Premiums will rise with your weight soon

Annamma Chacko, all of 35, was recently turned down by one of the leading life insurance companies. The reason? She was overweight by 20 kg. Annamma has always been on the fatter side. At nine months, she weighed as much as a two-year old. Today, the 5.5 feet tall Annamma tips the scale to 80 kg.

The negative impact that obesity has on mortality trends is increasingly influencing pricing and underwriting of life insurance products.

The levels of obesity in the society are too big to ignore, and are proving to be a major cause for concern for life insurance players as it could scar their bottom lines. Life insurers are, therefore, measuring a policyholder's 'build' to gauge the risks before offering a cover.

The issue has become a major public health concern worldwide, including in India. This is because obesity has links to cardiovascular disease, hypertension, diabetes and many types of cancer, according to global reinsurer Swiss Re.

In a recent report on the increasing levels of obesity, it said life insurance companies are typically using 'build ratings' to assess the risks related to high levels of Body Mass Index or BMI before accepting applications for cover.

In India, obesity is most prevalent among the middle-class. As many as 50 per cent of the female population and over 30 per cent of males in this group are estimated to be obese, according to a study by the New Delhi-based Nutrition Foundation of India.

On the other hand, malnutrition continues to persist in the lower socio-economic strata in India "" which could also be a cause for rejection of risk cover.

Recent estimates put the prevalence of obesity in the developed world at around 10 to 20 per cent for men and 10 to 25 per cent for women.

In the United States and United Kingdom, obesity has increased two to threefold in the last 20 years and other developed countries have shown similar patterns of increase, states Swiss Re's report.

The pandemic is on account of sedentary lifestyles and a significant increase in fat intake "" classic symptoms of an increasingly affluent society. This is true of India too.

The problem is more acute among the younger generation. The population of overweight children is burgeoning, says Swiss Re. It says in the United States, the number of obese children aged six to 11 has doubled over the past two decades.

Life insurers are starting to address the issue as it counters the overall decline in mortality rates in developed nations.

Mortality improvements have been driven by progress in medical treatment, reduction in heart diseases and declining use of tobacco. Swiss Re says it is highly probable that mortality improvements could have been greater if obesity levels had remained stable.

After dealing with problems associated with smoking, the life insurance industry has to now tackle issues associated with obesity, ensuring that the related risks are accurately assessed and rated.

"This will present challenges for underwriters and actuaries in an increasingly competitive environment. For existing life insurance cover, the detrimental effect of increasing obesity is expected to be offset by continued overall mortality improvements," says Swiss Re.

The global head of pricing at Life & Health Business Group of Swiss Re says: "Confronting obesity calls for a combined and determined effort from all parties.

Governments, the medical fraternity, food manufacturers and consumers "" in particularly parents "" need to be alert to this emerging risk and to play a role in confronting it."

"Unless the prevalence of obesity is brought under control, consumers will need to bear the ultimate cost. As consumers' BMI goes up, so, too, will the premiums," he warns.

So the next time you buy life cover "" check your weight first to ensure that you fit the insurance company's bill. Else chances are, you will have to cough up a higher premium.

SO WHAT'S OBESE?
Obesity is defined by the World Heath Organisation as a body mass index (BMI) greater than 30. BMI "" which measures a person's build "" is calculated by dividing a person's weight in kilograms by the square of their height in metres. This BMI is based on Caucasian builds, and the cut-off limits for obesity for Asian lives should be lower than 30.