John Schoonbee and Emile Elefteriadis: Why nutrition should matter to insurers


Perhaps I’ll begin by saying that this is
a really, really good question, and a really important one. More than a year ago when I said to some really
senior people at Swiss Re, I think this is an important topic, and could change things
for us, I was I think quite reasonably told for goodness sake for life insurance certainly
the area that I work in. Why would we be interested in telling people
what to eat? So I am going to tell you, or share some of
the information around the argument that I use to convince them for me to get to a point
where we are having a conference like this and we are trying to drive change. Right. So often when we give these talks we think
people know everything and people understand stuff. So I’m going to give you some really basic
things, which you probably all know, but kind of life insurance 101. So typically a low amount of money usually
a monthly premium, somebody pays and they get cover to protect them in the unlikely
event that they suffer substantial financial loss, usually for the dependents, right. And what it does show of course is it collects
that money and then it pays out, when someone for example dies for life insurance. This is priced for by a very clever actualities
and my colleague who is speaking after me is one of them and they take into account
a lot of different factors, and future projections. So how does nutrition fit into this? Well, really simply if more people die, we
pay off more, and if less people die we pay off less. So it really is not rocket science. Our goal is entirely aligned with making the
world a healthier place. It’s really easy. So a lot of people say, you know what’s Swiss
Re’s financial invested interest in this, and we want people to live longer, healthier
lives. It’s a really easy answer. So why are we so interested? I mean we’ve seen a lot of these slides already
today, and some yesterday. This is just a slide looking at the top ten
causes of death, I think the study I show data. And what you can see firstly up there is that
six of the seven top causes of death are NCDs. Right. It is like what? It’s astonishing. We kind of know that, but it is a big deal. And then if you look at diabetes, these are
different regions this is America, South East Asia, European region, I have left out Africa. You can see that diabetes is ranked 5th, 7th,
and 8th. If you look over here on the pie chart, this
is US data from the CDC, and diabetes with females 2.7%, and for males 3.1% as a cause
of mortality. But I am not so sure about that because we
know it’s strongly associated with lots of other diseases, right. You know such as cardio vascular disease,
cancer, Alzheimer’s, and so if you look at that, and you go, hang on all of these things
are associated with diabetes. Is the 3.7% the right number? So looking at a study that was published … In
fact this came out after some date in the US showed that there was this reduction in
mortality improvements, so there is an increased mortality particularly, in middle aged white
males. And what this study showed is that the percentage
of people dying, so they look at Ann Hann’s data and, I think the National Health Institute
Self Reported, and they looked at HPA1C. And you can see on average they found around
about 11-12% of deaths caused by diabetes. You go, okay, that’s a bit higher right. And in fact in obese people up to a fifth
of them are dying because of diabetes. That is a lot of people. And if you look at the IDF diabetes atlas
… So this in fact the 2017 data, completely different data set, and they came up with
14% of adults in North America and the Caribbean. So it’s a big deal right. And then the other thing is for an insurance
company, often we have whole life policies, but typically people buy policies between
the ages of 35 and 45. And so we worry about people dying between
those ages and kind of 65, 70 and you can see that a third of deaths, right, due to
diabetes, was occurring in people under the age of 60. It’s a really big deal for us, right to be
paying these claims. Then I thought I’d show you this. So this is Swedish data. Looked at a whole bunch of type 2 diabetics
matched for age and sex and county. And what you can see up here is, so they got
different age groups, less than 55, 55 to 64 that I have highlighted. And they got the number of deaths per 1000
person years. And what you can see, let me see if I can
make this thing work. Here we go. So what you can see over there, right, this
is total mortality and you can see that for non-diabetics it’s around about 3 in that
age group and double for diabetics. Right, so it’s double. And then you go one step down, and you see
cardio vascular deaths, and you can see that it’s almost tripled. Because there’s .72 and 2.2 in this age group. And then if you go to cancer deaths, it’s
about 50% higher. And then a really weird one is a diabetes
related causes and you kind of go, what? So what were the others? Right. If it was so much higher, so clearly diabetes
as a contributing factor as opposed to the absolute cause is there is a lot of messy
information up there. But it’s a big deal, in terms of mortality,
and mortality increases. I think this is a UN graph, we all know this
right. That it keeps going up, we saw graphs earlier. 48% increase 2045, right. Over 600 or around about 630 million people
globally with type 2 diabetes, is what we kind of expecting. I was in Mauritius, we tend to always talk
about the US and UK, I was in Mauritius recently. Little island off Southern Africa. We drive from the airport and it’s just sugar
cane everywhere. Sugar cane everywhere. And what is amazing was that there was good
music, right. For the first time in 30 years, the prevalence
has stabilized. Look where it’s stabilized. 22% of adults, right. More than one in five have actually had diabetes. Pre-diabetes also stabilized. Well come down a little bit from 25 to 20%. Shocking numbers, right. What does it do to that society. And then for the doctors in the room, or those
that know about type 2 diabetes, metabolic control, a third of an HB1C over 9. A third. Absolutely devastating. And then to add to this we’ve got proportion
