A proposed shift in the definition of obesity could have implications for life insurance underwriting, according to Swiss Re’s Rebecca Barwick (pictured above), head of life and health global underwriting and claims.
In what can be considered a turning point, the Lancet Diabetes & Endocrinology Commission has introduced a framework that moves beyond the traditional reliance on body mass index (BMI) as a sole indicator of obesity.
BMI, a calculation based on weight and height, has long been a standard measure in life insurance underwriting. However, Barwick noted that BMI alone can be an incomplete tool when used in isolation.
The new guidelines introduce two categories: pre-clinical obesity, where excess body fat is present without measurable health effects, and clinical obesity, where excess fat affects organ function, causes disease, or impairs daily life.
The framework recommends additional measures for assessing obesity risk, including waist circumference, waist-to-hip ratio, and metabolic health markers. These factors, according to Swiss Re, align more closely with its underwriting approach to cardiometabolic risks.
Life insurance companies have traditionally utilized BMI as a straightforward metric to assess an applicant's health and associated risks. BMI serves as an indicator of potential health issues, such as heart disease, diabetes, and hypertension, which can impact an individual's life expectancy.
For instance, insurers often classify applicants into categories – Preferred, Standard, and Substandard – based on their BMI and overall health profile, influencing premium rates accordingly.
While there have been significant regulatory changes concerning the use of genetic information in life insurance underwriting – such as Australia's decision to ban insurers from using genetic testing results to prevent discrimination – there have been no specific legal reforms addressing the use of BMI in underwriting practices.
Barwick said that BMI has been widely used in underwriting due to its simplicity, offering a quick and standardized method to classify risk, much like the World Health Organization’s BMI classification system. Higher BMI levels are typically associated with increased health and mortality risks.
However, BMI does not distinguish between muscle and fat, nor does it account for fat distribution or metabolic health. This limitation can lead to either overestimation or underestimation of risk, especially when broad age bands are used for classification.
Some insurers incorporate waist circumference as a supplementary metric to improve risk differentiation. Swiss Re supports using waist circumference and other metabolic health markers within its Life Guide tool, which Barwick said allows for more tailored underwriting outcomes.
The potential impact on underwriting remains uncertain. Barwick raised questions about whether waist-to-hip ratios should be included as an optional input in risk assessments or become a mandatory requirement.
She noted that such changes would need to be weighed against operational costs and the need to educate distribution channels on the benefits to consumers.
While BMI is likely to remain part of underwriting, Barwick suggested that its role as the primary measure of obesity risk may change. She pointed to advancements in wearable and phone technology that could help bridge the gap between medical records and self-reported weight, potentially leading to more accurate risk assessments.
Barwick encouraged underwriting leaders and product development teams to consider how these changes could benefit policyholders. Swiss Re’s Metabolic Health initiatives, which focus on improving insulin resistance, weight, and BMI, could support the development of new underwriting models.
She said these programs may allow insurers to expand their risk pools and offer lower premiums to individuals with high BMI or poor metabolic health if they demonstrate sustained health improvement.
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