An expected rise in workers’ compensation mental health claims due to the COVID-19 pandemic, and greater focus on the issue during the outbreak, should act as a catalyst for improvements, Allianz says.

Claims costs relating to mental health, or primary psychological workers’ compensation claims, have already increased 80% since 2017, Allianz says. Benefits paid on average are also up to four times higher per year than for claims related to physical injuries.

“We sadly anticipate seeing a rise in workers’ compensation claims as a result of the COVID-19 pandemic, highlighting [that] it’s even more important for Australian workplaces to implement the required changes to tackle these challenges now, and work to prevent them in the future,” Chief General Manager of Workers Compensation Julie Mitchell said.

An Allianz report, titled Future Thriving Workplaces, says one in two managers surveyed now feel an increased responsibility for their employees’ mental health at work.

Some 47% of managers say there is a strong need for mental health initiatives in their industry and 55% state they, or their organisation, plan to implement changes within the next 12 months.

Ms Mitchell says nearly 75% of primary psychological claims lead to time off work, compared to only 50 per cent of physical injuries, and average recovery times exceed those for physical injuries.

“The longer duration nature of psychological injuries increases claim costs which flow through to employer premiums,” she told insuranceNEWS.com.au. “It should be noted that the larger cost increase has been seen within Allianz’s public sector portfolio within NSW, although there has also been a rise in claim costs driven by psychological injuries.”

The report is based on a July survey of 1005 workers and 501 managers spanning various industries, Allianz worker’s compensation data and information from Safe Work Australia.

“The challenge now is to bridge the gap between awareness of mental ill-health in the workplace and taking action,” Ms Mitchell said. “We can’t take a scatter-gun approach.”

Feedback for the report suggests stigma remains a key hurdle in making progress, with some four in ten surveyed employees feeling that mental health issues will not be taken as seriously as physical illnesses.

Allianz says detection of mental health issues before they escalate into psychological injuries is key and strategies and processes to address stressors is vital in the prevention of harm.

Issues that employees say have negatively influenced their mental health include ineffective or unfair management, workplace culture, bullying and harassment and organisational structures.