The insurance industry is currently at a loss about how innovative smoking-related products, such as snus and electronic cigarettes impact life and health insurance markets. The US insurance industry has only recently begun to deal with it and take it into account.
[pullquote_right]The United Kingdom’s laidback and adaptable regulations for insurance have made innovation possible with immense advances[/pullquote_right] The United Kingdom’s laidback and adaptable regulations for insurance have made innovation possible with immense advances. Its single provider healthcare system has 10 per cent of its population resorting to private health insurance.
However, according to the Telegraph newspaper, a broker has been able to get people who use e-cigarettes covered at non-smoker’s fees for life insurance policies.
The newspaper reported that there are reservations if the trend will continue because most of the reinsurers have not resolved how to underwrite such factors.
This will require deeper scrutiny because most of the e-cigarette users are current or either former smokers. The injuries sustained from smoking tobacco do not disappear when one stops smoking.
This complicates the matter because most insurers mark smoking as a negative underwriting factor because cigarettes are poisonous and it also denotes risky behaviour.
[pullquote_left]Snus, which isn’t sold in the UK, and the e-cigarettes have been researched and have shown to be less dangerous than cigarettes[/pullquote_left] Snus, which isn’t sold in the UK, and the e-cigarettes have been researched and have shown to be less dangerous than cigarettes. However, that does not translate to having their users get slashed rates or that insurers be obliged to acknowledge their risk differential in their underwriting and setting rates.
The practice in UK on e-cigarettes shows that there is some market inclination to take unusual harms into the equation. Even of the US health and life insurers would not adapt to what UK insurance companies have done, they should probably stand back and learn.