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COULD LIFE INSURANCE GO UP IN SMOKE FOR SOME VAPERS?

By Carolyn Cohn, Suzanne Barlyn and Noor Zainab Hussain
December 2, 20193:46 PM GMT+1Updated 5 years ago
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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.
Advertisement · Scroll to continue

    Reinsurers insure the insurers, and often have large research arms which
help their clients by modelling 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.
Advertisement · Scroll to continue

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, 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 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 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.
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, 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".

FILE PHOTO: A man holds an electronic cigarette as he vapes at a Vape Shop in
Monterrey, Mexico February 1, 2019. Picture taken February 1, 2019.
FREUTERS/Daniel Becerril/File Photo Purchase Licensing Rights, opens new tab
Munich Re and Gen Re said they were monitoring the recent developments in EVALI.
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.
Worldwide adult e-vapour users rise here
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 made
the change in October, while the Irish subsidiaries of Aviva and Zurich 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
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. 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%.
($1 = 0.7794 pounds)
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., opens new tab

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