Life and health insurers are the most exposed to the rise in global obesity levels, but the effects will spread to the property and casualty markets, warned investment bank Dresdner Kleinwort Wasserstein (DrKW).
In a new report, DrKW warned that the consequences of rising obesity rates would affect the insurance industry in terms of rising liability claims, as well as higher disability and medical costs.
DrKW said life and health insurers had the biggest potential exposure due to slower improvements in mortality rates, higher disability and medical costs that had been expected or priced for.
But it also warned that food manufacturers and outlets, along with their insurers and reinsurers were potentially exposed to liability claims over obesity.
“Litigation is in its infancy in the US and may remain so if personal responsibility arguments hold. But if contributory negligence or misrepresentation are found in the courts, this could change.”
The report drew parallels with the wave of litigation surrounding the tobacco industry.
The report, prepared by DrKW's European insurance research team concluded: “It seems that the obesity issue is only just coming to the fore of policymakers' concerns.
“Parallel with this, US plaintiff lawyers are developing litigation strategies that may not be too dissimilar from those used for tobacco.
“It is too early to forecast how obesity may develop for insurers, but we do not expect the issue to go away any time soon despite 'common-sense' arguments, and, given the potential enormity of the issue it is one to watch.”
