LIFESTYLE (MEDIUM IMPACT, 1-3 YEARS)
1. Over the last century, tremendous advances in modern medicine have improved the quality and length of our lives and raised standards of living in many parts of the world. Now, however, we are in danger of becoming victims of our own success. Healthcare costs are becoming unsustainable, due largely to a chronic disease epidemic fuelled by unhealthy lifestyles and ageing populations. Increasingly, early death is less of an economic concern than decades spent alive and sick.
2. Chronic diseases are often directly driven by behaviours such as unhealthy diet, sedentary lifestyles, weight gain, smoking (which is still on the rise in many developing countries) and failing to adhere to treatment regimens. Obesity, for instance, is associated with chronic diseases such as diabetes, heart disease, hypertension and some forms of cancer. It is estimated that the number of overweight and obese people may double to 3.3 billion by 2030.
3. The growing prevalence of obesity and other life-style related health impairments suggests that mortality figures of existing, in-force life business could differ from expectations in the future. Furthermore, a rising number of chronic disease sufferers will drive up health-care costs and thus affect health insurers.
2. Chronic diseases are often directly driven by behaviours such as unhealthy diet, sedentary lifestyles, weight gain, smoking (which is still on the rise in many developing countries) and failing to adhere to treatment regimens. Obesity, for instance, is associated with chronic diseases such as diabetes, heart disease, hypertension and some forms of cancer. It is estimated that the number of overweight and obese people may double to 3.3 billion by 2030.
3. The growing prevalence of obesity and other life-style related health impairments suggests that mortality figures of existing, in-force life business could differ from expectations in the future. Furthermore, a rising number of chronic disease sufferers will drive up health-care costs and thus affect health insurers.
NEW INFECTIOUS DISEASES (MEDIUM IMPACT, 1-3YEARS)
1. New advances in science and medicine have helped us gain ground against certain infectious diseases, yet even in the twenty-first century other contagious illnesses continue to emerge at a rapid pace. Emerging infectious diseases (EID) comprise those illnesses whose incidence in humans has increased in a defined time period and location. This includes new or unrecognised diseases, those that are spreading to new geographic areas and hosts, as well as those that are re-emerging.
2. Recent cases include Dengue fever and West Nile fever. Dengue fever is a mosquito borne viral illness that causes severe flu-like symptoms. The global incidence of dengue has grown to significant proportions in recent years, with two-fifths of the world’s population potentially at risk. West Nile fever is another a mosquito-borne viral illness that can show up with varying seriousness, ranging from no symptoms at all to mild flu-like symptoms and even to brain damage and death. It appeared in the US for the first time in 1999 and has by now caused an estimated four million infections (albeit most without symptoms).
2. Recent cases include Dengue fever and West Nile fever. Dengue fever is a mosquito borne viral illness that causes severe flu-like symptoms. The global incidence of dengue has grown to significant proportions in recent years, with two-fifths of the world’s population potentially at risk. West Nile fever is another a mosquito-borne viral illness that can show up with varying seriousness, ranging from no symptoms at all to mild flu-like symptoms and even to brain damage and death. It appeared in the US for the first time in 1999 and has by now caused an estimated four million infections (albeit most without symptoms).
3. EID are largely a product of societal-based decisions, demographic changes and climatic developments. The threat of naturally occurring EID is compounded by factors such as the increased mobility of humans, an increased import and export of food products, and a potential deliberate use of pathogenic micro-organisms or toxins for hostile purposes.
4. EID could impact the loss estimates of Life&Health insurers and – in severe cases – may lead to mortality shocks.
DRUG RESISTANCE (MEDIUM IMPACT, 4-10 YEARS)
1. Until recently, there has been very little focus on the threat from antibiotic-resistant bacteria. There is, however, evidence which suggests a growing resistance of bacteria and parasitic worms to known medication due to its misuse and/or overuse; this phenomenon may result in incurable diseases.
2. Yet there still seems to be a general belief that antibiotics will always be available. However, this is a fallacy: With every usage of antibiotics, small numbers of bacteria resistant to the specific drug survive – and the more antibiotics are used, the more antibiotic resistant bacteria prevail. This development is especially troubling given the slowdown in the discoveries of new antibiotics. Even though new antibiotics have come to the market, they have been based on old discoveries, and the drug pipeline seems to be drying up. This is the result of regulatory restrictions, a smaller return potential compared to medication for chronic illnesses and the aggressive pursuit of new life science technologies such as genomics or synthetic biology.
3. Increasing drug resistance may bring higher than anticipated losses under L&H covers, but also under product liability policies (e.g. defence costs related to claims involving the food or health-care industry).
2. Yet there still seems to be a general belief that antibiotics will always be available. However, this is a fallacy: With every usage of antibiotics, small numbers of bacteria resistant to the specific drug survive – and the more antibiotics are used, the more antibiotic resistant bacteria prevail. This development is especially troubling given the slowdown in the discoveries of new antibiotics. Even though new antibiotics have come to the market, they have been based on old discoveries, and the drug pipeline seems to be drying up. This is the result of regulatory restrictions, a smaller return potential compared to medication for chronic illnesses and the aggressive pursuit of new life science technologies such as genomics or synthetic biology.
3. Increasing drug resistance may bring higher than anticipated losses under L&H covers, but also under product liability policies (e.g. defence costs related to claims involving the food or health-care industry).
FUTURE MEDICINE (MEDIUM IMPACT, 4-10 YEARS)
1. Due to rapid technological and scientific advancements, individuals increasingly have the ability to assess their own health status as a growing number of ‘self-check kits‘ becomes available.
2. Furthermore, a rapid expansion in the development of new diagnosis tools and new treatment options such as biological therapies, gene therapies and nano-medicine continues to improve diagnosis and treatment of many diseases.
3. Personalised medicine – drug development based on tailoring drugs to patients based on genetic profiles – is also on the rise. It is expected to increase the safety and efficacy of drugs in the long run, but will also decrease the market size of blockbusters.
4. Health self-assessment kits could be a source of risk for life and health insurance products due to information asymmetries, particularly in territories where data protection legislation is well developed and customers are not obliged to disclose test results. New diagnostic tools could present a risk to critical-illness and medical insurance by increasing the incidence of diagnosed cases, and new treatment options may increase claims costs for medical insurance due to increased per-unit treatment costs. On the other hand, these developments could improve the general health of the population, reducing healthcare costs and further prolonging life.
(Source: SwissRe)
