Nearly One-Third of Life Insurance Companies Classify Marijuana Users As Non-Smokers, Finds Munich Re Survey

ATLANTA, June 2, 2015 /PRNewswire/ -- Nearly one-third (29 percent) of life insurance companies with an underwriting policy in place for marijuana users classify those individuals as non-smokers, according to a survey by Munich American Reassurance Company, a unit of Munich Re, one of the world's leading reinsurers. The survey of life insurance underwriters was conducted at the Association of Home Office Underwriters (AHOU) 14th Annual Conference, held April 26-29, 2015, in Washington, D.C.

Of the life insurance companies represented, one in five do not have an official underwriting policy in place for marijuana users. For those respondents whose company have not yet implemented a policy, 42 percent expect their respective employer to do so within 12-36 months. Further, 29 percent believe it will take less than 12 months to develop such a policy and 26 percent feel it will take more than 36 months.

"Despite a legalization movement across the country, scientific studies on the long term effects of marijuana use are mixed," said Bill Moore, Vice President of Underwriting and Medical for Munich American Reassurance Company. "As a result, the life insurance industry is left with more questions than answers, making it crucial for companies to manage risk appropriately."

Among the nearly 150 underwriters surveyed, 36 percent believe marijuana users are non-smokers despite growing concerns around respiratory issues. In fact, nearly half (49 percent) of the underwriters polled believe there is no different in risk between underwriting a marijuana user who smokes the drug and a user who ingests it. Additionally, 43 percent felt smoking marijuana presented more risks than ingesting it, while only 8 percent viewed ingesting marijuana as more risky.

From an underwriting perspective, 43 percent of respondents believe frequency of use is the most important factor when underwriting marijuana users, followed by an individual's medical history (37 percent), age (14 percent), and current state of health (6 percent).

"Historically, life insurance companies and their underwriters have erred on the side of caution with respect to marijuana use, given the uncertainty surrounding the drug," added Mr. Moore. "However, as our survey results indicate, a significant number no longer jump to classify marijuana users as smokers. Instead, they are placing a strong emphasis on frequency of use and medical history to determine rates."

Methodology

The survey was conducted on-site at the Association of Home Office Underwriters (AHOU) 14th Annual Conference in Washington, D.C. from April 26-29, 2015, and is intended to represent the views of 148 underwriter attendees, primarily from life insurance companies, who participated in the in-person interviews.

Munich American Reassurance Company, founded in 1959, is one of the largest reinsurers in the U.S. offering life and disability reinsurance to insurance companies throughout the United States.  The company also writes group, credit and other reinsurance products. Headquartered in Atlanta, with an office in Chicago, Munich American is licensed, accredited or authorized in all fifty states; Washington, D.C.; Guam; and Puerto Rico.   

Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2014, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.2bn on premium income of over €48bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €27bn from reinsurance alone, it is one of the world's leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2014, ERGO posted premium income of €18bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re's global investments amounting to €227bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.

Disclaimer
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.

SOURCE Munich Re

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