Insurers could face much higher claims from life and health policies or legal liabilities if they fail to test their products on diverse populations, Swiss Re has warned.
And it suggested that if this diverse testing could not be guaranteed then insurers should be using a more cautious underwriting approach.
Greater awareness of diverse populations has been a key issue in society and the financial services industry over the last year, with much of this focus from the industry on workplaces and customers.
However, as part of its annual Systematic Observation of Notions Associated with Risk (SONAR) report, Swiss Re warned insurers must also use diverse populations when testing new products to ensure they are suitable for all potential customers.
The reinsurer added that failing to do so could leave insurers open to liabilities if things go wrong, or to much higher claims in life and health policies through product flaws.
Hidden risks
“Age, gender and physical properties are not the only issues. Genetics, lifestyles and other factors also make people different. In certain fields, notably health, these are important considerations,” it said.
“For instance, a recent study showed that women are more than twice as likely to experience adverse side effects to medications than men.
“The side effects range from mild symptoms like nausea and headache to serious problems including cognitive abnormalities, seizures, hallucinations, agitation and cardiac issues.”
The report noted that historically, it has been more usual for men to participate in clinical drug trials than women, but at rest metabolism in women is typically slower than in men.
This means dosage levels determined by study results on men can be too high for women.
“These examples highlight the hidden risk of safety trials, where the trial population does not represent end-users,” Swiss Re continued.
“For insurers, particularly in fields where product use could lead to bodily injury or health impairment, risk assessors should fully investigate the data set used by regulators as the basis for product approval.
“If test populations are not representative of end-user groups, a more cautious underwriting approach makes sense. This is especially so where potential for serial losses exists due to fast roll-out of new products to many consumers,” it concluded.
The Swiss Re report also warned about the likely significant fall out from Covid-19 on global populations through shorter lives and increasing disability and critical illnesses.
And highlighted that insurers must be wary of the risk of legal action being brought due to inappropriate advice provided by health technology and apps, including wearable devices.