Yes Home Insurance

Currently insurers reduce their risk exposure by trying to identify factors at an underwriting stage that suggest an increased risk of suicide.  Many insurance companies use a suicide exclusion as a deterrent to those motivated to buy mortgage protection because of suicidal thoughts.  Suicide exclusions are difficult to apply at claim stage because there is seldom incontestable proof that the deceased intended to kill themselves.

Earlier this year, reports review site Mortgage Protection Quotes, the US Centres for Disease Control and Prevention published a study that showed that showed that suicide rates among Americans of typical working age, 25 to 64 years, rose during economic contractions and fell during economic expansions.

The study considered economic and mortality data for the period 1928 to 2007.  An EU-wide study considered date from 26 countries between 1970 and 2007 and concluded that for every 1 per cent increase in unemployment there was a 0.79 per cent rise in suicides at ages younger than 65 years.  Many other studies into links between various economic indicators and suicide rates have been published over time and the recent ongoing economic turbulence has resulted in continued interest in this topic.

In 2009 suicide and possible suicide, as indicated by the codes “intentional self harm” and “events of undetermined intent” in the Office for National Statistics reports for England and Wales, accounted for 4.5 per cent of deaths at ages 25 to 64.  If we consider ages 25 to 39, this figure increases to 16 per cent.  Compared to other causes of death, suicide is a relatively rare event.  While not catastrophic, a significant increase in suicides can introduce additional claims costs for insurers.

Suicide remains a relatively rare event which is difficult to predict.  Insurers need to balance cost containment against reputation risks and ensuring that the underwriting process is sensible for the majority of customers.