Australian life insurers pay out on mental health claims at about the same rate as cases occur in the community, the Financial Services Council (FSC) says.

Mental health accounts for 20% of all life insurance disability claims – second only to accidents, according to preliminary industry data. Mental health conditions rank third in the top 10 causes of claims across all life insurance categories.

Population studies show 22% of all disabilities in the community relate to mental health conditions.

A four-year data aggregation project – run by KMPG and with 19 insurance company participants – details more than 102,000 claims on death policies, trauma, total and permanent disability, income protection, consumer credit insurance, funeral cover and accident insurance last financial year; 92% of these claims were paid in the first instance, amounting to about $10 billion.

“The life insurance sector has had no industry approach to the collection of aggregate industry data, which has been a major challenge and constant frustration,” FSC CEO Sally Loane says.

The FSC hopes to break down the data by gender, age and geographic location.

It is also working with the mental health sector on a research paper examining psychosocial factors, with implications for the industry in underwriting and claims management.