It’s time for insurers to rethink how they quantify and reduce smoking risks. Smoking risks affect life and health insurers worldwide. Tobacco risks and regulations have an impact on underwriting, pricing, claims and reserves in all countries. Smokers account for a significant proportion (10–15 percent) of life and health insurers’ books of business, and insurers worldwide are exposed to the mortality and morbidity effects of tobacco. Smokers also number disproportionately among the uninsured, and insurers may be missing out on smoker segments that are insurable – relatively “good risks” within a spectrum – but currently priced out of the market.

The report reviews current insurer practices and challenges relating to how they detect policyholders’ smoking status, quantify smoking risks, and reduce risks through smoking cessation. It then recommends potential solutions leveraging emerging technologies, products, and processes to address these barriers. Solutions are illustrated with real-world case studies from organizations innovating at the frontier.