Obesity is a growing concern for insurers

A recent survey by pharmaceutical company GlaxoSmithKline shows that six out of ten South Africans are clinically overweight or obese – defined as having a body mass index (BMI) in excess of 30. The proven link between obesity and dread disease is great cause for concern.

Obesity has major health repercussions for both the general and insured populations because it increases the risk of developing a variety of conditions and diseases. An obese person is more at risk to heart disease, diabetes, arthritis, liver disease, bone fractures and various types of cancer. The greater likelihood of morbidity and death make obesity an important consideration when assessing insurance risk.

Life insurance companies are already suffering the effects of obesity-related illness. Clearly there is a need for underwriters and actuaries to ensure that the risks posed by the condition are accurately assessed and rated.

BMI is one of the most commonly used obesity measures because it is easy to calculate. Its main drawback is that it takes no account of body fat distribution. The presence of fat around the waist, for example, has long been recognised as a strong predictor of increased mortality and morbidity.

Many experts now believe that waist circumference and hip-to-waist-ratio provide better estimates of risk than BMI alone. A waist circumference exceeding 94cm in men denotes moderately increased health risk, while 102cm-plus waists indicate greatly increased risk. The equivalent values for females are 80cm and 88cm.

Applications for life insurance routinely collect information on build by recording height and weight and then calculating BMI from these measurements. At present underwriters deciding upon policy terms will need to take into account the BMI of the applicant along with other evidence gathered

Gathering information about waist circumference provides the underwriter with a better picture of an individual’s build risk. This measure is an integral part of assessing weight distribution and can be used to assist in identifying individuals at increased risk of mortality or morbidity.

It is also central to identifying individuals who fulfil the definition of metabolic syndrome, thereby recognising the increased risk they bring to the assured pool. This is particularly important in the context of critical illness policies due to the increased risk of Type II Diabetes and the associated circulatory claims that may follow.

The problem is that some insurers don’t consider loading premiums until BMI exceeds 40, a measure termed morbidly obese. This practice needs to change. Based on scientific and medical evidence clients with a higher BMI will have to be loaded at BMI levels that were previously ignored.

As an industry, we need to be more proactive with regards the on-going health of our policyholders. As the key interface between client and insurer, brokers can offer valuable information in this regard.

In the event your client receives an unfavourable rating you can encourage them to reconsider their lifestyles to reduce obesity risks and hopefully improve their life cover premiums. There are clear and significant health benefits associated with weight loss too.

Studies show that shedding 10kg of excess weight can improve mortality rates significantly. Subjects show a 20% decrease in mortality, 30% decrease in diabetes related death and 40% decrease in obesity-related cancer deaths. Both blood pressure and cholesterol levels improve significantly too. The same weight loss results in a decrease of 10 mmHg systolic and 20 mmHg diastolic (blood pressure) as well as a decrease of 10% in total cholesterol.

Your client can take steps to improve their mortality risk rating. After they make a genuine commitment to a few simple lifestyle changes you can arrange for a review of their application and hopefully deliver a better premium.