Life insurance costs may soon rise for people who vape

Global reinsurers that insure the risks of other insurance firms are stepping up their warnings to their clients about the potential risks of vaping, putting pressure on underwriters to either exclude people who vape from insurance coverage or to charge them higher rates than other smokers.

Authorities in the United States said last month that there had been 47 deaths so far this year from a lung illness tied to vaping. Health concerns about the practise have grown despite evidence showing e-cigarettes help smokers to quit, and these concerns have led to bans in countries including India and Brazil.

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Reinsurers often have large research arms that 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 way, meaning both groups can pay close to double the premiums of non-smokers or non-vapers. But three major reinsurers have issued new warnings and provided updated advice on vaping in the past three months, while others are considering their approach.

The new warnings focus on young vapers and the vaping of liquids that contain the marijuana or cannabis ingredient tetrahydrocannabidinol (THC), which can be legally smoked in 11 US states and which has been linked to a rash of lung illnesses in the US.

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 US, said Nico van Zyl, the reinsurer’s US 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 an October 24 paper that e-cigarettes contain nicotine that may have toxic effects such as compromising brain development in teenagers and young adults.

SCOR recommends that life insurers treat vaping like smoking and exclude individuals who use vaping products that US authorities consider likely to cause lung issues – namely, products containing THC.

Swiss Re also treats vapers like smokers. John Schoonbee, the reinsurance company’s global chief medical officer, said Swiss Re has told insurers in recent months to make extra checks on whether vapers are using cannabis products.

US warning

The US Centers for Disease Control and Prevention has urged people not to use e-cigarettes containing THC and has noted that some of these products contain vitamin E acetate, a “chemical of concern” among people with a vaping-associated condition called “product-use associated lung injury” (EVALI).

Stephen Cooley, the chief medical underwriter at PartnerRe Life & Health, said that more research on the long-term effects of vaping was needed and that life insurance rates for vapers would be the same as the rates for other smokers “at best”.

Munich Re and Gen Re said they were monitoring recent developments with EVALI cases.

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 the United Kingdom and elsewhere in Europe is more heavily regulated than in the US. Vapes containing THC or cannabis oil of any kind are banned in the UK, and Public Health England says vaping is at least 95 percent safer than smoking.

Vaping switch

Twelve out of 13 life insurers contacted by the Reuters News Agency in Europe, South Africa, and the US said they already treated vaping like smoking.

Most have taken this stance for years, but a handful have recently made the switch to treating people who vape like other smokers. US insurer Prudential Financial made the change in October, while the Irish subsidiaries of Aviva and Zurich Insurance Group have switched in the past year.

Zurich said its new approach in Ireland followed consultation with reinsurers.

Explaining their caution regarding vaping, Britain’s Aviva and South Africa’s Discovery said there was a lack of objective evidence on 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 ($129,476) of life cover and 100,000 pounds of critical illness cover would cost 11.89 pounds ($15.39) a month for a non-smoker/non-vaper and 20.56 pounds ($26.62) for a smoker/vaper.

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 life insurers’ views on vaping was the stance taken by Reviti, a new insurer owned by cigarette and e-cigarette firm Philip Morris. It is offering a discount of up to 15 percent for vapers in the UK, and giving customers who quit tobacco and nicotine altogether a discount of up to 50 percent.