ATLANTA--(BUSINESS WIRE)--More than 90 percent of underwriters are concerned about the potential impact that opioid addiction will have on mortality of the insured population, according to a recent survey by Munich Re, one of the world’s leading reinsurers. The survey of life insurance professionals was conducted at the Association of Home Office Underwriters (AHOU) Annual Conference, held in San Diego, California in April 2017.
Of the 126 underwriters surveyed, nearly two-thirds (63 percent) reported that over the last year they have seen an increase in the number of insurance applicants with a history of opioid use. Further, more than half (56 percent) reported that they most often see a medical history of opioid use among applicants ages 35 – 54 years, while only 20 percent reported that they most often see a medical history of opioid use among applicants ages 55 years and older. This result is unexpected as it is generally held that individuals ages 55 years and older are more likely to have taken opioids for pain.
More than half (53 percent) of the underwriters surveyed reported that the life insurance companies they work for do not currently test for opioids. Although the vast majority of underwriters surveyed expressed concern about the potential impact of opioid abuse on mortality, only half (50 percent) expect their companies to make any changes to their testing practices.
“As the industry is facing one of the worst drug addiction epidemics in American history, it’s apparent that there is a disconnect between the effect this will have on mortality, and the likelihood of life insurance companies to change their underwriting policies,” said Bill Moore, vice president of underwriting and medical for Munich Re, US (Life).
Only 8 percent of respondents said their company will test for opioids regardless of the policy size. 21 percent responded that their companies test for opioids for policies over $1 million, and a further 8 percent responded that their companies test at policy thresholds ranging from $100,000 to $1 million.
“For life insurance companies, changing policies can appear to be an uphill battle, as it is likely to involve additional expenses for testing, discussions with marketing, or even internal concerns over timing of the approval process,” Moore continued. “However, we do have the tools and resources at our disposal to begin to detect risky behaviors or signs of abuse among policy holders, in the hopes that this may help in addressing the greater problem.”
Among those surveyed, 89 percent observed that pharmacy databases could be useful when screening for chronic opioid use, as they have the potential to shed light on frequent prescription refills, or for multiple prescriptions from multiple doctors.
The survey was conducted on site at the Association of Home Office Underwriters (AHOU) 16th Annual Conference in San Diego, California from April 2-3 2017, and is intended to represent the views of 126 underwriter attendees, primarily from life insurance companies, who participated in the in-person interviews.
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Munich American Reassurance Company—Munich Re, U.S. (Life), founded in 1959, is one of the largest reinsurers in the U.S. offering life and disability reinsurance to insurance companies throughout the United States. The company also writes group, credit and other reinsurance products. Headquartered in Atlanta, with offices in Chicago and New York, the company is licensed, accredited or authorized in all fifty states; Washington, D.C.; Guam; and Puerto Rico.
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2016, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €2.6bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €28bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in ERGO, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2016, ERGO posted premium income of €16.0bn. Munich Re’s global investments (excluding insurance-related investments) amounting to €219bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
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