Carolyn Cohn, Suzanne Barlyn, Noor Zainab Hussain
DECEMBER 2, 2019
LONDON/NEW YORK
(Reuters) - Global reinsurers are stepping up their warnings to life insurer
clients about the potential risks of vaping, putting pressure on underwriters
to charge certain vapers higher rates than smokers, or even exclude them
altogether.
U.S. authorities said
last month that there had been 47 deaths this year from a lung illness tied to
vaping. The health concerns about vaping have grown despite evidence showing
e-cigarettes help smokers to quit, and has led to bans in some countries
including India and Brazil.
Reinsurers insure the
insurers, and often have large research arms which help their clients by
modeling risk. They give broad advice to insurers, rather than specific policy
or pricing recommendations, but can potentially refuse to provide reinsurance
or can raise premiums if their guidance is ignored.
Most insurers have
long treated smokers and vapers the same, meaning they can pay close to double
the premiums of non-smokers or non-vapers. But three major reinsurers have
provided updated advice on vaping in the past three months, with new warnings,
while others are considering their approach.
The new warnings focus
on young vapers and the vaping of liquids containing marijuana ingredient THC,
which is legal and prevalent in some U.S. states and has been linked to lung
illnesses in the country.
The shift in the
reinsurance and insurance sector represents a further blow to the vaping
industry, which markets its products as healthier alternatives to smoking.
Hannover RE (HNRGn.DE), which already advised life insurers to treat vapers like
smokers, has asked them to be particularly cautious about insuring people aged
under 25 following the “epidemic” of lung injuries in the United States, said
Nico van Zyl, the reinsurer’s U.S. medical director.
The question of
whether to offer coverage to this higher risk group should be a consideration
for life insurers, he said.
French reinsurer SCOR
(SCOR.PA) said in a paper on Oct. 24 that e-cigarettes contain nicotine
which may have toxic effects, including on brain development in teenagers and
young adults.
SCOR recommends life
insurers treat vaping like smoking, and exclude individuals who use vaping
products considered by U.S. authorities likely to cause lung issues - namely,
those containing THC (tetrahydrocannabinol).
Swiss Re (SRENH.S) also treats vapers like smokers. In addition, Global Chief
Medical Officer John Schoonbee said the reinsurer has told insurers in recent
months to make extra checks on whether vapers are using cannabis products.
(GRAPHIC: Insurers
increasingly nervous about e-cigarettes - here)
AMERICAN WARNING
The U.S. Centers for
Disease Control and Prevention has urged people not to use e-cigarettes
containing THC, some of which contain vitamin E acetate, a “chemical of
concern” among people with the vaping-associated lung injury EVALI.
Stephen Cooley, Chief
Medical Underwriter at PartnerRe Life & Health (PRE_pf.N), said more research on the long-term effects of vaping was
needed and that life insurance rates for vapers would be the same as smoker
rates “at best”.
Proponents of vaping
as a tool to stop smoking say the insurers’ and reinsurers’ approach is harsh.
“Getting insurance is
really expensive for people who have taken steps to quit tobacco,” said Simon
Manthorpe, CEO of British vaping product manufacturer Vapemate.
Vaping in Britain and
elsewhere in Europe is more heavily regulated than in the United States. Vapes
containing THC or cannabis oil of any kind are banned in Britain, and Public
Health England says vaping is at least 95% safer than smoking.
(GRAPHIC: Worldwide
adult e-vapour users rise - here)
FILE PHOTO: A demonstrator vapes during a protest at the
Massachusetts State House against the state’s four-month ban of all vaping
product sales in Boston, Massachusetts, U.S., October 3, 2019. REUTERS/Brian
Snyder/File Photo
VAPING SWITCH
Twelve of 13 life
insurers contacted by Reuters in Europe, South Africa and the United States
said they already treated vaping like smoking.
Most have taken this
stance for years, but a handful have recently made the switch to treating
vapers like smokers: U.S. insurer Prudential Financial (PRU.N) made the change in October, while the Irish subsidiaries of
Aviva (AV.L) and Zurich (ZURN.S) have switched in the past year.
Zurich in Ireland said
its new approach followed consultation with reinsurers.
Explaining their
caution on vaping, Britain’s Aviva and South Africa’s Discovery (DSYJ.J) said there was a lack of objective evidence of the long-term
effects. Justin Harper, head of protection marketing at British insurer LV=,
highlighted recent evidence indicating that vaping damages the lungs.
Harper said a 20-year
policy for a 35-year old offering 100,000 pounds ($128,300) of life cover and
100,000 pounds of critical illness cover would cost 11.89 pounds a month for a
non-smoker/non-vaper, and 20.56 pounds for a smoker/vaper.
The life insurers told
Reuters they were not treating young vapers differently, though Zurich said it
was monitoring statistics on increased deaths or illness among this age group.
One exception among
the life insurers in its vaping view is Reviti, a new insurer owned by
cigarette and e-cigarette firm Philip Morris (PM.N). It is offering a discount of up to 15% for vapers in Britain.
Customers who quit tobacco and nicotine altogether get a discount of up to 50%.
(GRAPHIC: Juul
dominates global e-vapour market - here)
Additional reporting by Maya Nikolaeva in Paris, Emma Rumney in
Johannesburg and Kate Kelland in London; Editing by Pravin Char
Our Standards:The Thomson
Reuters Trust Principles.
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