With Britain officially crowned the 'fat man of Europe' how does the rise in obesity size up for the insurance industry and policyholders in general? Lucy Quinton investigates
The mainstream press have recently shown a wide interest in people's weight with a barrage of articles ranging from models seeming to impersonate people in a Lowry painting to the topical issue of obese children and adults. The issue of Body Mass Index (BMI) has reared its ugly head in a number of these articles but just how important is this three-letter acronym to the insurance industry?
There has been a spate of supermodels thinner than a coat rack and looking as if it is taking a worryingly amount of effort to wear their pilot sunglasses discussing weight issues - typified by Milla Jovovich revealing her size-zero figure (UK size 4), meaning that she is unable to conceive. According to an article in the London Metro, Jovovich says she needs to be skinny to get work, but fears it is stopping her having a baby. The article says being underweight can affect fertility in a big way, but what are the consequences to the insurance industry and its customers?
At the other end of the BMI scale, reports are showing that Britain is the "fat man of Europe". According to a recent Government report, Britons are officially the fattest people in Europe and a quarter of British adults are clinically obese.
Growing trends
Interestingly, reports show a growing concern that obese children will develop into obese adults. Michael O'Donnell, chief medical officer and head of medical services at UnumProvident, says children are less mobile today, schools are selling off playing fields and many do not walk to school anymore. "It is hard to know what the future holds as the Government is doing things to improve the diet but there is an element of resistance to school dinners," adds O'Donnell. He suspects the level of obesity will increase even further and then the trend will be rectified, but he says the real question is when.
This follows on from his article in the February 2006 issue of COVER when he said: "Adolescent obesity is even more likely to persist into adulthood than childhood obesity. One study found that 69% of obese six-to-nine-year olds became obese adults compared with 83% of obese 10-to-14-year olds."
Normal BMI?
According to Kevin Carr, head of protection strategy at LifeSearch, in the medical industry 20 to 25 is considered a normal BMI, but there is no compunction by the insurance industry to follow suit. "BMI is one of the many areas insurance companies consider, and it can be closely linked to issues such as high cholesterol, high blood pressure, diabetes and angina," he adds.
There is a certain amount of leeway when looking at BMI. This is because underwriting "is not an exact calculation or science", says Carr. Circumstances such as age, whether or not they smoke, occupation, family history and overall health are also taken in to consideration.
Tony Jupp, chief underwriter at Norwich Union, says: "The World Health Organisation (WHO) consider BMI between 18.5 and 24.9 to be an ideal weight for height, BMI between 25 and 29.9 is considered over the ideal weight for height. Norwich Union would offer standard terms for applicants in both these ranges and it is likely that other companies would also but Norwich Union can not confirm that". He goes on to say Norwich Union would not charge an additional premium for BMI's between 17 and 18.5.
While there is an acceptable BMI range, with the emergence of an ever-expanding population, not in volume but in weight, have the loadings on BMI changed over the last few years?
Carr believes they have. "Perhaps five years ago, on average, loadings would have begun at BMIs around 32 to 34, depending on the circumstances. However, in recent years, as we've seen the quoted prices fall in the price war, we've begun to see loadings applied at 27 to 28, which is quite harsh," he says. He adds: "As always it varies on the individual circumstances, but BMIs of below 16 to 17 could be charged an extra 50% or higher if the BMI is lower."
Disagreeing with Carr, Steve Casey, product manager at Bupa Individual Protection, says as far as he is aware there have not been any changes.
As Carr suggests, the scale of BMI is somewhat restrictive. Those built like an ox such as injury-dogged rugby player Jonny Wilkinson are surely at a disadvantage. Providers do not take into consideration other factors such as muscle ratio. Carr concurs, adding: "The BMI calculation is quite stark and is potentially inaccurate as it doesn't say much about the person's overall build. However, in the past underwriters have told me that the more weight a person carries, be it muscle or fat, the more pressure is placed upon the heart".
Naturally it is safe to assume high BMI will increase insurance premiums. Hikes vary from 25% to 50% of a normal premium. "Those who are obese, rather than merely overweight, face heavy loadings and could be declined. A BMI of over 40 is potentially a decline," Carr explains.
He goes on to add that with BMI "advisers can really add value by not recommending the cheapest provider". Carr believes the cheapest providers underwrite more harshly and that in the long run consumers save money by selecting a slightly more expensive provider at the outset that is more considerate during the underwriting stage.
Once a person has decided to look into buying insurance, the next stage is the consultation process and all it entails. It is at this stage that a person's weight is taken into consideration. Handled with care and sensitivity it is not a problem but broach the subject with the subtlety of a bull in a china shop and an adviser enters into a whole new area of wrath. Both advisers and providers share a similar opinion of consumers when it comes to weight in so far as they consider them to not be honest when talking about their weight.
Sensitivity is clearly high on the agenda at Bupa as Casey suggests the provider prefers to think of people as being 'too short for their weight'. Perhaps on a more serious note though, Casey says even on the phone the provider can establish a feel for the person.
Sensitivity
Broaching the subject of weight is also something that Jonathan Brigg, protection research manager at Hargreaves Lansdown, says is a somewhat problematic issue. However, he says there are ways to ascertain whether the client is telling the truth as there are certain types of illness that may also be more associated with being overweight and more questions could be asked if the underwriter is not confident about the information they have received. "There is nothing to be gained by dishonestly completing any insurance application form, except perhaps in avoiding a rating. However, the most expensive policy is one that doesn't ultimately pay out," he explains.
While the concept of BMI seems relatively simple, it is also somewhat restrictive so should other guidelines be taken into consideration? There are various ideas in the industry surrounding this including one suggested by Carr, which is to add dress and waist size to the application forms as well as BMI to give a better picture of a person's overall build.
Commenting on the idea of other measurements being taken into consideration, Jupp says: "It is ideal to have hip-to-waist ratios, but again this would require medical examination to determine and unless the person taking the measurements is well trained it's difficult to be consistently accurate."
Colin Wayne, chair of the National Obesity Forum, says the forum - founded to act as an advocate for the better knowledge of obesity and to lobby the Government to take action to prevent people from becoming obese by altering the environment - wants "waist circumference added to the criteria as there is a strong correlation between waist circumference and visceral fat".
Casey concurs with the concept of examining the distribution of weight in addition to using BMI. Certain areas of the body which accumulate fat provide higher risks than others such as around the abdomen.
However, Briggs is sceptical, adding: "Asking people to measure their hips and weight sounds like a recipe for disaster and I cannot see the financial adviser whipping out the tape measure. Simple things like where to place the tape measure on the hip and where is a waist to be measured would see the idea fail."
There are clearly flaws though in the use of BMI when taking out insurance, which is further confirmed by The London School of Hygiene and Tropical Medicine (LSHTM). While Briggs remains sceptical the LSHTM, on the other hand, advocates the concept of hip-to-waist ratio after research it conducted suggests older people with high waist-hip ratios have a higher mortality risk than those with a high BMI. It states: "The excess health risks associated with having a high BMI are known to decline with age, yet expert bodies such as the National Institutes of Health and the WHO continue to use the same BMI criteria in older people the as for other age groups."
BMI has drawn widespread interest recently following the celebrity furore both on and off the catwalk. However, while there is a sudden rush among some people to calculate their BMI, in insurance terms perhaps it really is not the 'be all and end all' as there begin to be calls for other factors to be taken into consideration, which could provide fairer pricing for potential policyholders.
