Social changes and medical innovations are pushing health insurers in Asia to redesign products for a new generation of risks.

Industrialisation, urbanisation and dietary changes have swept through the region during the past few decades, accompanied by a surge in the so-called diseases of affluence: cancer, heart disease and diabetes. For example, more than a third of people living in Hong Kong today will die from cancer. China’s prevalence of diabetes has risen from less than 1% in 1980 to 10% today.

At the same time, advances in screening for these diseases are allowing for even easier and earlier detection. That’s largely a good thing, of course, but combined with the surge in the prevalence of these diseases it is exposing insurers to a significant growth in risk, borne by products that were designed for a different world.

Liquid biopsy is one such advance. Dennis Lo, associate dean of research at the Chinese University of Hong Kong’s faculty of medicine, has been at the forefront of developing this innovative procedure, which allows tumours to be identified without invasive surgery.

“Previously we had to stick a needle in or cut open the body to obtain tumoral tissues for testing, but now we have found that cancer cells release DNA into the bloodstream, so by sampling the blood you can get biopsy information from the fluid — and that concept has now been generalised to other fluids in the body,” says Lo.

With the burden of cancer growing rapidly in many Asian countries as populations age, such technologies have the potential to improve treatment and reduce mortality rates, but insurers need to be prepared.

“The challenge for the insurance industry is potential over-treatment and over-diagnosis,” says Sohila Kwan, head of health and medical solutions for Asia at Swiss Re. “That’s not great for the customer if it makes the product unsustainable, but it’s also an opportunity for us to be developing new products.”

Lawmakers in Asia are already behind the curve when it comes to regulating how certain medical advances should be treated by the insurance industry, particularly in the area of genetics. Retail tests are already available for home use, but will people who discover potentially harmful mutations through such tests be required to disclose this information to their insurers? Would such a disclosure trigger a congenital exclusion?

Insurers in the US are already prohibited from denying health insurance in such cases, but most of Asia has yet to regulate in this area.

Ageing is another critical challenge that insurers are trying to find new solutions for. As societies become older, insurers are exploring better ways of understanding risk factors beyond simple measures such as chronological age. With upwards of 15% of many populations now in the 65-plus category, this is an increasingly important distinction to be able to make. Some 70-year-olds are significantly healthier than others.

“In markets such as Japan and China, we see health insurance products that are being issued not on chronological age but based on health and wellness, where you fill out a questionnaire about how active you are, your body vitals and it gives you your equivalent health age and that feeds into the premium you pay,” says Kwan. “So the industry is recognising that people are trying to make efforts in health and wellness. It’s not just about paying claims.”

Indeed, the health and wellness industry (outside of the insurance sector) is already a US$500 billion market, says Kwan, and is forecast to grow to US$700 billion during the next five years. This reflects a growing interest in preventive health that may one day help to reduce the incidence of affluence diseases. And Lo predicts that we will soon be able to measure the effects of such lifestyle changes in a more accurate way than the current methods insurers are using.

“We use chronological age as if it’s a clock that runs at the same speed for everyone, but biologically we know that’s not the case,” says Lo. “One thing we’ve been thinking about is that, perhaps in the future, instead of chronological age, maybe you can measure a biological age by how your genome degrades — and then that might also impact on how you calculate premiums.”

As Asia gets richer and older, such advances will be needed to help design insurance products that are affordable and sustainable, as well as throwing light on the most effective preventive measures. Our genome is a pre-existing condition, but it is not destiny.