety, and stress-related disorders.

Recent data reveals just how much mental health is reshaping the landscape of income protection claims. AIA Australia reported a staggering 72% increase in claims related to mental health since 2019, making it the leading cause of their income protection payouts.

For many policyholders, this support has become a crucial safety net during their most vulnerable moments. The trend extends across age groups, with 30- to 40-year-olds in Australia seeing a dramatic 732% rise in total and permanent disability claims for mental health over the past decade. These numbers reflect an urgent need for compassion and action, as real people navigate the challenges of balancing their health, careers, and financial stability.

In the UK, the Association of British Insurers (ABI) published statistics in 2024 showing that mental illness claims accounted for the highest value of all individual income protection claims in 2023.* Aviva, one of the UK’s largest life and health insurers, said mental health was one of the leading causes of income protection claims it paid out in 2023, representing more than 23% of total claims.*

Mental health conditions pose unique challenges to insurers and their claims teams

The rise in these types of claims add both quantity and complexity to the claims team’s caseload. As a result key success metrics like claims duration, resolution, and customer satisfaction for these claims organizations are under pressure.

“Mental health conditions, especially anxiety and depression, often come with complexities that extend far beyond the symptoms themselves,” says Dr. Gabbay, EvolutionIQ’s Clinical Technology Director, “In the context of income protection, the stigma around mental health, the variability in treatment effectiveness, and the unpredictable timelines for recovery make it a unique challenge for insurers. Claims professionals need a nuanced understanding of these dynamics to navigate the intersection of medical, psychological, and occupational factors in claims management.”

Standard processes for managing claims do not accommodate the idiosyncrasies of mental health related claims leading to longer return-to-work timelines, increased time spent reviewing claims documentation, and a poorer claimant experience.

The role of AI-powered claims solutions in delivering claims excellence

AI-powered claims guidance solutions enable claims professionals to spend more time engaging with customers with more complex claims, and offer more personalised claims journeys. 

First, claims guidance solutions analyze historical insurer data to identify likely outcomes for different claims. This information is used to recommend which claims an examiner should work at any given time, ensuring that claimants receive attention on their case when it is most likely to support their return to work. 

Second, these solutions also go a step further to recommend what actions would be most likely to lead to positive worker outcomes. This can include recommending the involvement of specialists as is often the case in mental health related conditions. This improves the customer experience by ensuring that each claimant gets the right support at the right time.  

Throughout the lifecycle of a claim, examiners are directed to a claim at critical moments, and are able to understand the most important facts of a case. Then through intelligent recommendations they are able to support claimants with the right care. The examiner is firmly in the driver’s seat at all times, not outsourcing their experience and human touch to AI, but instead leveraging technology to deliver higher touch, more personalized support.

EvolutionIQ is the leading provider of claims guidance solutions for income protection

Across the US, the rapid adoption of claims guidance technology has been a major factor for EvolutionIQ’s growing client list across disability and property & casualty Insurers. 

At the Insurtech Insights conference in New York, Mike Estep, President of Prudential’s Group Insurance Division, and Brad Rothenberg, Vice President of CNA’s Claim Transformation & Technology Division provided compelling examples of how EvolutionIQ has changed their claims operations.

They discussed how staff were empowered to pinpoint high-opportunity claims earlier for tailored support, in turn expediting the process to help workers recover and return to work sooner.

The future of claims journeys in Australia

In an age where Australian consumers can compare claims experiences and speed of payments across different insurers, the efficiency and quality of claim handling in each provider is increasingly important. At the same time, the rise of mental health associated claims makes the need to introduce improved claims processes for these complex cases essential. 

EvolutionIQ’s solutions empower staff to excel in their roles, and to work on the claims that require more compassionate levels of support for sick and injured people looking to return to work. The technology enables claims leaders to optimise operations and free up employees’ time to provide services with the highest value. This doesn’t mean scaling back headcount, it means scaling up the quality of the claims experience - the moment of truth for any insurer.

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About EvolutionIQ

EvolutionIQ, an affiliate of CCC Intelligent Solutions Inc,pioneered Claims Guidance in 2019. Its explainable AI guides insurance claims professionals to their highest potential impact on claims, including specific Next Best Action guidance. EvolutionIQ improves the claimant experience and delivers better claim outcomes to claimants, carriers, and their customers. EvolutionIQ serves group disability, individual disability, and workers’ compensation markets worldwide. The New York-based company employs nearly 200 staff across the United States, Europe, and Australia. For more information, visit evolutioniq.com and follow the company on LinkedIn.

ENDS

*IA Australia CEO partners with Australians for Mental Health, advocating for transformative government action in response to mental health crisis | AIA Australia

**More Australians forced to leave work for good over their mental health and at a younger age, new landmark report shows - CALI

***Protection insurers pay out record £7.34 billion to support individuals and families | ABI

****Departments of Labor, Health and Human Services, Treasury Issue Final Rules Strengthening Access to Mental Health, Substance Use Disorder Benefits | HHS.gov

*****Mental health: supporting people, protecting income - Aviva

******Mental Illness - National Institute of Mental Health (NIMH)

*******Spending on Mental Health Services Has Risen by More Than Half Since Beginning of Pandemic | RAND

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