Obesity is set to become the major investment theme over next 25-50 years as amount of overweight people has tripled global over last 30 years says latest research note by Bank of America Merrill Lynch.
“By 2008, c.500mn people over the age of 20 were obese. The prevalence of overweight and obese individuals was highest in the Americas (62% overweight in both sexes, and 26% obese) and lowest in South-East Asia (14% overweight in both sexes and 3% obese). In Europe, the Eastern Mediterranean and Americas, over 50% of women were overweight. In all three regions, approximately half of these overweight women were obese (23%, 24% and 29%, respectively),” writes BofA that was penned by Sarbjit Nahal, Valery Lucas-Leclin and John King.
They say that overweight people, which includes the obese ones, carry 15 million tons of extra weight which amounts to 242 million of normally weighted folks. Of this number, the obese carry 3.5 million tons, equivalent to 56 million people.
All of this extra global fat “would pose significant cost challenges to the longterm financial viability of public and private health insurance programmes, as spending growth outstrips revenue growth.” In fact, BofA says that these costs are underestimated not just in health care but costs associated with servicing so many fat people.
For example, BofA says that fat folks push up food and fuel costs offsetting gains in food production and airline and car efficiencies; they produce more excretion which adversely impacts environment and cause increased safety issues.
“With over 80% of US citizens having health insurance coverage, there is a clear incentive for insurers to promote obesity diagnosis, screening, treatment and prevention to reduce medical claims and costs. That said, insurers do not consistently pay for obesity prevention and treatment unless there are comorbidities. Given the nature of the problem, obesity prevention should arguably be considered a core service similar to cancer prevention and counseling,” write authors.
As a result, BofA recommends drug firms, athletics, health and medical stacks (see table).