Unvaccinated may face higher premiums
Partners Life managing director Naomi Ballantyne says since the personal insurance industry relies on medical science and statistical evidence to design its policies and premiums it stands to reason that the unvaccinated, especially those with underlying medical conditions, present a higher risk to insurers than those who have had their jabs.
"To avoid all clients having to pay increased premiums to address this Covid-related increased claims risk, life insurers have several options," she says.
"They can price differently for vaccinated applicants versus unvaccinated applicants to reflect the different risk profiles.
"They can apply specific exclusions to unvaccinated lives to avoid the increased claims risk arising from potential Covid-19 (and variants) infection, or they can decline to offer cover altogether if they believe a combination of pre-existing health conditions and the unvaccinated status of an applicant would give rise to an unquantifiable increased risk of claims."
She says medical science has evolved significantly improving health outcomes across the globe and a large part of this is due to the advent of vaccines.
"We see the development of Covid-19 vaccines as simply the next step in this development and we trust in the long-established medical science behind it.
"The data tells us there is no statistically significant risk to claims incidence or duration rates arising from complications of Covid-19 vaccinations.
"The same global data demonstrates statistically significant medical complication rates arising from infection with Covid-19 (and variants) in those who do not have any immunity to the virus through vaccination or previous infection."
Ballantyne says, from an insurance risk assessment perspective, life insurers globally have started to include Covid-19 vaccination status in their underwriting considerations for new applications - more specifically in conjunction with other pre-existing health conditions.
"In other words, pre-existing issues such as diabetes, heart disease, kidney disease etc are much more likely to result in a claimable outcome if the client is not vaccinated and subsequently contracts Covid-19 (or variants), compared with our normal claim estimations."
She says unvaccinated people have made a personal decision to accept the increased risk and life insurers have a decision to make about whether and how they might accept and accommodate that risk.
Insurance adviser and Willowgrove Consulting owner Jon-Paul Hale agrees with Ballantyne in terms of life cover but says health insurers should also be taking vaccination status into account.
"With the reduction in life expectancy reported in the last 12 months and the 30% of Covid cases developing 'long Covid', disability cover will come under more pressure."
He says while the majority of his clients are vaccinated, Covid may exacerbate pre-existing health conditions and substantially increase claims, and in turn, premiums.
He expects to see a number of different outcomes from this including additional underwriting requirements, product discounts for vaccinated clients or loadings for the unvaccinated, exclusions based on vaccination status and policy term limitations.
"One thing that is not being discussed is the mental health impact from overseas.
"Covid has been and continues to be very confronting to people everywhere and we are just getting started here.
"Families and communities are losing people, the reality that life isn't so simple and easy after all is starting to hit home and we have significant pressure on the health system too."
Hale says post-traumatic stress and mental health issues are other concerns.
"I expect what was already a difficult area of insurance will become more difficult in the near future."