Obesity has surged to the forefront of global health concerns, with prevalence more than doubling in adults and quadrupling in children since the 1990s. While the burden of obesity is likely to continue its upward trajectory in future years, this will be kept in check by greater investment in and uptake of weight management interventions, particularly AOMs, as well as continued innovation in other obesity treatments and primary prevention approaches.
In the new report ‘Weighing up the future: The value of weight management’, LCP experts Mei Sum Chan, Sreenidhi Venkatesh and Stuart McDonald analyse how, from an actuarial perspective, effective weight management will have implications on insurance, pension schemes and public policy.
They argue that actuaries involved in forecasting, financing or contingency planning will need to assess and monitor the future burden of obesity and weight management. For pension schemes and insurers, they believe that AOMs should be treated as an emerging risk, with regular horizon scanning of regulatory approvals and real-world evidence about uptake and effectiveness, and annual recalibration of morbidity and mortality assumptions.
Other key points in the report, which is part of the IFoA’s ‘think’ series, are:
• Extended life expectancy from AOMs may challenge pension schemes and annuity providers to reassess funding reserves and longevity assumptions, with insurers needing to adjust pricing as new data emerges.
• Pension schemes planning to run on should evaluate how AOMs and medical advances affect technical provisions and consider longevity risk protection.
• Affluent scheme members may experience less impact from AOMs, as the current burden of obesity is typically lower; conversely, private access to these drugs could mean greater benefits for wealthier individuals.
• Long-term care providers face uncertainty as people live longer with obesity-related conditions, affecting the duration and nature of care needed.
• As weight management is currently financed through a multi-payer patchwork, cross-sector collaboration and knowledge exchange between healthcare providers, policy makers, and financial institutions will be crucial for the prevention and management of obesity. Continuing efforts in these areas will enable more of the broader value of weight management to materialise.
Stuart McDonald, Head of Longevity & Insights at LCP and one of the report’s authors, commented: “For actuaries, this marks a structural inflection point. The role of expert judgement will come ever more to the fore when setting actuarial assumptions, and pension schemes and insurers will need to revisit and monitor these assumptions as new data emerges.”
Dr Jonathan Pearson-Stuttard, Head of Health Analytics at LCP, added. “While the health impacts of obesity are well-known, its wider economic and societal impact is often overlooked. But with a growing body of research into how health conditions shape economies and communities, policymakers should take into account obesity’s influence on social and economic policy.”
Paul Sweeting, IFoA President, said: “The IFoA’s ‘Think’ thought leadership series is designed to spark fresh thinking and open up debate on the issues that matter — to both actuaries and to wider society. Weight management is a complex challenge, and it is an important area of discussion given the global health concerns associated with obesity. Stuart McDonald, Mei Sum Chan and Sreenidhi Venkatesh’s expertise provides us with excellent insights into how weight management impacts areas of actuarial work, from health and social care to pensions, insurance and government. This timely piece is a great example of the actuarial profession’s long-standing commitment to collaborating with leading experts to help shape a healthier, more sustainable future.”
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