Traumatic pandemic effects will erode productivity in insurance industry

Nadine Rix, Governance, Risk & Compliance lead, IQbusiness and Andrew Lee, Head of Insurance, IQbusiness

In a recent pilot study, South Africa’s leading management and technology consulting firm, IQbusiness, revealed that over 66% of office-based employees surveyed in our country are experiencing extreme stress, anxiety and depression, following the global outbreak of Covid-19.

If this is true for the average office worker, how might these results differ when the same survey is applied to the experiences of staff members who form part of our frontline workers within the insurance industry? Those working within Life, Funeral and Medical Aid industries have been exposed to the trauma experienced by thousands of bereaved insured families. These employees are required to manage the claims of multiple bereaved families, who have all suffered extreme loss, every single day. This is in addition to any loss or trauma they may be experiencing in their personal lives.

There can be no doubt that South African employees in the insurance space have been exposed to our nation’s cumulative trauma. Within the Life Insurance industry, we’ve seen a 60% uptick in the number of claims due to Covid-19 deaths in a single year alone. Our local insurance industry will have to consider the impact this trauma might have on the sector as traumatised employees inevitably begin to experience the impact.

It would be unethical to expect these staff members to manage, or even just cope, with overcoming the trauma that has been experienced and shared with them through their daily interactions with bereaved families as they work in this particular space.

We will have to measure and urgently manage the trauma experienced by insurance industry employees if we do not want to find our local insurance industry in crisis. Trauma can lead to several mental health disorders, while stress alone can be the cause of depression as well as other health conditions, including an increased risk of heart attacks, hypertension and panic attacks.

These stressors and mental health issues can also affect the general emotional wellbeing and behaviour of employees, creating an increased risk of negative and damaging conduct in the workplace.

The impact that trauma can have on a company and its employees comes hand in hand with a severe impact on the economy as well. According to the World Health Organisation, depression and anxiety disorders alone have an estimated cost to the global economy of US$1 trillion per year (approximately R14.9 trillion) in lost productivity.

Immediate risks to businesses on these issues would include absenteeism, decreased productivity and a lack of engagement.

But the good news is that there are solutions.

Through our Employee Trauma Toll (ETT), we are able to gather immediate insights into the trauma that has been absorbed by employees – and develop a proactive strategy to repair and manage the effects in the industry. The ETT can help insurers as employers deepen organisational resilience by directly measuring how their workforce is coping and the level of trauma they have or are experiencing. The ETT is further able to evaluate if existing risk mitigation plans, controls and support programmes are delivering for those who need them most.

This is one valuable, practical step that insurance companies can take to achieve organisational resilience.

The COVID-19 pandemic has shown us how resilient South Africans are,  but the human emotional cost is mounting and our businesses in the insurance space must take a proactive approach to address the cumulative trauma their employees have had to endure – or they will run the risk of lost productivity, absenteeism, high attrition rates, and overall low employee morale.