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Most life insurance underwriters expect more pandemics

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Nearly three-fourths (70 percent) of life insurance underwriters expect the number and severity of epidemics and pandemics to increase over the next 5 to 10 years, according to new research.

The reinsurer Munich Re U.S. Life discloses this finding in a survey conducted at the Association of Home Office Underwriters (AHOU) 15th annual conference in Orlando, Florida May 1-4, 2016. The poll represents the views of 102 underwriter attendees (primarily from life insurers) who participated in in-person interviews.

Among the survey respondents, 46 percent believe influenza (bird flu, swine flu, etc.) is the potential pandemic disease that carries the most risk for the insured population. This is followed by:

  • a currently unknown disease (25 percent) Zika virus (14 percent)

  • Ebola virus (8 percent); and

  • SARS (7 percent)

Of the life insurers represented, nearly 3 in 4 (73 percent) take into account geographically localized risks in their medical underwriting process. However, only one-quarter of the life insurance companies currently have take Zika virus into consideration, despite recent outbreaks across parts of Central and South America.

“As alarming as the outbreak in South and Central America may seem, Munich Re expects limited impact on life and health insurance,” said Dr. Gina Guzman, vice president and chief medical director at Munich American Reassurance Company.

When asked how recent epidemics such as Ebola virus and Zika virus have affected consumer behavior regarding life insurance purchases, nearly two-thirds (64 percent) of respondents think they have had no impact, while 34 percent believe there are now more consumers seeking coverage.

In addition, 56 percent of respondents believe the occurrence of epidemics or pandemics will have no impact on the accessibility of life insurance. Despite the potential for an increase in the number and severity of epidemics and pandemics, an overwhelming majority (91 percent) of respondents suggest that average consumers will more easily obtain life insurance at affordable rates within the next 5 to 10 years.

“We are seeing a real interest in increasing access to life insurance products,” said Bill Moore, vice president, underwriting and medical at Munich Re. “I think that future accessibility of life insurance will be governed by new technologies and processes that will make issuing policies a quicker and easier process.”

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