GLP-1 drugs, like Ozempic and Wegovy, have surged in popularity, primarily due to their effectiveness in managing type 2 diabetes and facilitating significant weight loss. Originally developed for blood sugar control, these medications have not only gained social media buzz but have also become increasingly appealing to individuals seeking both health benefits and improved lifestyle choices.
As the usage of GLP-1 medications continues to grow, life and health insurance sectors are starting to explore their potential effects on underwriting practices. Although the landscape is still developing, according to Neil Sprackling (pictured), CEO, life and health US, Swiss Re, early indications suggest that GLP-1 drugs could favourably impact risk assessments. This evolving understanding may prompt insurers to rethink how these medications are integrated into policy pricing and risk evaluation.
GLP-1 drugs have the potential to mitigate the effects of obesity, significantly improving policyholders' health and subsequently enhancing insurance outcomes. For instance, healthier individuals generally present lower risks to insurers, which could result in potentially lower premiums for those who can demonstrate effective use of GLP-1 medications.
“I'm going to put a positive, optimistic hat on and say, I believe this is where we will end up. These [medications] are good things for the life insurance and health insurance industries. Most importantly, the end consumer will benefit,” said Sprackling.
As GLP-1 drugs become widely integrated into insurance policies, brokers will have a unique opportunity to offer tailored products for clients using these medications. This shift could help brokers attract and retain a new customer segment, providing enhanced coverage options and greater value. Additionally, brokers may eventually begin to explore cross-selling opportunities with other health-related insurance products, such as critical illness or wellness plans, further expanding their offerings and deepening client relationships.
Sprackling noted that while GLP-1 drugs are likely here to stay, it’s still “too early” to fully gauge their impact on exact underwriting practices. “We’re in a very early stage of understanding the effects of these drugs over the medium and long term. We haven’t got 10 years of data yet,” he emphasized.
However, this developing landscape offers another key opportunity for brokers: by staying ahead of emerging trends in GLP-1 drugs, brokers can gain a competitive edge, positioning themselves as trusted experts to address client questions as these medications become increasingly integrated into life and health insurance policies.
For Sprackling, the key to consumers benefiting from GLP-1 medications is responsible use rather than viewing them as a quick fix. “Taking a pill for the rest of your life and assuming you’re going to lose weight is not the solution,” he noted.
According to Sprackling, as the industry evolves, insurers may become more focused on supporting policyholders using GLP-1 medications in making healthier lifestyle choices. Reflecting on traditional life insurance models, he pointed out how static the approach is: consumers take out a policy that remains active for 20 to 30 years with little to no interaction from the insurer until a claim arises.
Now, the industry is rethinking ways to engage with policyholders “and provide positive intervention to help them live a happy life,” said Sprackling. “Most insurers would love to find a way that we can create an ongoing relationship with the consumer,” he added.
Sprackling pointed to emerging wellness programs where insurers reward policyholders for healthy habits, like regular gym visits or data-tracked activity through devices like the Apple Watch. Expanding this approach to GLP-1 drugs could mean incorporating similar health monitoring, such as tracking glucose levels, to encourage healthier lifestyles among policyholders using these medications.
By leveraging the increasing popularity of GLP-1 drugs and the potential for better health outcomes, brokers can initiate conversations with clients about proactive health management, fostering a stronger sense of partnership and involvement.
“If you’re an average consumer, you have a vested interest in leading a healthier life and living as long as possible—and so does the insurer. Everyone’s on the same side of the fence. The incentives at that level are beautifully aligned,” Sprackling confirmed.
