With sporting events this summer resulting in success for many UK sports stars, Paul Hunt ponders possible influences the ‘Olympic bounce' will have on health and exercise and the impact on underwriting.
‘Inspire a generation' was the London 2012 Olympic motto. After the announcement of winning the bid to host the games, it was declared the games were an opportunity to inspire people to get more involved with sport and exercise and become healthier.
The vision was to get one million more people participating in sport three or more times a week and to encourage a further million people to undertake more physical activity.
A generation was certainly inspired in terms of tuning in. The BBC announced record viewing figures - claiming 90% of the UK population watched at least 15 minutes of its coverage. This was the largest national TV audience in history with 51.9m people tuning in at some point.
Channel 4 also presented record increased viewing figures for their coverage of the Paralympics, with an audience of 11.2m tuning in to watch the opening ceremony.
So will the Olympic legacy shift a nation of armchair sport lovers to healthy sport participating individuals or indeed athletes? What impact will this have on our portfolio of insured and future insured lives?
Currently one of the most common rating factors seen in underwriting is for lives with increased BMI. The obesity rise in the UK can be costly for the lives insured and is integral to the increase in prevalence of other conditions such as cancer, diabetes, liver disease and cardiovascular disease.
The Department of Health estimates that obesity costs the NHS £5.1 billion per year. It has also been reported recently that there has been a 50% rise in prescriptions for diabetes since 2005.
The NHS advise that exercise can reduce your risk of major illnesses, such as heart disease, stroke, diabetes and cancer by up to 50% and lower your risk of early death by up to 30%. It is clear to see from these figures that exercise is beneficial.
Risk factors for conditions such as Ischaemic Heart Disease (raised blood pressure, elevated cholesterol, glucose intolerance and diabetes) are commonly disclosed. Unsurprisingly more often than not many of the lives are referred requiring manual underwriting or additional medical evidence.
Additionally, other conditions such as respiratory disorders, musculoskeletal conditions and anxiety and depression, are also commonly disclosed resulting in referral for manual underwriting or additional evidence sought.
The NHS advice on guidelines for exercise promotes that it is medically proven that people who do regular physical activity have;
• up to a 35% lower risk of coronary heart disease and stroke
• up to a 50% lower risk of type 2 diabetes
• up to a 50% lower risk of colon cancer
• up to a 20% lower risk of breast cancer
• a 30% lower risk of early death
• up to an 83% lower risk of osteoarthritis
• up to a 30% lower risk of depression.
There are several positive reasons to encourage individuals to improve their lifestyles, with sport and exercise playing an integral role.
Some may also suggest that these positive benefits will also impact on other lifestyle habits such as smoking and alcohol consumption. Is it fair to think that fitter and healthier lives are less likely to smoke and drink.
As an industry would we gain from more healthy individuals applying for insurance? One obvious benefit is a reduction in medical evidence spend costs, seen from reducing volumes of GPRs, MERs and other tests.
However, there are also negative considerations for underwriting and perhaps more importantly claims:
• Unfit individuals jumping straight into a new sport without seeking any prior medical advice or assessment leading to an increase in heart attacks, strokes or other heart related conditions
• More musculoskeletal claims on disability products following injuries sustained such as back problems, shoulder or knee injuries from participation in sports?
Following the success of Team GB's outstanding performance in the Olympics and Paralympics, David Cameron has confirmed UK Sport will receive £500m over the next four years to maintain funding for Olympic sports at the same level before the 2016 Rio games as during the run-up to London.
The Prime Minister outlined the moves as part of government plans to build on the legacy of the Olympics for Britain advising there's a direct link between elite success and participation in sport.
This is great news for our elite athletes but will this really have an impact for those others that participate in sports for pure enjoyment? Is the focus on improved Olympic success for Rio 2016 through the competitive nature of sports or getting more people involved in sports? Can it truly be both?
The early signs are encouraging; recent figures from Sport England's Active People Survey reveal that according to British Rowing there has already been an increase of more than 10,500 people participating in the sport compared with April 2011. It advises that 48,300 people now row on the water at least once per week in the UK.
The ‘Wiggins effect' is already starting to show with the same survey revealing that 161,000 more people are cycling now than eight months ago.
Sports such as Judo are also seeing a surge of interest for new joiners following the success and spotlight of the sport at the games. Others will no doubt follow the trend influenced by the now ‘celebrity status ' that awaits many of Team GB's medal winners.
The underwriting process is pretty good at handling medical and lifestyle disclosures but are there any new considerations that should be factored in at the underwriting stage following such events as the Olympics?
Should credit for sports participation be given rather than simply trying to identify hazardous pursuits?
Would the question set on application forms need amending in order to:
• Capture greater disclosure for participation in less popular sports?
• List any associated or increased risks with some of these less popular sports, i.e. endurance events (risk of Athletic Heart syndrome)?
• Better define criteria for hazardous pursuits in comparison to those who take part who feel there is no risk?
• Apply credits for someone who regularly participates in sport at least three times a week?
• Apply a pricing discount on the insured premiums if the applicant can demonstrate a certain level of fitness?
In saying this, it is unlikely that as an industry we will be making such changes to our underwriting approach just yet, certainly not as an immediate response to events like the Olympics.
There may be an increase in people (including the insured population) involved in more sport and exercise on a regular basis following the games but the challenge will be achieving sustainability.
Currently we are riding the euphoric wave on the back of the success of London 2012. Perhaps give it a few more weeks and the majority of people, like many of their well-intended new year's resolutions following post-Christmas binges, will quickly fall by the wayside.
Changing the mind sets of many people's attitudes to sport and exercise will have a massive impact in reducing NHS costs attributed to obesity, which in turn can only benefit other areas of medical advances and treatments and indeed our insured and future insured populations.
However, the British Medical Journal previously looked for studies to see if such events like the Olympic Games, had ever been conducted looking at the real-world health and socioeconomic impacts on places which have hosted major sporting events. From the 54 studies they found, there seemed to be no evidence to support the idea that events like the Olympics have a positive effect on health or socioeconomic outcomes.
Let's hope that the London 2012 Olympics are the starting place to break this trend. If they do then they will truly deserve their gold medal and place on the winner's podium.
Paul Hunt, Munich Re Senior Development Underwriter
