Munich Re's Mike Bolshaw discusses how developments in immunotherapy for cancer patients could impact terminal illness and life insurance claims.
Throughout 2015 Munich Re UK Life worked with medical experts in the fields of oncology and medical research to understand emerging cancer therapies and treatments.
We wanted to understand what we are seeing, or will be seeing, that could revolutionise medical practice and have a subsequent impact on the protection market. One topic that keeps getting mentioned is immunotherapy.
Immunotherapy has been available to cancer patients for some time. However, oncologists and clinical researchers are now seeing study and trial data that is changing the way medics look at cancer treatment entirely.
Primarily, and most importantly, immunotherapy will improve cancer survival rates and relieve the suffering of cancer patients and their families.
In the near future, we therefore predict that immunotherapy will have an impact on the protection market - particularly in the context of terminal illness benefit.
What is immunotherapy and how does it work?
Many tumour cells are able to protect themselves from the body's immune response.
They do this by producing specific proteins that limit the way in which the immune system responds to and destroys them.
Immunotherapy disrupts the tumour cell's defence mechanism allowing the body's anti-tumour function to become more efficient. The immune system is then able to attack and wipe out the tumour cells.
The mechanism of immunotherapy is such that, in addition to being a particularly effective targeted therapy, patients tend to tolerate treatment more easily than more traditional cytotoxic chemotherapies.
Less significant side effects opens immunotherapy treatment up to patients who might not have been offered chemotherapy due to comorbidities or risk factors.
Long term results?
Although it is too soon to predict long term outcomes accurately, a number of immunotherapy case studies have shown remarkable results.
The previous understanding of life expectancy and progression free survival is changing for certain cancers.
In some cases, patients who were expected to survive for only a number of months have gone on to live comparatively normal lives.
Certain cancers are reacting to immunotherapy treatment in a way that allows the condition to be stabilised and managed over a significant period of time.
Who can afford to pay for these immunotherapy treatments?
Typically, newer cancer therapies are expensive cancer therapies. Immunotherapy is no different in this respect. Costs will fluctuate over time as the patent on some drugs expire and new drugs enter the market.
However, average costs are likely to remain at around £50k - £75k per annum, per patient (roughly three or four times more expensive than more conventional chemo/radiotherapy).
In his November Spending Review, George Osborne spoke of a £10 billion per annum (real terms) addition to the NHS budget by 2020. How much of this additional funding will be allocated to emerging cancer treatments is unknown.
Then there's the Cancer Drugs Fund (CDF) which continues to exist and provides funding for therapies that feature on its approved list. However, the CDF's budget is limited and so is the list of drugs it can afford to support.
In the past, Private Medical Insurance (PMI) providers have been slow to provide support for newer cancer therapies as they tend to exclude experimental or unproven treatment.
Insurers are being put under pressure to support more therapies as they obtain regulatory approval. As a result, we are starting to see some PMI providers paying for immunotherapy within certain limitations.
In the private healthcare sector there is also the option of self-pay. Protection insurance can help here.
It's possible that we may see certain informed patients choosing to use a critical illness benefit to fund immunotherapy treatments not available to them through the NHS.
For those with life insurance, it is interesting to consider potential use of any terminal illness claim payment.
Could we find ourselves in a situation where the payment of a terminal illness claim could fund newer and potentially very effective immunotherapies, thereby allowing the patient/claimant to live for many years to come?
The impact on terminal illness claims assessment
Terminal illness claims assessors will ask the treating consultant to provide information and opinion as to their patient's prognosis in order to assess whether life expectancy is likely to be less than 12 months.
Even before immunotherapy, we were starting from a difficult place. Studies looking at how accurately clinicians are able to predict life expectancy show that this is particularly difficult when considering survival periods of more than a few months.
As immunotherapies are new, clinical data on mid to long term efficacy is still limited. Referring simply to median survival statistics becomes questionable as data in these studies doesn't tend to take into account newer and emerging therapies.
There is still much to learn about how cancers respond to immunotherapy.
It would seem to be particularly effective where the tumour itself has multiple mutations or high mutational load. We see such mutations in cancers such as metastatic melanoma, lung and colorectal.
In the past, claims assessors would have considered these cancers to have quite a bleak prognosis by default - immunotherapy means they will now need to adjust their assumptions.
What is the real likely impact for life insurance?
Overall mortality improvements that might emerge as a result of immunotherapy should keep our valuation actuaries happy. However, when reminded of the terminal illness benefit that is attached to most of our life policies, future claims experience looks less clear.
The industry's decision to define terminal illness using a 12 month life expectancy may have been reasonable many years ago.
However, immunotherapy would seem to be having a remarkable impact on life expectancy for certain cancer patients.
Being able to estimate life expectancy with any level of accuracy beyond six months is becoming more and more challenging.
When talking of 12 months, it moves into the realms of guesswork.
When paying a terminal illness claim, insurers believe that on (at least) the balance of probabilities the claimant will die within 12 months.
In the current climate of emerging cancer treatments and immunotherapies, such certainty is less likely.
We may well be paying terminal illness claims years before the actual death of the claimant; this shifts the claims experience and makes our actuaries nervous.
If you're paying these claims towards the end of the policy term then it makes our actuaries more than just nervous, they start to question overall profitability. We are now paying approximately 30% of mortality claims as terminal illness; a figure that increases year on year.
It's likely that more claims will involve patients who are being treated, or could be treated, using immunotherapies.
Does our industry understand these new therapies well enough to make the appropriate decisions and manage the claimant's expectations?
‘Terminal Illness' already means very different things to the policyholder; to the clinician and to the insurer.
The potential impact of immunotherapies in this context is likely to confuse and frustrate claimants yet further, which the industry could do without.
Mike Bolshaw is head of claims at Munich Re UK & Ireland Life
