Are E-Cigarette Users Smokers? 9 In 10 Life Insurance Underwriters Say Yes
Atlanta, May 20, 2014 – Nine in 10 life insurance underwriters believe e-cigarette users should be considered smokers, according to a survey by Munich American Reassurance Company, a unit of Munich Re, one of the world’s leading reinsurers. The survey of life insurance underwriters was conducted at the Association of Home Office Underwriters (AHOU) 13th Annual Conference, held May 4-7, 2014, in Indianapolis.
Among the more than 150 underwriters surveyed, nearly three-quarters (74 percent) categorize e-cigarettes as a tobacco product, followed by a quit-smoking aid (30 percent), drug delivery device (20 percent), and gateway drug (19 percent).
Additionally, 82 percent of life insurance companies with an underwriting policy in place for e-cigarettes classify them as tobacco products. Similarly, 76 percent of underwriters who work for an insurance company currently without a specific policy for e-cigarettes believe they should be treated as tobacco products.
“At the moment, there is no way to distinguish an e-cigarette user from a tobacco smoker via cotinine screening, a routine test for most insurance applicants,” said Bill Moore, Vice President of Underwriting and Medical for Munich American Reassurance Company. “While the long-term health risks associated with e-cigarettes remain unclear, most insurers are erring on the side of caution in order to appropriately price and manage risk.”
Underwriting Policies for E-Cigarettes
Of the life insurance companies represented, only 41 percent currently have an underwriting policy in place for e-cigarettes. For those respondents whose company have not yet instituted a policy, 60 percent expect their respective employer to develop one within the next 12 to 36 months, as e-cigarettes continue to gain popularity. Further, 29 percent believe it will take longer than 36 months to develop such a policy and only 11 percent feel it will take less than 12 months.
“As the e-cigarette industry continues to grow, it poses a number of major questions for the insurance industry, many of which do not have black and white answers,” said Moore. “Over the last several years, many life insurance companies have begun to adopt underwriting policies with respect to e-cigarettes, but as illustrated from our survey data, those companies are still in the minority.”
The survey was conducted on-site at the Association of Home Office Underwriters (AHOU) 13th Annual Conference in Indianapolis from May 4-7, 2014, and is intended to represent the views of 150 underwriter attendees, primarily from life insurance companies, who participated in the in-person interviews.