Personalising life insurance

The life insurance industry has changed substantially over the past sixteen years. Advancements in technology, supported by Big Data analytics, the growing burden of non-communicable diseases and significant strides in medical research, have substantially changed the playing field.

These changes have given rise to a host of challenges and opportunities for life insurers. One particular innovation is the development of personalised medicine to manage certain chronic diseases.

A new era in medicine has just begun. Critical illnesses, for example, are being affected by advances and developments in technology and medicines.

Non-communicable diseases
The World Health Organization (WHO) has noted that the majority of deaths and disability cases worldwide are a result of chronic conditions. Chronic conditions, particularly non-communicable diseases, pose a large and growing health problem. These diseases include cardiovascular disease, type 2 diabetes, certain cancers, chronic lung disease and depression.

In 2004, a quarter of all deaths in the sub-Saharan Africa region were due to non-communicable diseases, and this is projected to increase to 46% by 2050.

Research reveals that 60% of mortality risk is driven by four lifestyle factors ? smoking, poor nutrition, physical inactivity, and alcohol use ? that fundamentally affect the way we approach the development of protection products.

An aging population also means that chronic diseases —such as cancer, diabetes and neurological diseases such as dementia — have become more prevalent. Personalised medicine could be applied to a wide range of chronic diseases.

The move to personalisation
Personalised medicine is a revolutionising way of separating patients into different groups or segments, based on their particular health situation. Medical professionals are then able target medicine at them more accurately in order to manage and treat their conditions more effectively. They are also able to tailor healthcare programmes for patients to help them manage their diseases.

It can also be used proactively as a way of avoiding certain conditions. This is accomplished by testing a person’s genes to find out which medical conditions they are likely to develop.

For example, if it is found that a person carries certain genes that are associated with type 2 diabetes, the individual can start making certain lifestyle changes to lessen their chances of getting this disease.

Traditionally, life insurers only measured a client’s risk once and then based all future premiums on the result. This resulted in clients paying a premium based on the average risk the insurer is covering. However, with dynamic underwriting, clients’ risk profiles are continually assessed to make sure their cover stays relevant and their premiums are in line with their risk.

Effectively, dynamic underwriting gives insurers the ability to gain more insights on how individuals are managing their health and wellness ? and passing substantial value back to them for staying healthy.

There are already a number of Managed Care programmes that have been developed for individuals who have specific chronic conditions or illnesses, such as diabetes, HIV and obesity. These programmes are tailored to support an individual’s health needs, enabling them to enjoy a personalised journey to better health.

This allows clients to link their Managed Care programmes to their life plans, providing them with dynamic underwriting and significant rewards for managing their conditions. Clients are able to reduce their health loading, meaning lower premiums based on the state of their health.

Personalised medicine will lead to more involvement of patients in managing their therapy and tracking their activities during and after treatment.

Reaping significant rewards
The result is that individuals who would have traditionally been considered a high risk now have the ability to get comprehensive life insurance, improve their health, and pay lower premiums over time.

Apart from the health benefits that clients receive from this, they can also get valuable financial rewards.