Global reinsurers are stepping up their efforts to warn life insurers about the potential risks of e-cigarettes, forcing underwriters to charge some e-cigarette users higher insurance rates than regular smokers and even excluding them from insurance liability altogether. U.S. authorities said last month that 47 people have died this year from lung disease linked to e-cigarettes.
Despite evidence that e-cigarettes help smokers quit, health concerns about e-cigarettes are growing and have led some countries, such as India and Brazil, to ban e-cigarettes.
Reinsurers provide insurance for insurance companies, often with large research departments that help customers by modeling risks. They offer a wide range of advice to insurers, rather than specific policy or pricing advice, but may refuse to offer reinsurance or raise premiums if their guidance is ignored.
Most insurers have long treated smokers and e-cigarette users equally, meaning they can pay almost twice as much as non-smokers or non-e-cigarette users. But in the past three months, three large reinsurers have provided the latest advice and issued new warnings about e-cigarettes, while others are considering their own practices.
The new warnings are aimed at young smokers for smoking liquids containing cannabis, such as THC (tetrahydrocannabinol) oil. THC has been found to be associated with lung disease in the United States.
The shift in policy in the reinsurance and insurance industries is a further blow to the e-cigarette industry, which markets its products as alternatives to healthy traditional cigarettes.
Nico van Zyl, the U.S. medical director for Hannover RE, said the company has advised life insurers to treat e-cigarette users like smokers and to be particularly careful about insuring people under the age of 25 after the outbreak of e-cigarette disease in the United States.
Nico van Zyl said life insurance companies should consider whether to provide insurance for this higher-risk group.
Swiss Re (SRENH.S) policy is also no longer skewed towarde e-cigarette users. In addition, john Schoonbee, its global chief medical officer, said the reinsurer had in recent months asked insurers to conduct additional checks on whether e-cigarette users were using cannabis products.
Proponents of e-cigarettes as a smoking cessation tool say insurers and reinsurers are being harsh.
Simon Manthorpe, chief executive of Vapemate, a British e-cigarette manufacturer, said: “For those who take steps to quit smoking, it’s too expensive to buy insurance. ”
E-cigarettes are more regulated in the UK and elsewhere in Europe than in the US. E-cigarettes containing THC or any kind of cannabis oil are banned in the UK.
For the 35-year-old, a 20-year policy offering a life insurance policy of 100,000 pounds and a serious illness insurance policy of 100,000 pounds is reported to cost non-smokers 11.89 pounds a month, while smokers and e-cigarette users are spending 20.56 pounds a month.