Prevention in Life Insurance: An Important Pillar of Healthcare

With aging populations & an increasing rate of diseases driving healthcare costs, prevention is key.

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With aging populations and an increasing rate of obesity, diabetes mellitus, and other noncommunicable diseases driving rising healthcare costs globally, prevention is becoming an ever more important pillar of healthcare.

There are several distinctive forms of prevention. Primary prevention is aimed at healthy people and focuses on maintaining health. Secondary prevention refers to the early detection of diseases to prevent their progression. Tertiary prevention focuses on individuals who are already ill and offers support in improving health and preventing secondary diseases (e.g., through rehabilitation measures). As a rule, preventive medicine reduces expenditures in the healthcare system since the costs of prevention are lower than later treatment costs.

Health is a valuable asset. According to a recent study by Gothaer Lebensversicherung AG, almost half of the population currently fears contracting an illness. In addition, a study by DAK (former “Deutsche Angestellten Krankenkasse,” a leading German health insurance provider) shows that people are particularly afraid of cancer and dementia (Figure 1). This explains the great demand for prevention and people’s willingness to take preventive measures.

In principle, everyone desires a long, healthy life. By offering meaningful preventive measures, life insurers can also generate added value for insured persons. More and more life insurers are claiming to provide additional services for their customers rather than the sole promise of benefits paid upon death. This makes life insurance products more attractive, leading to strengthened customer loyalty.

This trend of providing additional health benefits to the insured is increasingly reflected in insurance companies’ "vision" and "purpose" and has become a part of the sustainability strategy in the design of their biometric products. Similar to health insurance, prevention can also save costs for the life insurer if the benefits saved, e.g., for current pension payments due to occupational disability, are higher than the expenses for prevention.

Following the three forms of prevention – primary, secondary and tertiary as described – there is a whole range of other conceivable prevention options that life insurers could implement along the customer journey. In order to take successful prevention measures, life insurers need to define the product, the target group, and the exact time of prevention. This affects multiple business areas, including product development, sales, risk assessment, portfolio, and benefit assessment.

Based on the most frequently reported causes of claims, the areas of mental illness (the number one benefit trigger for occupational disability), cardiovascular diseases, cancer (the most frequent cause of death), and dementia (the main cause of the need for long-term care in old age) are of particular interest for life insurance. Possible starting points and specific challenges for each of these areas are outlined below. This article also highlights how SCOR, as a reinsurer, has launched various projects to provide clients with expert advice on prevention.

 

 

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Thomas
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Head of Client Services Life & Health, SCOR Germany
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Head of Claims, SCOR Köln
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Head of Israel & subregion Life & Health, SCOR Switzerland
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