Insurer seeing impacts of coronavirus on business owners

Saturday, 30 May 2020

Partners Life managing director Naomi Ballantyne says suicides can follow the failure of businesses.

Life insurance company Partners Life expects a rise in suicide claims as a result of businesses failing in the economic downturn caused by the Covid-19.

Managing director Naomi Ballantyne's claim linking suicides directly to business closures has been challenged by mental health experts, who point out that suicides do not result from a single event.

The Covid-19 economic crisis was putting unprecedented pressure on businesses and their owners, and there had been predictions the pandemic could result in a rise in self-harm.

Police Assistant Commissioner Sandy Venables said in May there was no official data released yet, and numbers of mental health callouts appeared to be steady, with no big spike or decline. A death is not declared a suicide in New Zealand until a coroner has ruled it is one. Statistics are published annually.

Chief Coroner Judge Deborah Marshall said the provisional trend suggested the suicide rate was lower during the Alert Level 4 period than the 33 days prior to it (22 February – 25 March 2020).

'The suicide rate during Alert Level 4 was also lower than the rate for the same period from 2008 to 2020.'

Business failure could have an intense emotional impact on individuals, and business failures were sometimes implicated as a factor contributing to owners' sudden deaths.

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Insomnia can be a sign ot an impending mental health crisis for individuals.

Medical journal The Lancet said in April that while there were suggestions suicide rates would rise due to the impact of Covid-19, this was not inevitable.

It said loss of employment and financial factors were risk-factors for suicide, but Governments should provide financial safety nets. New Zealand businesses have been paid billions in wage subsidies, with a further $3.2 billion allocated in the Budget. The Government has also introduced weekly payments of $490 for laid off workers.

In desperation, people sometimes convinced themselves that their families would be better off with a payout on their life insurance policies than with them remaining alive, Ballantyne said.

'When it hits the hardest, they honestly convince themselves their families would be better with the money than with them. That's what they convince themselves of, which is so sad,' Ballantyne said.

'Suicide rates for life insurance are not high. We don't have a huge volume of claims as a result of suicide,' she said.

'But business failure is one of the triggers, and as a result of that, we are anticipating that we will have a higher rate of suicide rates as a result of this process.'

Dr Sarah Fortune, chairwoman of the Suicide Mortality Review Committee, said the reasons behind a death by suicide are complex and involve many layers.

'Although it may sometimes appear to be triggered by a single distressing event, in reality suicide is influenced by many risk factors, which often compound over a lifetime. These can include their social interactions (separation, lack of connection), physical (drug and alcohol, chronic pain, adverse childhood experiences), poverty, and cultural, economic, and environmental factors.'

She said most of these factors appeared in the lives of those who have died by suicide in New Zealand, across all ethnicities.

The life insurance industry remained financially strong, and like banks had provided options for policyholders under financial pressure to take premium holidays, or temporarily suspend policies without cancelling them.

So far Partners Life had not seen mass cancellations of policies, Ballantyne said, but many policy holders had applied for, and been granted premium holidays as a result of drops in their incomes caused by the economic downturn caused by Covid-19.

So far, Partners Life had processed 4500 premium holiday claims.

Partners Life had not seen a big claim in redundancy claims.

'We don't have a lot of redundancy covers because it's an expensive benefit to buy … so most customers don't buy it,' Ballantyne said.

'The vast majority of our premium holiday claims were a loss of income or a bankruptcy, not a redundancy,' she said.

That's about 35 times higher than pre-Covid-19 levels.

'That 4500 customers we are still supporting because it is up to six months. We don't know how long we will be supporting them,' she said.

'The first wave of mass redundancies has gone, but we do know there will be a steady increase in redundancies over time,' she said.

Other impacts on life insurers from lockdown were a drop in accident and disability claims, and a temporary postponement of health insurance claims.

When lockdown began, Partners Life stopped providing any new disability cover for mental illness preventing them from working.

That had now been lifted, but the insurer was now asking more questions of applicants at assess risk individually.

'In order to remove the blanket exclusions for everybody, we have added to the questionnaires so we can get a feel for the emergent financial and mental health situations for customers.'

Our main risk is what's coming. It's the depression, it's the stress, which takes time to manifest to the point that it becomes disabling.'

'All of those things are coming, and I think they will start to manifest in the next month, or so,' she said.

Partners Life had not returned to providing new redundancy cover, however.

'Redundancy is just too high risk,' Ballantyne said.

While the life insurance industry was well capitalised to pay claims, Ballantyne said, but sales of new policies were down.

Partners Life had made no redundancies like other life insurers, and hoped not to, Ballantyne said.

'Our intent is to hold onto every job.'

'We put on hold bonuses and salary increases for people who had had their anniversaries immediately,' she said.

If needed salaries would be cut before Partners Life considered cutting jobs.

But, she said: 'We are not out of the woods as an industry.'

Partners continued to do business during lockdown. The most technologically advanced insurance advisers continued selling new policies to clients, while the half of advisers who had not embraced technology before the lockdown did not business at all.

'It was a game of two halves. It was fascinating to watch,' Ballantyne said.

WHERE TO GET HELP

If you, or someone you know is feeling overwhelmed, counsellors are available 24/7:

– 0800 LIFELINE (0800 54 33 54) or free text HELP (4357)

– Suicide Crisis Helpline: 0508 TAUTOKO (0508 82 88 65)

– Kidsline: 0800 54 37 54

– Youthline: 0800 376 633 or free text 234.

If it's an emergency, please phone 111.

This article, including its headline, has been updated to reflect concerns raised by mental health experts about the complexities of identifying the causes of suicide