How Insurers can Help to End Smoking

When people quit smoking, health and life insurers save money. The insurance sector therefore has a unique opportunity to save lives while boosting profits, an alignment of interests called shared value. The global insurance industry can, in fact, play a key role in the fight to end smoking. Too often, however, this role is overlooked. Devoted to delivering change across the entire nicotine ecosystem, the Foundation’s Industry Transformation pillar acknowledges the importance of insurers—and of shared value initiatives as a key tactic for this sector.

Insurers have used shared value strategies for decades. For example, Discovery Vitality, a scientifically-validated health promotion program, rewards customers for healthy behaviors. Under this system, healthy habits lead to tangible benefits for all parties involved: the insurer sees fewer claims and increased profits; the customer receives financial rewards and becomes healthier; and society benefits from a more productive workforce. This same type of incentivization can and should be used to encourage smoking cessation; first, however, insurers may need to rethink standard procedures in this area.

Marsh & McLennan (MMC) Advantage Insights recently published a report about “Insurer Perspectives on Smoking Risks,” which was supported by a research grant from the Foundation. The report offers a summary of current practices related to insuring smokers and outlines ways in which these practices might be improved. For example, the report finds that standard tools for detecting and classifying smokers are flawed, and that there is a scarcity of effective smoking cessation programs. The report also indicates that insurers are uncertain of how to manage tobacco risk in the context of new reduced harm nicotine products (e.g., snus, electronic cigarettes, and heat-not-burn products). Finally, the report highlights emerging innovations that could help properly identify smokers and motivate them to quit.

These innovations include: improved biomarkers for smoking detection (e.g., DNA Methylation changes); the introduction of “cleaner” nicotine products (e.g., FDA authorized snus and IQOS); and customer engagement platforms (e.g., Vitality) that could provide the ability to reclassify customers if their smoking status changes. Of course, these important innovations are of no value if insurers remain unaware aware of them. The Foundation is therefore taking strides to educate the insurance industry on existing and emerging tools that can be leveraged to improve the health of customers who smoke and improve classification and detection of nicotine users. Given recent news regarding potential policy changes for smokers, this education is both timely and critical.

According to the MMC report, most insurers take a passive approach to the reduction of smoking-related risks and rarely track the effectiveness of cessation programs. And though there exist some validated cessation programs using carbon monoxide sensors as well as studies on the use of financial incentives and reduced harm products, no single company combines these tactics for a comprehensive approach to cessation and risk classification. To fill this gap, the Foundation plans to support the insurance, InsurTech, and biomarker industries in creating “off the shelf” solutions for insurers.

Moving forward, the Foundation will devote funding to the transformation of the insurance sector, including possibly the development of validated smoking cessation programs that can be used by health insurers, large employers, and life insurers. Success on this front will entail improved health for millions of smokers, increased profits for those that insure them, and important progress in the effort to actualize a smoke-free world.