Hannover Re's Kate Ramsay examines the effect on the insurance market of new recommendations for the safe alcohol limit.
The trouble is, this can mean another liver-related disease or even show the impact of obesity, raised cholesterol or medication. However, an ultrasound scan of the liver is far more useful as an underwriter: we don't want to play the part of diagnostician.
This can be a source of frustration in the underwriting journey. Hair-strand testing and a test called the carbohydrate deficient transferrin (CDT) are available, but these are not yet widely used in the NHS due to cost.
Alcohol combined with other recreational drugs and/or mental illness can be a dangerous cocktail (pardon the pun) and will be viewed with caution by underwriting. And it is a drug, albeit a socially acceptable one.
Had it not been around for centuries, one cannot imagine it willingly being introduced into today's society (tax perks aside). A study published in 2010 in The Lancet ranked drugs of harm in the UK on a points scale (6).
Alcohol was scored the most dangerous, with heroin coming in second place. The UK's new guidelines are fairly unequivocal in stating: "There is no safe amount of alcohol'", and sadly we have seen alcohol play its part in a number of claims over the years.
There is no denying that it is widely used in England. In 2013, 63% of men and 64% of women drank at levels indicating lower risk of harm; 18% of men and 13% of women drank at an increased risk of harm; and 5% of men and 3% of women drank at higher risk levels. 15% of men and 20% of women did not drink any alcohol in 2013 (7).
Because these are figures from 2013, they were based on the previous maximum of 21 units per week for men.
The 2016 proposed guidelines are still at consultation stage and will be until 1 April: until then we do not know if this will move a large proportion of Brits into the ‘increased risk of harm' category.
Stricter guidelines
So, if you've been thinking of immigrating to Spain for the Rioja, perhaps now is the time to do it.
According to the data, from the EU (8), the UK is now the seventh strictest EU country for its alcohol limit guidance (The Netherlands, Poland and Bulgaria have the lowest limits in place).
Spain, France and Finland have Europe's most relaxed alcohol guidance limits. Several national governments do not issue official policies and there is no worldwide agreement on safe or maximum alcohol levels (similar to the number of pieces of fruit and vegetables that should be eaten daily).
If you're teetotal and wondering if that will get you a discount at underwriting stage, that is unlikely to occur in the near future.
Although tee-totallers are thought to be at less risk of some cancers, the effect is marginal. Also, while a condition like diabetes is easy to corroborate with a blood test, it would be very difficult to prove a customer was a lifelong tee-totaller.
Assessing the effects of alcohol is an ongoing challenge: measuring the true intake and understanding the impact on the individual.
The new government guidelines are unlikely to change companies' underwriting philosophy significantly; we already act on hazardous or excessive alcohol intake when we know about it.
Much work has already been done in making questions clearer on the application form and identifying the higher risk drinkers by asking the right questions.
Life offices, actuaries and reinsurers will now be reviewing these new guidelines and the evidence underpinning them to confirm what their alcohol tolerance will be.
Kate Ramsay is a medical risk researcher at Hannover Re UK Life Branch
Sources:
1) https://www.gov.uk/government/news/new-alcohol-guidelines-show-increased-risk-of-cancer
2) https://www.gov.uk/government/news/ambitious-new-alcohol-strategy-launched
3) http://scienceblog.cancerresearchuk.org/2016/01/08/new-alcohol-guidelines-to-help-cut-cancer-risk/
4) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/489795/summary.pdf
5) http://bmcmedicine.biomedcentral.com/articles/10.1186/s12916-015-0337-0
6) http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(10)61462-6/abstract
7) http://www.hscic.gov.uk/catalogue/PUB17712/alc-eng-2015-rep.pdf
(8) http://www.rarha.eu/Resources/Guidelines/Lists/Guidelines/Attachments/2/WP5%20Background%20paper%20Low%20risk%20guidelines%20ISS.pdf
The opinions expressed in this article are those of the author. This article is guidance only and does not constitute legal or professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.
