Obesity Drugs and Insurance: Navigating Emerging Trends

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Author

Dr. Gina Guzman, MD, DBIM, FAAIM, FALU, FLMI
Vice President & Chief Medical Director
Munich Re Life US

March 2025

Obesity has long been a global health issue, tripling in prevalence since 1975. Forecasts predict that it will continue trending upward through 2035, by which point over half the world will be overweight. Despite efforts by the World Health Organization and public health entities to manage this crisis with diet, physical activity and lifestyle changes, chronic obesity risks and their adverse impact on mortality and morbidity also continue to rise. However, newer anti-obesity medications have the potential to reduce the prevalence of obesity, which could also materially improve life, disability and critical Illness portfolios.

Anti-Obesity Medications

Weight loss has been shown to improve adverse comorbid risks but can be challenging to achieve and difficult to sustain. Prior to 2021, FDA-approved drugs for successfully treating adults with obesity were limited. Newer options include glucagon-like peptide-1 (GLP-1) receptor agonists (RAs) like semaglutide (Wegovy) and dual-action GLP-1 and glucose-dependent insulinotropic polypeptide (GIP) receptor agonist tirzepatide (Zepbound).

Initially approved for type 2 diabetes, these drugs work by mimicking the hormone that stimulates insulin production, which lowers blood sugar levels. They also slow the movement of food from the stomach, reducing appetite and bringing on early satiety.

Studies have shown dramatic weight loss of 15 to 21 percent compared to placebo — results never seen before in previous anti-obesity medications.

Figure 1. Weight Loss Outcomes by Treatment Option

Source: Sean P. Heffron. Circulation Research. Treatment of Obesity in Mitigating Metabolic Risk

Mortality, Morbidity and Life Insurance

Ongoing studies are also revealing promising outcomes for cardiovascular disease, obesity-related cancers, fatty liver disease and other conditions.

Studies that evaluated this class of drugs specifically for obesity in nondiabetics showed not only favorable findings of proven weight loss but also added metabolic benefits such as improved cholesterol and blood pressure. In addition, in 2023, a landmark trial showed that semaglutide also produces a mortality benefit in overweight/obese patients with preexisting heart disease, as well as improving the risk of nonfatal stroke and myocardial infarction.

Weight loss drugs may also lower risk for as many as 10 cancers. According to medical research, GLP-1 RAs were associated with lower risk of obesity-associated cancers in patients with type 2 diabetes mellitus compared to those treated with insulin or Metformin. This is preliminary evidence for a potential benefit of GLP-1 RAs in reducing cancer risk.

Regarding fatty liver disease, which increases risk of cirrhosis and mortality, initial studies using liraglutide and semaglutide showed that GLP-1 receptor agonists were safe, well tolerated and led to improved body mass index (BMI), visceral fat accumulation, liver function tests, glucose intolerance and liver inflammation. And I believe there is more good news to come regarding certain neurological diseases and addiction disorders.

The potential impacts on mortality and morbidity could be huge for life, disability and critical illness insurers as these medications could not only stop or reverse the upward obesity prevalence trends, but also positively impact other medical conditions. With the literature expanding rapidly, insurers will need to stay ahead of developing research and potential insurance implications.

Analysis and Projections

Munich Re conducted an analysis to quantify a potential impact on insured portfolios over the next 10 to 20 years, basing it on U.S. data due to its high obesity prevalence and available population data.

We reviewed general population obesity prevalence by income status, various medical impairment risks and anti-obesity medication research, then used internal North American claims data to estimate the proportion of policyholders in each weight category to develop a proxy insured population.

Using a hypothetical scenario contingent of several key assumptions, our final analysis projects a 21 percent mortality reduction for nonseverely obese individuals and an impressive 40 percent reduction for severely obese individuals in the general population. If the key assumptions materialize, we forecast that 0.3 to 0.7 percent of the current expectation of future annual mortality improvement could be driven by the impact of obesity drugs improving the ongoing adverse obesity trend.

Calculating the impact of obesity on the disability and critical illness business lines is more complex given the wide range of obesity-related conditions and scarcity of comprehensive studies on the general population to examine the morbidity effects of weight loss after GLP-1 drug treatment.

Despite limited evidence suggesting that weight loss in obese individuals directly reduces the risk of developing comorbidities, clinical studies have shown improvement in those with certain medical conditions. For disability and critical illness claims related to diabetes, cancer and cardiovascular events, we expect a favorable impact similar to life insurance; however, the industry will have to wait until further evidence develops for a more concrete analysis.

Other Insurance Considerations

Medical research on these newer anti-obesity drugs has only revealed the tip of the iceberg regarding potential insurance impacts. Successful weight loss that includes post-treatment weight stability and resolution of any obesity-related comorbidities is clearly ideal.

From an underwriting perspective, key considerations include the duration of anti-obesity treatment, presence of comorbidities, assessment of side effects, and evaluation of weight trends over time.

From a pricing perspective, insurers must consider the impact these medications may have on future mortality and morbidity pricing assumptions, as the impact may be substantial.

Final Takeaways

Forecasts predict that the global prevalence of obesity will continue trending upward through 2035. Unfortunately, adverse health risks and associated metabolic dysfunction will also continue to increase, ultimately adversely impacting life insurers.
Literature on newer weight loss drugs shows dramatic outcomes compared to previous medications, and if studies show they can reverse the trends, the potential effect on mortality and morbidity could be significant.
Insurers must keep pace with emerging research and anticipate potential impacts on insurance.

Read the full Munich Re Life Science Report on obesity here, as well as the other chapters (AI in Healthcare, Improving Cancer Outcomes, Prevention and Climate Change).