Life/Health Chief Underwriter, Research & Development, London
Millions
have benefitted from the cushion Critical Illness (CI) products provide to
financial hardship linked to a cancer diagnosis, stroke or heart attack. CI has
also been rewarding for providers, not just by helping them remain relevant but
by also enabling them to play the social role of insurance - helping people
when faced with adversity. However, CI is facing pressure due to advances in
disease diagnostics and treatment.
In
heart attack diagnosis, a shift occurred when the primary test for cardiac
muscle damage (the enzyme CK-MB) was replaced by a much more sensitive marker
(troponin) that allows even tiny amounts of cellular damage to be identified
and treated. The debate over just what level of troponin was diagnostic of a
heart attack was protracted and caused significant confusion within the
industry.
Heart
attack is just one example of diagnostic shift - advances in the methods used
by clinicians to detect disease. The shift may progress dramatically in a
stepwise fashion, as with troponin, or be consistently linear.
A
linear diagnostic shift is underway for cancer. Liquid biopsy (CTC or ctDNA)
technology will slowly replace tissue sampling by histopathology as the gold
standard in cancer diagnostics. That means cancer will be detected more often
and at a much earlier stage than today.
While
advances in diagnostic shifts will lead to higher incidence rates as more
people are diagnosed earlier and more often, therapeutic gains are also playing
a role. Medical interventions are more effective. Genetic innovation is already
transforming discoveries about DNA into life-saving treatments. Genetic data
will soon be integral to clinical treatment as more people have cheap tests and
their predictive power grows.
When
sharper tools allow diagnoses of earlier and more minor disease, the
definitions used in CI contracts are weakened. The product’s concept to provide
financial support only when life is threatened by severe disease is reduced.
This creates pricing uncertainty.
The
rapid progress in diagnostic shifts and therapeutic gains make detailing the
covered conditions definitions more challenging. Insurers risk being out of
step with medicine as they are continually forced to repair gaps in policy
wordings with subsidiary clauses. This undermines pricing, reserving and even
the promise to pay.
The
enduring concept of CI relies somewhat on the assumption a claimant has cheated
death. Many more people are finding that modern techniques help them to recover
sufficiently to challenge that assumption. That is good news. Tiered and
reviewable CI products play to this scenario extremely well. Ultimately though,
these medical advances can’t help but call into question the long-term
viability of guaranteed CI products in their current form.
But
new therapeutics and the increased role of genomics in day-to-day medicine
allow insurers to tailor services much better to peoples’ needs. This could
prompt a third generation of CI products that sees insurers shift from
providing broad compensation for all to delivering life enabling support geared
to individual health circumstances.
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