A few years ago the science of regenerative medicine appeared more science-fiction than science fact. The idea that you could combat the ageing process and heal untold common conditions by coercing cells into a regenerative state seemed far-fetched at best. In 2015, the outlook is considerably brighter for this form of medicine but what will be the impact on the insurance industry?
What is Regenerative Medicine?
There isn’t one “single therapy” that serves as a catch all for regenerative medicine. It includes cellular therapy, stem cell manipulation, and genetic manipulation. The idea is simple, it’s to reset or repair the cells themselves so that conditions such as cancer, degenerative diseases, chronic/fatal conditions, etc. can be undone.
In the last two years, there’s even been a substantial amount of new research which suggests that ageing itself may be stopped or even reversed with the right treatments.
From an individual perspective these advances should be welcomed. While they almost certainly don’t equate to the ability to live forever, they will certainly lead, in the medium to long-term, to increased longevity. It’s possible that human beings will be able to live active healthy lives beyond the age of 100 or even up to the age of 200.
However, these developments also mean that insurers need to start asking some questions about how they will deal with this new world.
Currently, the majority of developments in regenerative medicine are coming out of the West. Health insurers are reluctant to pay out for treatments that are of uncertain benefit to their recipient. The treatments are very much still in the research phase at the moment.
As these treatments become proven, it’s going to be harder for health insurers to refuse treatment. As with all new treatments, regenerative medicine is likely to be costly. This means that insurers are going to need to start reviewing health insurance policy premiums and deciding how such treatment will be handled under the policy. We’d expect to see exclusions on the use of these kind of treatments as well as higher premiums for those who want to access regenerative medicine via their policies.
There’s also the issue of life insurance and pensions. If people are going to be living longer, there is going to be less risk of death on an annual basis. However, there’s also going to be an expectation that benefits are going to be paid for longer periods (today’s retirement ages of 60-70 in the West look hopelessly optimistic in a generation that might live to 150, for example) and that life policies will need to continue for longer too.
The good news is that the industry has time to consider its position regarding regenerative medicine. It will be a decade or more before truly proven techniques hit the market, thanks in part to the long period of review and testing required for medical developments. There is also the issue of complexity of these treatments which is currently keeping investment from the healthcare industry at a lower rate than the potential of these treatments suggests. However, once the benefits are proven for a single treatment – we’d expect to see a very quick move to boost investment particularly if it is clear what the financial returns on such an investment will be.
Given that longevity is a key motivating factor for the entire world; we think it’s clear that one day in the not too distant future – regenerative medicine will require a complete shake up of how we approach the world and how insurance approaches its customers.