Kathmandu. Mental health problems are becoming one of the biggest threats faced by insurance companies and employers worldwide. Rising insurance claims, significant productivity losses, and a widening gap in workforce participation are projected to put pressure on insurance systems by 2030.
According to a recent report by the Zurich Insurance Group, these challenges extend beyond formal healthcare and insurance frameworks. As a result, most individuals, families and businesses carry an unequal share of the burden.
The study examined 6 different markets – Australia, Chile, Germany, Malaysia, the United Arab Emirates (UAE) and the United Kingdom (UK). The report reveals worrying trends that could change the insurance and employment environment in the coming years.
Estimates suggest that nearly one in three working-age adults in these many countries will experience mental health problems by 2030. This increase is expected to push the productivity deficit in some economies to as much as 5 percent of GDP. It highlights the significant economic impact of untreated or poorly managed mental health problems.
The report estimates that more than 4 million people, or about 12 per cent of the population, will experience mental health problems in Malaysia by the end of this decade. The country’s corresponding productivity deficit is estimated to reach 34 billion Malaysian ringgit. This represents about 1.4 percent of GDP.
These figures highlight the growing scale of the problem in Southeast Asia. Where rapid social change, work pressures and limited access to care can exacerbate the prevalence and impact of mental health challenges.
The report stresses that the greatest economic costs will come not only from short-term absences, but also from long-term withdrawals from the workforce. For example, people may quit their jobs altogether or experience difficulties entering or returning to work.
In Malaysia, for example, people with mental health problems are 18% less likely to find a job than those without a job. The employment rate is 56 percent compared to 74 percent. This gap reduces economic participation and puts further pressure on social support systems.
Zurich Insurance Group advocates early intervention and strong rehabilitation support as necessary measures to reduce these risks. Alison Martin, CEO of Life, Health and Bank Distribution in Zurich, said: “Timely support can make a significant difference. “About a third of employees who receive initial assistance through an insurance company’s rehabilitation service are able to stay at work rather than leave the workforce altogether,” she said. Such approaches can help reduce chronic loneliness and improve both personal well-being and professional continuity. ’
In addition to impacting the workforce, mental health conditions are also expected to increase financial pressure on households. In Malaysia, 42 percent of the cost of treatment is expected to be covered directly by payment directly from Khalti. Families and caregivers could face more than 123 million hours of unpaid mental health services by 2030.
Malaysia’s total mental health spending is expected to reach around 3 billion Malaysian ringgit by the end of this decade. That’s about 0.1 percent of GDP.
In the six markets studied, the total cost of mental health-related well-being could reach $1 trillion annually. This reflects the global scale of this challenge.
Access to professional care remains a major barrier in many areas. “Four out of five Malaysians with mental disorders may not be seeking or receiving professional support,” the report said. Which often worsens the situation and increases the long-term costs. Delayed treatment not only affects personal health but also increases the overall burden on insurance companies through complex and costly claims over time.
For insurance companies and employers, these developments indicate the need to adapt quickly to change. Older insurance models may need to be modified to better include preventative mental health support, early intervention programs, and comprehensive rehabilitation services. Employers, in particular, can benefit from partnering with insurance companies to create integrated solutions that prioritize mental well-being, foster a workplace environment, offer employee assistance programs, and address both prevention and recovery.
As mental health awareness continues to grow globally, the insurance industry faces both risks and opportunities. By addressing these challenges through new products, partnerships with healthcare providers, and a data-driven approach to risk management, insurance companies can play a critical role in supporting a healthier and stronger workforce. However, customers can also reduce their ability to adopt. – Agency
