Reinsurers putting pressure on Life Insurers over vaping health risks

There are a number of global reinsurers putting pressure on underwriters to charge certain people who vape even more than they charge smokers, or to exclude them all together from getting cover. This is following that announcement that there were 47 vape related deaths in the US last year and global research is indicating that vaping is not good.

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Reinsurers Pressure Life Insurers Over Vaping Health Risks

According to this article "Global reinsurers are stepping up their warnings to life insurer clients about the potential risks of vaping, putting pressure on underwriters to charge certain vapers higher rates than smokers, or even exclude them altogether."

This is a direct consequence of dozens of cases of lung disease in young people in the United States, apparently linked to vaping. The lack of sufficient objective data is a concern. Initially, indications were that vaping, if adopted by smokers, showed a dramatic reduction in disease rates. But it now seems that quality problems, and adoption by young, formerly non-smokers, could mean that vaping results in an increase in harm. Only time will tell. 

A price on your head: determining the value of a 'life'

Reinsurance Group of America are asking 'How much is life worth?' The article goes on to say 'From a strictly fiscal perspective, however, determining a person’s long-term financial value is exactly what financial underwriting in life insurance seeks to do.' Click here to read more. They have their approach, and, frankly, I dispute the idea that they are determining a person's long-term financial value. They are determining insurable value. The interest that I have in my life is clearly unlimited. The care that others show for that life is limited. The difference is the measure of risk in our society. Insurance is an attempt to bridge the gap a little - by allowing for financial risk transfer so that some of my future value to my family, and the folks I borrow money from, can be replaced should I die. But provocative titles get clicks, and most of us are here for commercial reasons, so I understand.

Different approaches to establishing the value of a life can offer good tools for the professional adviser, life insurance marketer, and would-be digital advice designer. Finding simple ways to get the consumer to think about what they should insure and for how much are central to those roles. Especially since we know that, typically, most consumers a) don't like thinking about really bad news like death and disablement, and b) don't like doing maths.

Given that knowledge here are some uncommon suggestions for talking about values for insurance:

  1. Use the Government's number: "You are worth 3.35million to the government, how much of that do you have insured?" Using a report issued a little while ago by New Zealand Transport you can check out the value of a statistical life. Now, this isn't going to be a match with most reinsurer's views of the insurable amount for most lives. I didn't expect it. But it is a useful challenge to the majority of people currently buying $200,000 life cover and no income protection.
  2. Ask "If someone took away every physical ability, but left you alive, how much compensation should we sue for?" This is not a ridiculous question - I wish that it was. Each year some people left totally and permanently disabled - for sake of argument, think of quadriplegia. They have to be compensated. There is also a method in the madness. Fewer people are suffering early death (before age 65) and people find it easier to think about the consequences if you keep them in the picture.

    In New Zealand ACC handles the payments to the person, but in the UK private settlements must be made. An example is available at this link - it suggests GBP 1.5 million to GBP 3.5 million pounds. Arguably, ranging from the current level in the question above to about two and a half times more. It also handily underlines the problem of projecting costs, and therefore compensation, over a lifetime. The answers, after a bit of stammering, will probably amount to more than the person can afford, so the budget window then becomes the main determining factor. With luck, you have have pried open the budget just a little bit.

Of course, there are perils with over-insuring your life. These are well known, and you can rely, to some extent, on insurers to protect you: they share your concern, as over-insured lives don't live as long, and become bad claims disputes when they are murdered. But it is also rare, and the balance of probabilities is that your cover is low - particularly your income protection insurance.





How 3D Printing is Changing Medical Treatment

Ross Campbell wrote this article on Gen Re website about how 3D printing is making a change in the medical industry.

'It’s not so surprising that solid objects made from printed plastic or titanium, such as replacement hip joints or dental implants, can be made by 3D printers. More remarkable is that new human tissue might be printed from bio-ink comprising of droplets of living cells, stem cells and other biomaterials to replace or support an existing biological structure - a process known as regenerative medicine.'

Gen Re on Critical Illness Policy Wording Standardisation

Gen Re has this article on critical illness definition standardisation, for an Asian perspective. It includes some commentary on the UK experience as well. One gets the feeling that Gen Re is a supporter of standardisation, talking up the benefits of consumer confidence. That was supported by the UK's experience. However, the ability to vary 'above' standards would be a minimum, for me, otherwise, it squashes competition and experimentation. 

RGA Quantified Wellness Summary

Reinsurance Group of America has published the Quantified Wellness - Wearable Technology Usage and Market Summary here with this extract "Each year, 36 million people worldwide die from diseases that are largely the result of lifestyle choices and behavior. At the same time, wearable technology and medical devices are becoming more common, and their capabilities are expanding beyond simply tracking a person’s movement to include heart rate and sleep monitoring. This research compares the capabilities of many health and fitness devices that will play a role in insurance program offerings."