Underwriting diabetes: sufficient for the future?

01 February 2008 Dr Peter Bond, Old Mutual

The life insurance industry is facing a rapidly increasing burden: diabetes. But will the manner in which insurance underwriting addresses this condition at present be sufficient for the future?

The global obesity pandemic has reached such proportions that it is estimated that the present worldwide number of 170 million type 2 diabetics will increase to 350 million by 2025. And together with this will come an increase in the myriad of cardiovascular complications associated with diabetes.

Diabetics can be divided into two distinct groups, Type 1 and Type 2. Despite both being called diabetes, they are completely different ailments.

Understanding the disease

Type 1 diabetics are usually younger people of normal weight who develop a sudden severe illness with failure of the pancreas to produce insulin. They require insulin replacement therapy right from the start. Very seldom is it accompanied by the risk factors mentioned above such as hypertension.

Type 2 diabetes is a completely different kettle of fish. It takes a long time to develop and is present an average of 7 years before a diagnosis is made. It occurs as a result of poor quality insulin that is better known as insulin resistance. It is common in older obese patients and is very commonly associated with the above risk factors. There is an increasing school of thought that type 2 diabetes should not be seen as a separate disease but as an additional risk factor to those associated with obesity.

In other words, an additional risk factor for the development of cardiovascular disease.

Underwriting procedures

Traditionally, underwriters have called for a standard medical report, an electrocardiogram, a questionnaire regarding the diabetes and some blood tests to gauge the severity of the diabetes and how well it is being treated.

This has shortcomings since this information can only really inform the underwriter of what has transpired in the previous 6-8 weeks of treatment. Therefore, risk assessment is fairly rudimentary and, I believe, exposes companies to significant medium and long-term risk. Likewise, it throws all diabetics into the same basket and those patients who take particular care of their illness are being considered according to the same parameters as those who are less compliant with treatment.

More accurate assessment

A much fairer and much more accurate measure of the risk of diabetes is to test for the presence of microalbuminuria (MAU). This is a simple test on the urine that is a valuable predictor of cardiovascular disease. Those diabetics who do not have MAU present are much better risks than those who do. The MAU test is not inconvenient for the client and can be performed on the urine sample provided for standard medical examination.

Also in South Africa we are fortunate to have the Centre for Diabetes Excellence (CDE). This is a group of clinics that specialise in diabetes care and who painstakingly keep accurate records of their patients. A second proposal then is to create a special supplementary questionnaire that asks for more relevant detail over the duration of the diabetes to enable the underwriter to assess the risk more accurately.

The outcome will be a more accurate assessment of the risk posed by diabetes for the industry and a much fairer individual assessment particularly for those who take the time and effort to manage their disease.

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