Men's lifestyle choices when young, and their increased longevity when old, are putting insurers in a tight spot, as Peter Madigan discovers
Contrary to the old adage, we no longer live 'in a man's world', especially now that life expectancy favours women, who generally receive better life insurance rates. Although, on the down side, this means that as they are statistically more likely to claim on protection products throughout their lives, they are made to pay more than their male counterparts for critical illness and income protection (IP) cover.
As well as the obvious differences in underwriting protection products for men and women, intricacies exist in male health and behaviour which present challenges for advisers when trying to secure cover for their clients.
One of these intricacies is the differences found within men of different ages. The health prospects and lifestyle influences for men under 35 are profoundly different to those in their late 30s and beyond. Indeed, for men under 35, the chances of developing a serious disease are very remote. The main causes of death for younger men are accidents, suicide and murder. However frightening it may be to realise that homicide is one of the leading causes of death for men in the UK, the rarity of such crimes give perspective to just how unusual diseases are for young men.
Young men's woes
The biggest life-threatening condition that affects younger men is testicular cancer. Striking predominantly between the ages of 20 and 44, the disease is unusual as it is the only cancer that targets younger men. Cancer Research UK estimates that there are 2,000 new cases of the disease a year, and numbers are rising. The US National Cancer Institute has observed a 60% increase in testicular cancer cases in the last 25 years.
Similarly, the largest male group infected with HIV in the UK is the 20-39 age group, accounting for 70% of the 52,335 cases nationwide in 2004, according to Aids charity, Avert. With HIV diagnoses increasing sharply since 1999, does the double hit from HIV and testicular cancer mean that insurers should prepare themselves for rough times ahead?
"While testicular cancer cases have been increasing it is relatively easy to treat and it is still a very small condition in terms of the numbers of new diagnoses annually," says Dr Michael O'Donnell, chief medical officer at UnumProvident. "With HIV patients, modern drugs can mean that they live a life that is comparable with a normal life expectancy, but the numbers infected are still so small that I cannot see it having an effect on an insurer's book," he adds.
In the 40+ age range, it is not external factors that are the main causes of death - the biggest killers are heart disease, cancers and stroke. Worryingly they are all on the increase. The Office of National Statistics has found that between 1971 and 2002, age-standardised incidences of cancer increased by 19% in men and 36% in women.
Research from the British Heart Foundation has also indicated that one in eight people in the UK is suffering from heart disease, a 5% increase since 1989. While these are depressing facts, providers stress that we should not simply take such findings as evidence that these conditions are on an inexorable upward trend.
"You have to consider the rise in cancers in light of the better diagnostics we now have. While more cancers are being detected and more lives are being saved, this is good news for life cover but has implications for the critical illness market," says John Quinn, underwriting standards manager at Standard Life. "It may be pointing out the obvious, but people are living longer, and the longer you live you will naturally develop more illnesses and diseases." While the picture for the critical illness and life markets does not look particularly good, for IP there are possibilities to explore.
"Critical illnesses are very rare for men under 40, so perhaps the best product to recommend to this age group is income protection," says O'Donnell. "Far more young men are hospitalised and injured by accidents than killed, so income protection would cater for their needs and support them while they recuperate from their injury. Critical illness is a better fit for older men," he adds.
If insurers are not unduly concerned about the rise in HIV and cancer among young men, one thing they are closely monitoring is rising obesity levels among younger people. If current binge drinking and eating trends continue, alongside little exercise, the consequences, not only for insurance but also life expectancy, could be profound.
"This is a concern for insurers, and we will be keeping a watch on developments," says Valerie Davis, chief underwriter at BUPA. "Medical advances seem to be keeping pace so far and hopefully they will balance things out. As for obesity, we look at rates all the time, but if a substantial portion of society were to become obese then rates could potentially increase across the board," she adds.
This opinion is not universal across the protection sector, however. "I do not think that this is all new, at least in terms of alcohol consumption. Binge drinking is now being more widely reported, but I'm not sure whether it is an entirely new phenomenon," says Quinn. "Obesity may lead to a general increase in mortality. If it does, then it will inevitably be reflected in premiums."
Sedentary lifestyles
The industry does, however, seem to be accepting that obesity is on the increase in society, and very early evidence is emerging to indicate that the young people of today may die before their parents. "If we look at findings from the Continued Mortality Investigation it seems that the mortality difference between men and women is not as pronounced as it was in the past," says Matt Rann, head of underwriting and claims at Scottish Equitable Protect. "This may be due to drinking, smoking and drug-taking, but we have seen the very early signs in data from the past three to five years."
If this mortality trend is only being observed now, these behaviour patterns must have began in the late 1950s. If the more reckless behaviour of youngsters from that generation is only now becoming manifest, what are we to make of current lifestyle habits among the young people of today?
"These are very early indications, but with the mortality trends we are currently seeing, while the pensioners of today should see out their full life expectancy, people in their 40s may only live into their 60s due to their unhealthy lifestyles. As for today's 20-somethings, they may not live as long as their grandparents," says Rann.
The evidence is far from conclusive, but there are indications that this is the direction society is heading, and for men, who generally lead unhealthier lives that their females counterparts, this may be especially bad news. Are intermediaries seeing evidence of such a trend?
"We have seen a bigger increase in stress-related claims in the past five years than we saw in the previous 15, but whether people are actually less healthy may come down to the questions insurers are asking," says Doros Nicolaou, IFA at Millfield Partnership. "We now need tests for blood pressure, diabetes and tighter medical questionnaires, so we are getting fewer 'clean' applications and are having more difficulty getting a life on risk than we would have five years ago," he adds.
So, are men getting unhealthier or is it simply that it is harder to get men on risk at normal rates than it used to be? Undoubtedly children and teenagers are foregoing riding their bikes and sports in favour of computer games and DVDs in ever greater numbers, and this may have grave consequences for the future.
The combination of older people living longer with youngsters who are growing increasingly unhealthy means that insurers will have to raise rates. With the pool of younger people in society already in decline due to demographic forces, there will be fewer healthy lives to support the burgeoning number of older clients who inevitably claim more.
Add obesity, smoking, alcohol and drug abuse to this mix and we will see premiums - as well as policyholders - piling on the pounds in the future.
COVER notes
While heart disease, cancer and stroke are the main killers of older men, accident, suicide and homicide are the main causes of death for young men.
HIV and testicular cancer are on the increase, although the small number of young men affected mean that there should be little impact on life and protection products.
Obesity and binge drinking among the young will put pressure on insurers in the future as they grapple with older clients living longer and experiencing more ill health.
