It is fair to say that the coronavirus pandemic has had a huge impact on the protection market. Whilst much of the focus has been on income protection which is  the most affected benefit type, it is expected that claims will also rise for  life and critical illness. This isthe first of a two part analysis,in which our panel of independent medical experts have look in detail at the effects of coronavirus on an infected person and particularly focus on the conditions covered within critical illness policies that might see an increase in claims due to hospitalisation. The second part of this study will be published next week.

How does the virus attack the body?

As anyone that has followed the coverage of the pandemic will know the virus mainly affects the respiratory system. Below our  independent medical experts explain in more detail how this can progress:

In most cases, the virus sits in the upper respiratory tract and causes only mild symptoms, such as a sore throat and a dry cough, which often resolves quickly. The Chinese Centre for Disease Control and Prevention, investigated 44,415 cases to establish the spectrum of disease and found that 81% had only these mild symptoms. They found that 14% went on to have more severe cases requiring hospital admission and 5% were critically ill. Up to a quarter of those that are hospitalised with this disease require an Intensive Care Unit (ICU) admission, which is approximately 5-8% of the total affected population.

In the 19% of cases that are more severe, the virus tracks down towards the lungs. The virus enters two types of cells here; goblet cells which produce mucous, and cilia cells that have hairs on them to move debris out of the lungs. The virus takes over these cells and replicates within them. The cells become overwhelmed and die, releasing more of the virus into the surrounding lungs. This causes fluid to accumulate in the lungs and makes breathing difficult.

In those that become critically ill, the body’s own immune system goes into overdrive and responds by producing large quantities of white blood cells and chemicals, such as cytokines. This produces even more fluid to leak into the airways and damage healthy cells. Furthermore, bacterial pneumonia can also take hold as the immune system fails to keep up.

Ultimately, this can lead to Acute Respiratory Distress Syndrome (ARDS), which is a life threatening type of lung failure where not enough oxygen can be supplied to other vital organs. Mechanical ventilation is often necessary and studies show this is required for between 42-100% of patients that are critically ill.

What are the risk factors associated with severe illness?

In terms of risk factors there are three main factors that have a big impact on the seriousness of the virus, age, gender and comorbidity (i.e. the presence of one or more other condition in the affected patient) as our practitioners explain:

The major risk factor that is present across all data is advanced age, although it can occur in otherwise healthy individuals of any age. A study from the USA, showed that 80% of deaths occurred in those aged over 65 years of age. Fatality rates were highest in persons aged ≥85 (10% to 27%) and decreased in younger age groups; 65–84 years (3-11%), 55-64 years (1% to 3%), 20–54 years (less than 1%).

Comorbidities have also been associated with more severe illness and mortality. These include;

  • Cardiovascular disease
  • Diabetes mellitus
  • High blood pressure
  • Long standing lung issues
  • Cancer
  • Long standing kidney issues

An Italian study on COVID-19 deaths showed that only 3% of patients that died had no underlying medical condition. The mean number of pre-existing conditions in the same study was 2.7.

Being male also appears to be a risk factor for deaths when looking at data from China, Italy and the United Kingdom. Around 75% of patients in the Chinese cohort were males, which is similar to recently released ICU data in the UK.

Why the survival period matters

Before considering the conditions that are most likely to be affected, advisers should be aware that most critical illness policies have a minimum survival period. This is a period of time that the insurer dictates that the client must survive after diagnosis of a condition in order for a claim to be paid. This is particularly pertinent in the case of coronavirus, as only the seriously affected will go on to have a condition that might be covered by a critical illness policy and the death rate in this segment is relatively high.

If the policy is set up on a life with accelerated critical illness basis, the survival period is irrelevant as there is one policy that pays out the earlier of a critical illness or death and unless it is an additional condition that the client is claiming for the cover will cease on earliest event. If however, the client has life and critical illness or a standalone critical illness plan without life cover, their family may not be able to claim on the critical illness element if they die before the survival period finishes. Below we highlight the survival period for each insurer for both adult and child cover:

*AIG (non key 3 critical illness products) and Legal & General do not offer a standalone critical illness benefit and therefore have no survival period for adults. LV= have no survival period for children

Conditions that are linked to hospitalisation are most likely to be affected

Whilst there are a range of conditions covered by critical illness plans that could be triggered by coronavirus, insurer criteria for payment means that most will not qualify for payment (we will cover more on this on Tuesday). This means that the most likely pay-outs from critical illness plans will come from conditions that are closely linked to hospitalisation.

