Mental health discrimination in the travel industry

Following the investigation, the Commission entered into an agreement with nib holdings (parent company of World Nomads Group) regarding the removal of travel insurance products that included discriminatory clauses. We confirm that, since this agreement was executed, nib holdings has now removed the clauses from its products and have accordingly met all requirements of the agreement.

Read more about our work with nib and download the final agreement.

In Fair-minded cover, the Commission made:

• 6 recommendations to the party insurers – nib-World Nomads Group (nib-WNG); Suncorp Group (Suncorp); Allianz Australia Insurance Ltd and AWP Australia Pty Ltd trading as Allianz Global Assistance (Allianz & AGA)
• 4 recommendations to Zurich (underwriter) – Cover-more (provider) (Zurich – Cover-More), who voluntarily assisted the investigation
• 2 recommendations to the Insurance Council of Australia and one recommendation to the Actuaries Institute.

In October 2020, the Commission checked in with the insurers, the Actuaries Institute and the Insurance Council of Australia for an update on progress made towards implementing the recommendations in the Fair-minded cover report. The insurers, the Actuaries Institute, and the Insurance Council of Australia provided their responses in October and November 2020.

In response to the Commission’s investigation, the insurers have stated that they have done a large amount of work to address discrimination in their policies, processes and practices, making travel insurance fairer and more accessible for everyone, including those with mental health conditions. For example, according to the insurers’ self-assessment, the following steps have been taken.

• All the insurers have removed the blanket mental health exclusion from their travel insurance policies. This means that since the Fair-minded cover report was released, tens of thousands of travellers have entered into fairer and better insurance contracts.
• Two of the insurers, Suncorp and nib-WNG, stated that they went a step further, in line with the Commission’s recommendation 3. They have contacted claimants denied indemnity or claims based on a mental health condition during the investigation period to notify them about the investigation and its outcome and reopened and made a payment to them for their claim. This is an important accountability measure and demonstrates a commitment to stamping out this kind of discrimination in the future. Recommendation 3 was not accepted by Allianz & AGA and the Commission did not direct recommendation 3 to Zurich.
• All the insurers have stated that they have developed strategies for complying with the Equal Opportunity Act. The strategies embed compliance with the Equal Opportunity Act into governance frameworks and include updates to policy wording and internal processes, where necessary.
• All the insurers have stated that they have taken positive steps to ensure actuarial data and statistics used in their screening process and for underwriting any policy terms are current, regularly updated and consistent with medical and technological developments. The increased role of current data in assessment and decision-making processes should lead to reduced discrimination in the sector.
• All insurers have stated that they have developed tailored education programs about anti-discrimination laws, with plans to roll them out to staff and senior leaders across the business. This will help staff and senior leadership to understand anti-discrimination laws and how they apply to their work. It will provide them with the knowledge and skills to implement the updated policies and processes in practice.
• All insurers have stated that they have developed (or are in the process of developing) risk profiles and coverage that they deem appropriate for different mental health conditions, meaning more people with mental health conditions can obtain appropriate coverage. This is a significant and important step in bringing the treatment of mental health conditions in line with physical health conditions.
• All the insurers have agreed to provide reasons to travel insurance customers refused cover or denied indemnity based on a mental health condition. Together with the reasons, insurers also state that they provide customers with clear and accessible information about internal review options and most also provide information about external review options. This transparency is an important means by which consumers can be informed of their rights.
• All insurers are getting involved in industry-wide efforts to combat discrimination, led by the Insurance Council of Australia and the Actuaries Institute. Cross-sector efforts to collaborate on tackling discrimination encourage insurers to comply with their positive duty.

Importantly, all the insurers have acknowledged that ongoing work is required to ensure compliance with the Equal Opportunity Act. The insurers have formally adopted a practice of conducting periodic reviews of key measures such as governance frameworks, policies, processes and data. Regular reviews are necessary to ensure ongoing compliance with the Equal Opportunity Act.

The Actuaries Institute and the Insurance Council of Australia have demonstrated a willingness to play a greater role in holding the travel insurance industry to account and supporting insurers to comply with their positive duty to eliminate discrimination as far as possible. The Actuaries Institute Anti-Discrimination Working Group and the Insurance Council of Australia’s update to its General Insurance Code of Conduct are good examples of this. The Commission also welcomes the Insurance Council of Australia’s decision to enable the Code Governance Committee to publish de-identified breach decisions and impose sanctions for significant breaches. The Commission encourages the Actuaries Institute and the Insurance Council of Australia to continue these efforts to ensure the progress made in the industry is built upon.

Read more about the insurer updates on progress made towards implementing the recommendations

The Commission would like to thank the insurers, the Actuaries Institute and the Insurance Council of Australia industry for their participation in the investigation and their responses about their progress in implementing the recommendations. These actions will make travel insurance fairer and more accessible for travellers with mental health conditions.