03
Implications for underwriting
15 mins
Key takeaways
SUMMARY:
The diversification of nicotine products calls for more nuanced underwriting, verification, and pricing approaches to accurately reflect differing risk profiles.
Some facts and figures:
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Binary smoker classifications are increasingly strained
Treating all nicotine exposure as “smoker” or “non-smoker” can misalign classification and pricing.
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Risk varies meaningfully within the intermediate group
Product type, age at initiation, dual use, frequency, and comorbidities all shape risk.
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New biomarkers can improve risk differentiation
Anabasine and NNAL help distinguish tobacco and combustion exposure beyond cotinine.
The emergence of alternative nicotine products creates significant challenges for traditional underwriting approaches. Classifying all nicotine exposure as “smoker” risks over-penalizing some exposures, while treating non-combustible products as equivalent to non-smoking risks underestimating morbidity and mortality.
A more refined underwriting approach may require moving beyond binary classification to capture key drivers of risk within the intermediate group, including:
- Product type: e-cigarettes, heated tobacco, smokeless tobacco, nicotine pouches, cannabis
- Age at initiation: earlier initiation is associated with higher addiction potential and long-term use
- Dual or poly-use: concurrent use increases total exposure and transition risk
- Frequency and duration: repeated discrete use may result in high cumulative nicotine exposure
- Comorbidities: cardiovascular, pulmonary, or mental health conditions may amplify risk
Underwriting questionnaires could, in some cases, be adapted to better capture these dimensions. Behavioral science informed question design is critical to improving disclosure accuracy, particularly for products perceived as low risk.
Verification and the role of emerging biomarkers
Cotinine remains useful for confirming recent nicotine exposure but is insufficient as a standalone marker in the current landscape. Additional biomarkers offer opportunities to refine risk assessment.
View Summary
Anabasine is a naturally occurring minor alkaloid found in tobacco. Its presence in urine reflects exposure to tobacco-derived nicotine rather than synthetic nicotine or pharmaceutical nicotine replacement therapy. Levels of anabasine tend to be higher in individuals who smoke cigarettes or use other tobacco-based products and are typically absent or very low in exclusive users of e-cigarettes, nicotine pouches containing synthetic nicotine, or nicotine replacement products. 18, 19 As such, anabasine can help distinguish combustible or tobacco-based nicotine use from non-tobacco nicotine exposure.18, 19
NNAL is a metabolite of a tobacco-specific nitrosamine and serves as a biomarker of exposure to carcinogenic compounds associated with tobacco processing and combustion. Unlike cotinine, NNAL reflects exposure to tobacco-specific carcinogens rather than nicotine itself. NNAL levels vary meaningfully by product type: they are highest in cigarette smokers and smokeless tobacco users, lower in heated tobacco product users, and typically very low or undetectable in exclusive e-cigarette and nicotine pouch users. 20, 21 This makes NNAL particularly useful for identifying exposure to higher-risk tobacco products and combustion-related carcinogens. 29,30
Incorporating these biomarkers into verification strategies may improve differentiation between combustible tobacco, alternative nicotine products, and non-use, supporting more accurate classification and pricing as nicotine use patterns continue to diversify.
DNA methylation signatures are emerging as markers of cumulative exposure to combusted tobacco, demonstrating clear dose response relationships with smoking intensity and total lifetime exposure. These epigenetic patterns appear to be strongly associated with combustion-related toxicants and show gradual reversibility following cessation, offering potential future insight into chronicity rather than only recent use.22, 23
Although DNA methylation is currently more relevant in clinical and research settings, it represents a potential future direction for more precise assessment of cumulative smoking risk.
Pricing considerations and longer-term risk management
Pricing frameworks have not yet evolved to systematically incorporate an intermediate risk group that sits between smokers and never-smokers. While long-term outcome data are still emerging, early cardiovascular, metabolic, and respiratory signals suggest that treating this group as risk-neutral may underestimate future risk.
Failing to differentiate risk appropriately may lead to anti-selection, experience drift, and delayed recognition of emerging morbidity and mortality. Conversely, overly punitive pricing may discourage disclosure and undermine trust. Striking the right balance will require ongoing monitoring, regional flexibility, and alignment between underwriting, pricing, and medical governance.
Pricing does not yet reflect an intermediate risk group.
Given regulatory, cultural, and market variability, approaches to classification and pricing will necessarily differ across regions. Insurers may therefore need to consider how best to incorporate alternative nicotine and smoking products within their local underwriting and pricing frameworks.
Life Guide will also continue to evolve to incorporate these considerations in upcoming updates as long-term evidence emerges, including how alternative nicotine and smoking products influence the risk of specific medical conditions, such as pulmonary disease, integrating available evidence to support updated and accurate underwriting decisions.
Strategic implications for insurers
The rapid evolution of nicotine and smoking products represents a structural shift in exposure rather than a transient trend. If alternative products sustain addiction, normalize long-term use, or result in chronic disease, insurers may face renewed pressure on mortality and morbidity assumptions over time.
Addressing this challenge requires proactive adaptation rather than reactive adjustment once claims experience emerges. More nuanced classification, improved verification, and continuous evidence monitoring will be essential to align risk assessment with modern nicotine use and to protect the long-term sustainability of insurance portfolios.
Main insights
View Summary
- Alternative nicotine products are not risk-free and should not automatically be classified as non-smoker use.
- Emerging evidence supports a heterogeneous intermediate risk group between smokers and never-smokers.
- Binary smoker definitions and cotinine-only verification are increasingly insufficient.
- Underwriting questionnaires must evolve to capture product type, use patterns, and dual use. Applying behavioral science is critical to designing questions that elicit accurate and reliable responses.
- Additional biomarkers such as Anabasine and NNAL may enhance risk differentiation.
Additional information
References
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18. Colsoul, M.L., et al., Novel proposed cutoff values for anatabine and anabasine in differentiating smokers from non-smokers. Clin Biochem, 2023. 116: p. 128-131.
19. Bendik, P.B., et al., Anabasine and Anatabine Exposure Attributable to Cigarette Smoking: National Health and Nutrition Examination Survey (NHANES) 2013-2014. Int J Environ Res Public Health, 2022. 19(15).
20. Xia, B., et al., Tobacco-Specific Nitrosamines (NNAL, NNN, NAT, and NAB) Exposures in the US Population Assessment of Tobacco and Health (PATH) Study Wave 1 (2013-2014). Nicotine Tob Res, 2021. 23(3): p. 573-583.
21. Benowitz, N.L., et al., Biochemical Verification of Tobacco Use and Abstinence: 2019 Update. Nicotine Tob Res, 2020. 22(7): p. 1086-1097.
22. Maas, S.C.E., et al., Validated inference of smoking habits from blood with a finite DNA methylation marker set. Eur J Epidemiol, 2019. 34(11): p. 1055-1074.
23. Andersen, A., et al., DNA methylation differentiates smoking from vaping and non-combustible tobacco use. Epigenetics, 2022. 17(2): p. 178-190.
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