of undiagnosed diabetics. Huge. Right, you can see the numbers. In Africa it’s 70%. But even in Europe, close to 40%, undiagnosed. So nothing’s happening. So diabetes is clearly a really big problem
for us. Yet, we heard yesterday right there’s the,
direct study. There’s Verter, David Owen’s study. We know that it can be reversed. Yet, what’s happening? Right, why is it still so small. Why is it not exploding into health care? And then the other reason that nutrition matters
of course is obesity, very much linked to diabetes. What you can see over there is that cancer
it’s not mentioned as a death anywhere, yet of course we know that it’s strongly associated. And I know as we mentioned yesterday you know
there is no such thing as an unhealthy weight, but if you look at big numbers, you take a
million people’s BMI of 35, and a million people’s BMI of 25, the mortality is going
to … There’s going to be an increased mortality in that BMI of 35 group. So again if you added obesity as a cause,
potential cause, and then you said what’s associated with it, substantial. Right. Its huge and we know there is an increased
association when it comes to obesity. We know the trends are going up, this is US
data, and this in fact got shared with me earlier this week. This is being presented in Boston. It’s based on the Ann Hann’s data, and it’s
looking at projections, and the projections show that by 2030, so most of Mexican Americans
will be overweight obese. 50% of adults. So at the moment 40% of adult females have
a BMI over 40. They reckon that 50% of adults will be obese
so that’s over 31. 33% of children will be overweight or obese,
and half the adolescence. Absolutely shocking. So imagine if we could stop the diabetes and
obesity epidemic and change the trajectory of world health and in brackets our policy
holders. Right. Imagine. And what’s astonishing is that even though
that’s what the individuals want, and health systems, and doctors, and everybody in this
room, that’s what we all want right? This is what I find on Twitter about a week
ago. Right, I just don’t know who or what to believe
science contradicts each theory, experts and doctors and both science explaining why science
behind every point is accurately better. It’s no wonder we have a problem. And it’s been a wonderful two days, but it’s
been very obvious that this is a problem. Right even in this room, with experts that
all care, and all want the same outcome. So fixing this is really, really important
to us. And I think what I need to say is that … So
I mentioned yesterday, so I have a low carb lifestyle. I don’t care what the evidence shows. If people should have like pink marshmallows,
and we should sell every policy holder the fantastic capsules, the capsules
that we mentioned this morning right, that’s fine. It would make them live longer, healthier
lives. Let’s do it. So me and Swiss Re, we’re completely agnostic. Whatever works, that’s what we want. We want people to live longer, healthier lives. That’s one of the reasons I think we are really
good partner because we’re essentially unbiased. We don’t care. Right. As long as it’s the real stuff and the truth. So I’m going to hand over to Emile now, who’s
going to explain to you the more technical details. Emile. Emile Elefteria: Okay good afternoon. Thank you John. That wasn’t rocket science. That was actuarial science. All right. So as an insurer, I’m gonna echo what
John said, I am interested in low cost, effective, sustainable, preventive health strategies
that keep healthy people healthy and the seeing with respect to therapeutic strategies that
transform unhealthy people into healthier people and keep them that way. Okay. It seems to me that food and diet seem to
be that strategy that can go a long way. I sense change happening thanks to the leadership
in this room. So I’m feeling change. I’m hearing more and more about this as a
real approach. So, the single biggest cost component for
insurers are the benefits it pays. The death benefits it pays to the families
of the deceased. The medical and disability benefits it pays
to the sick and injured. Now, I’m going to be focusing like John, on
life insurance and mortality risk, but much of what I say applies even more to health
insurance. Most people buy life insurance between the
ages of 30 and 50 for coverage that may extend for the rest of their lives. Now, the price of life insurance is very much
related to probabilities of death or mortality rates. Okay. Actuaries need to project these mortality
rates many years into the future, 30, 50, 70, 100 years into the future. It’s pretty bold. Now, actuaries also reflect that they take
into account that oh geez, mortality has actually been improving. Because insurance is a very competitive industry,
price matters. In insurers, to various degrees, in order
to be competitive, have to reflect at least to some extent this declining trend in mortality. Okay. So this year over year decline in mortality
rates is what we call mortality improvements. And for the past several years mortality rates
have averaged between 2, 2.5%. This is in the UK. But beginning in 2011, those mortality rates
have started coming down. Now if you’re an actuary in your pricey business
in 2009 you’re going to say oh mortality’s 2.5% maybe I’ll assume 1.5%. But here you are in 2016 and you’re saying
oh my God. Okay. Here’s another way of looking at the same
thing. This is life expectancy. Yellow is from birth, the blue is from age
65, right scale, left hand right hand, in terms of number of years. We see that the rate of increase in life expectancy
is also starting to slow down. I call this the progress on the war on death. We’re sort of losing steam on the war on death. But this is the UK but this is a global phenomenon. I think Japan might be one of the only exceptions
in the Western world. In the huge insurance market of the great
old USA, we’re seeing exactly the same thing and even in Canada, of all place. Even in Canada. This is truly shocking. To the extent that mortality improvement rates
could be slowing down, this can adversely impact insurers who have built into their
prices assumptions of future mortality improvements that may not materialize on insurance already