Intensive care comes top of this list as explained by our medical practitioners below:

“The commonest condition that would likely result in a successful critical illness claim, would be through an intensive care wording. This usually stipulates mechanical ventilation for 7 or 10 consecutive days (24 hours a day). Around 5% of those afflicted by COVID-19 may require intubation and mechanical ventilation. Reports from ICU experts and audit data from around the world suggest that many patients remain on mechanical ventilation for well over 14 days. Mortality rates are also high following ITU admissions and are approximated at around 50% for those with ARDS, and even higher for those that have received mechanical ventilation.

Most data currently available is from China, Italy and the USA, where large outbreaks have occurred. On the 4th of April 2020, The Intensive Care National Audit and Research Centre (ICNARC) released data on admissions to Critical Care Units (CCU) in England, Wales and Northern Ireland related to COVID-19. They had received data from 2249 patients. Interestingly, approximately half of these admissions were aged under 60 years of age and 73% were males. Also, 62.9% of admissions had received mechanical ventilation within the first 24 hours of arrival.

As the crisis is still emerging in the United Kingdom, few of this cohort have completed their critical care admission, so calculating outcomes is difficult presently. The analysed data up until 3rd April, 346 patients had died, 344 had been discharged alive from the unit and 1559 were still in critical care. This also demonstrates that many admissions are for a prolonged period. The latest audit data from the UK shows that the median number of days that patients are on advanced respiratory support for is six days. Unfortunately, this is only calculated from the patients that have died or been discharged from the critical care unit. As this is an emerging epidemic and the majority of patients have not completed their critical care, this will likely significantly under-represent the length of admission and how long someone is on organ support.”

As highlighted insurers that cover intensive care will pay out after a period of either 7 or 10 days of mechanical ventilation. Clearly those with the lesser period are likely to pay more claims and below we have highlighted which plans currently offer this and the period of intubation required.

 

AIG
Aviva
Canada Life
Guardian
Legal & General
Royal London
Scottish Widows
Vitality
Zurich (Select Only)
Number of days on a ventilator
7
10
10
7
7
10
10
10
10
Amount Paid
100%
100%
100%
100%
100%
100%
100%
50%
100%

 

Alongside intensive care, the other condition that coronavirus may increase the risk of is Severe Sepsis. Unlike intensive care where the reasons for mechanical ventilation is not defined, insurer sepsis defintions as should be expected require the client to be diagnosed with the condition but only require a client to be in critical care for 3 consecutive days as out independent panel of medical practitioners explain:

“Sepsis, which is sometimes referred to as septicaemia or blood poisoning, is where an infection can cause the immune system to overreact and damage other organs and tissues. Some insurers have started to cover sepsis if there has been an intensive care unit admission for a shorter period than within intensive care definitions, i.e. three continuous days.

Sepsis, shock and multi-organ failure are all complications that occur with COVID-19. Therefore, if a patient was discharged from an ICU prior to the 10 day period mentioned previously, they may still qualify for a lesser payment related to sepsis.”

Currently only four insurers cover severe sepsis within their critical illness policies and the amount that would be paid if a client successfully met the criteria differs as shown below:

 

AIG
Canada Life
LV=
Vitality
Is Sepsis covered
Y
Y
Y
Y
Amount paid
50% of the sum assured up to £35,000
25% of the sum assured up to £25,000
100% of the sum assured
15% of the sum assured

 

As the coronavirus pandemic continues to spread across the UK it is clear that the protection market will see an increase in claims with Income Protection (a particularly policies that have a short deferred period) being the most affected. With the number of deaths increasing daily there will also be an increase in life assurance claims. As highlighted however the critical illness market may also see an increase in claims with those that require critical care and survive potentially being able to claim. Our next insight considers some of the complications of suffering from coronavirus and the potential of being able to claim on a critical illness policy if the virus leads to other serious conditions.

To read part 2 of this article click here

 

5 Comments

  1. Mike Cooke

    Very interesting research, thank-you for the post

    Reply
  2. Amanda Clancy

    Makes fascinating reading and most helpful.

    Reply
  3. danielle jeans

    fantastic read

    Reply
  4. Harvey kambo

    Great insight and very helpful read – an area we’ll need to help some of our clients with in the coming weeks and months, I’m sure.

    Reply
  5. rod freeman

    Great article and look forward to part two.

    Probably worthy of note that Scottish Widows latest wording reduced mechanical ventilation by means of tracheal intubation from 10 to 7 consecutive days. This came out in Jan 2020 though so few policyholders may be on this version.

    Reply

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