Does genetic make up or lifestyle dictate female claims? Johanna Gornitzki takes a look at the trends in the protection and health insurance market
With two completely different sets of genes there is no mystery behind the fact that men and women tend to suffer from very different illnesses and mortality rates. The impact of lifestyles and medical advances on longevity has highlighted the need for insurers to not only look at genetics when setting premiums but also make sure they constantly monitor mortality trends.
Men and women have always experienced different rates when applying for various insurance cover such as income protection (IP), critical illness (CI) and private medical insurance (PMI). This is because their claim trends are completely different.
For instance, cancer is the number one reason why women claim on their CI policy. "In fact, over 70% of female CI claims are caused by this disease," reveals Bernie Hickman, protection development director at Legal & General. "For men, on the other hand, this figure is only around 50%."
Breast cancer is the most common form of cancer among women in the UK, accounting for 42% of all cancer claims. For men, testicular and prostate cancer are the most prevalent forms of the illness, accounting for 28% and 23% respectively. While these statistics clearly indicate that genetics play a vital role when forecasting claims trends, other findings also support the fact that the way people live can impact on the prevalence of cancer.
For example, figures released by the Office of National Statistics show that the incidence of cancer increased by 39% for females and 20% for males between 1971 and 2001. This astonishing rise in such a short time span suggests that lifestyles are mainly to blame, not genetics.
Ronnie Martin, consultant at Adalta Consulting, believes the way in which women currently lead their lives could have a major impact on future claims. Although breast cancer by far outstrips any other forms of cancer, Martin suggests that people's current lifestyles could soon push other types of cancer to reach the same levels.
"There are currently three times as many cases of breast cancer among women compared with lung cancer. However, young girls still smoke more than boys, and if this trend continues, it is possible that female lung cancer cases may become more prevalent. While the gap between breast cancer and lung cancer is fairly big, this may well start to close it up," he says.
Following cancer, the second most common cause of female claims is multiple sclerosis (MS), which makes up 6% of all female CI claims. This is closely followed by heart attack and stroke (both 5%). The claims picture for men is in stark contrast, with heart attack and stroke accounting for around 31% of all their CI claims. This again is largely due to genetics.
Besides DNA and lifestyles, the development of more thorough screening processes, such as mammography and pap smears, have also impacted on claims figures. This is because new technology has made it easier to make early detections. The recent drop in the age at which women claim on their CI policies reflects this. According to GE Insurance Solutions, almost half of women's CI claims are now made before they reach the age of 40. This does not mean that more women suffer from the disease, but to the fact that the disease is discovered earlier.
Neil Pine, mortgage and protection development manager at Norwich Union Life, agrees. "Changes in experience and incidence are likely to reflect the advances in medical science with the trend towards earlier diagnosis of disease," he says.
The full claims picture is, however, likely to be painted by a number of factors, he adds. "Lifestyle changes and increased levels of obesity are also likely to affect future claims experience, but these are likely to take some time to show through."
Stress syndromes
When it comes to IP, an individual's occupation also plays a vital role when predicting the likelihood that they will make a claim. Insurers have divided occupations into four classes, with low-risk workers typically classified as class one and high-risk occupations as class four. The higher the risk, the higher the likelihood of a claim.
Teaching, a typically female dominated occupation, is one area that has moved from one side of the scale to the other. This is largely due to the increasing number of stress-related IP claims made by this group.
Traditionally, the majority of female IP claims were caused by musculo-skeletal problems such as bad backs. This has since been overtaken by psychiatric illnesses, with the fastest growing area of female claims being caused by stress syndromes such as depression and anxiety.
Across the board, psychiatric conditions make up 41% of all female IP claims and 26% of all male claims, according to Nick Homer, product manager for income protection at Norwich Union Life.
"This difference has very little to do with women being more prone to mental health problems than men. It comes from the fact that the majority of women work in a sedentary occupation," Homer says.
"However, perhaps the role played by women in the office has become far more serious, and that is definitely a contributing factor," he adds.
Agreeing, Neil Parfett, consultant at Pioneer Friendly Society, says the increase in stress-related IP claims among women comes in direct response to the fact that many women try to juggle several different roles at the same time.
Another factor, which should also be taken into account, is that mental health problems may have been disguised as other diseases in the past because of the social stigma attached to this kind of problem.
The second biggest cause for IP claims is back problems. The figure for these types of claims has remained pretty constant over the past couple of years, with 19% of all female IP claims being caused by orthopaedic problems.
Apart from these two major claims factors, it is quite hard to fully pinpoint IP claims trends, as Peter McGurk, secretary of the IP Committee, at Continuous Mortality Investigation (CMI), points out. "Causes of income protection claims is a very complex area where cause patterns not only vary greatly with occupational class and sex but also with deferred period and age," he says.
McGurk concludes that when it comes to trends, the only certain thing is that female claim rates are much higher than men's. This trend has widened in recent years as psychiatric IP claims have become more common, and as a result, the gap between men and women has now become even bigger.
This has caused concern. Until now, women have always paid higher premiums because of their claims trends. If these trends were to worsen, female IP policies are unlikely to remain unaffected. There are two likely outcomes. Adding exclusions is one of them.
Homer is not keen on the idea. "The danger is that we exclude a certain condition to make the premium cheaper. In general, we are not keen on exclusions because they can confuse consumers. However, sometimes there are no alternatives," he admits. However, if that does not work, insurers will ultimately respond to increased risk through increased premiums.
Dramatic change
Another insurance product giving rise to different claims among men and women is PMI. Most female PMI claims are caused by back problems or gynaecological investigations, whereas men tend to suffer more from knee problems. Analysing recent trends, it looks like PMI claims have remained pretty unmoved in recent years. Meanwhile, the various treatments used have undergone a dramatic change.
Andrew Brooker, actuarial analyst at BUPA UK Membership, explains: "Overall we have not seen significant changes in the type of conditions requiring treatment, and in this effect the risk will not be affected. We do, however, see changes in the type of treatment being carried out with different ways of treating conditions and a larger proportion of out-patient treatments," he says.
Looking ahead, it seems that modern lifestyles, medical advances and the changing nature of certain professions play an increasingly important role in the claims trend jigsaw.
With this in mind, insurers will do wisely to keep a finger on the claims pulse. However, they should not be too concerned because, after all, the chances are that the number of negative factors on the stage will be levelled by the number of positive factors fighting for a space in the spotlight.
COVER notes
• Cancer is the number one reason women claim on the CI policy, with breast cancer accounting for 42% of all their cancer claims.
• Stress-related problems make up 41% of all female IP claims.
