South Africa

Increasing access to cancer care: A Targeted Therapy Rider benefit

Case study:

South Africa

Increasing access to cancer care: A Targeted Therapy Rider benefit

The product

The EXACT Rider benefit is an optional benefit on PPS’s critical illness cover. Launched in February 2021 as a result of a partnership between PPS and Hannover Re, the EXACT Rider benefit pays out an additional lump sum if the patient’s cancer is shown by genomic testing to be susceptible to targeted therapy treatment.

The need

Many existing insurance products fall short for patients with cancer diagnoses: some exclude new treatments, while other policies pay a lump sum but then terminate, leaving patients facing out-of-pocket spending in the event of cancer returning or being found to have progressed.

What is new?

Provides payments to fund targeted therapy treatment
Uses genomic testing to determine suitability for targeted therapy and eligibility for additional insurance payouts

South Africa has a reputation for innovation in the life and healthcare insurance markets. Where it has led – for instance by incentivising healthier lifestyle choices – other countries have followed. With a new critical illness product enabling patients to access emerging targeted therapies, could South Africa again be at the forefront of a new wave of innovation in healthcare?

South Africa’s private health insurance landscape consists largely of voluntary medical aid schemes. “Yet only a handful of top-tier medical scheme options cover the costs of targeted therapy, meaning that many cancer patients on lower options face significant out-of-pocket payments which may be unaffordable,” explains Maseeha Rawat, Actuarial Analyst at Hannover Re. The EXACT Rider benefit was developed to close these insurance and affordability gaps.

A policy that provides access to emerging cancer treatment

Apart from medical aid scheme cover, South Africans can also purchase life insurance products, including critical illness cover. These products cannot legally provide reimbursement for the cost of treatment, but rather pay out lump sums which may be used as the policyholder sees fit.

That is the model used for the EXACT Rider, an optional benefit on the critical illness cover offered by PPS, a mutual financial services company focused on professionals. On top of the core critical illness payout on cancer diagnosis, individuals who have purchased the EXACT Rider can unlock an additional payout if genomic testing shows targeted therapy to be a suitable treatment for the patient.

It is an innovative way of providing access to targeted therapies – and a first in South Africa, says Rawat. Targeted therapy is not suitable for every cancer patient, so a genomic test is essential. “The life insurance industry has long debated the use of genomic testing as there are ethical concerns around potential discrimination,” says Rawat. “In this case, I believe we found a beneficial way to use genomic tests in the life insurance space that meets genuine policyholder needs and helps patients get better outcomes.”

“The life insurance industry has long debated the use of genomic testing as there are ethical concerns around potential discrimination. In this case, I believe we found a beneficial way to use genomic tests in the life insurance space that meets genuine policyholder needs and helps patients get better outcomes.”

Maseeha Rawat,

Actuarial Analyst, Hannover Re

Data takes insurance to a new level

The EXACT Rider could not have happened without innovative use of data to quantify emerging market needs.

“The entire field of data is moving away from pure risk assessment to understanding the expectations and needs of policyholders, which enables us to design products that are much more targeted and specific,” explains Soeren Kruse, Head of Business Acquisition and Development for Hannover Re.

Hannover Re partnered with a leading pharmaceutical company that manufactures targeted therapies to answer critical questions such as:

What are the chances of eligibility for targeted therapy and success of the treatment?

What is the usual duration of treatment?

What are the actual costs of these targeted therapies, and what level of payout would be a good match for covering the cost of treatment?

These factors are seldom taken into account in classical life insurance product development and pricing. Where insurers have mainly focused on incidence levels of different conditions when developing critical illness cover in the past, a data-rich approach was taken in developing the EXACT Rider. “It's really a quite drastic change in how we develop products as we have moved beyond the pure risk of cancer occurring, to considering eligibility for and expected cost of these innovative treatments,” says Kruse.

Every market is different

The EXACT Rider has proved popular, with over 2,500 benefits sold by PPS in its first six months. But could it work in other markets?

“Our philosophy is never to say, ‘Look, it worked in this market, so let's implement it worldwide’,” says Kruse. “Every market is different, and that's where we would always start: looking at the actual policyholder need and seeing what the customer journey could look like.”

“Every market is different, and that's where we would always start: looking at the actual policyholder need and seeing what the customer journey could look like.”

Soeren Kruse,

Head of Business Acquisition & Development, Hannover Re