sold. It’s a big deal. We are very interested in how some of these
nutritional approaches that John has referenced and how they could be used to preventatively
and therapeutically to improve mortality and perhaps re-accelerate that rate of mortality
improvement, because that’s what’s built into a lot of the pricing. Problem is … Oops. Yeah. So the problem is there are no mortality studies. Right. There are no mortality studies that show the
impact of what the strategies could be. So we had to rely on some indirect means to
estimate this. So my colleagues back in Canada, Maria Zu, and Catery Latter, Catery Langaville , we built an insurance
based model that is based on the time tested approach that under insurance companies says
used for generations to asses risk. And that is a relative risk assessment based
on risk factors. Insurers use risk factors to assess risk. For a pool of applicants that have a variety
of risk factors, the underwriters would assess them based on their risk factors and offers
of insurance would be made to those that are insurable. The graph here shows this distribution of
what the relative risk may look like for a hypothetical pool of applicants and stratified
into three major classes. The standard class is what is the most comprehensive
and basic class that we put insuring lives into. Right. It’s actually quite broad in terms of the
relative mortality risk in that class, but if you’re in that class, we call you standard
and your rating would be 100%, i.e. standard. Right. The substandard are those that show elevate
mortality relative to the standard class and these people would be charged higher premium
rates. So that’s the basics. Swiss Re has its own relative risk assessment
tool. It’s a multifactorial relative risk assessment
tool that has been developed over many years and continues to be updated based on the best
available evidence there is. Our own insurance studies, clinical studies,
and well conducted population studies, and we’re a necessary expert opinion. So let me show you how this is used and how
we applied it in order to estimate what the impact of these approaches to nutrition could
be. So this is Tom. Now, Tom isn’t actually doing so great. He’s diabetic. He’s been diabetic for a number of years,
very heavy. He’s got not so good risk factors. Tom, decides it’s time for a change. I’m going to change my diet. I’m going to change my lifestyle. So he enrolls in a medically supervised nutrition
and lifestyle program and 12 months later, Tom is a new man. All right. So we would look at Tom prior to the intervention
and say, “Wow Tom. Based on these risk characteristics that you
have, we would assess you as 240% mortality.” So 2.4 times higher than the average risk. This is all cause mortality. But after the program, still thinking he’s
diabetic, but controlled, we would say, “Tom, you’re actually much better now. We think you’re at about 155% total mortality.” So that’s a 35% reduction to mortality. If we believed he was in remission and cured,
that would even be greater. Now, we’re going to get to you how we translated
all this to come up with a estimate as to what food as medicine can do. So we considered our insurance portfolio. Our portfolio … Not our portfolio, but a
typical insurance portfolio is composed of policies that have been underwritten many
years ago, so the lives may not be healthy to lives that are super healthy and young. So this is young and old, recently underwritten
assessed for risk, assessed for risk many years ago. So this is a whole hodge podge of people. We stratified the portfolio into four metabolic
states. I’ll call them metabolic states, I might be
wrong in using that term. But one group are the diabetics. Right. And we estimate in the insurance portfolio,
about 5% of the lives. Now that’s less than in the general population
because an insurance population is generally healthier. Pre-diabetics, we estimated at approximately
18% and then the rest 38% we classified as having metabolic syndrome or hyperinsulinemia,
things that we believe we would be amenable to the nutritional strategies that John mentioned. Then the rest is free and clear of any symptoms. We then said, how do each of these groups
contribute to mortality? So we looked at the relative risk of each
of the groups, but also, the fact that what their age is. So diabetics are older so just because of
their age, they would contribute to disproportionately to the total number of claims. So we estimated that diabetics contribute
to about 12% of total deaths. Pre-diabetics, 25%, because they’re a little
bit older and have worse than average mortality, the hyperinsulinemic just a little bit average
age and a little bit higher mortality and then the healthy, much better than average
mortality, because they’re younger and healthier. We then used the life guide tool in order
to estimate what the reduction could be if they followed such a program and their risk
factors were greatly improved and so for the diabetics, we said 26% reduction. For the pre-diabetics a 19% reduction in all
cause mortality. For the hyperinsulinemic other with metabolic
syndrome, 13% reduction. And for the 39% no reduction. You multiply that all out, that’s about a
13% reduction. Right. Insurers pay billions of dollars in death
claims. In the US alone, it’s 80 billion. In Canada it’s eight billion. So might this … This is if everybody does
that. Not everyone is going to do this, but if we
brought this in at 10% a year, that’s 1.3% a year. Our mortality improvements are back to where
they ought to be. Right. This is why I’m particularly very interested
and excited. But John, truly, seriously, why are we doing
all this? Why are we really doing all this? John Schoonbee: Next slide. Thank you. All right we’re running out of time a little
bit but I think it’s really important and I don’t want to oversell this. But Swiss Re’s vision is that we make the
world resilient. This aligns so much with our vision. And the fact that we can help ourselves financially,
but make the world healthier is obviously a fantastic celebration of an opportunity
that we are planning to take. So thank you very much thanks Emile.

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