A health timebomb could act as a drag on the Island’s economic recovery, according to a new survey by financial services firm Morgan Stanley.

The research headed by a Morgan Stanley economist said that sugar consumption was fuelling increased rates of obesity and diabetes worldwide — and would impact global growth.

And Island insurers said Bermuda had the highest rate of diabetes in the world with 13 per cent of the population affected and an estimated 8,000-9,000 people suffering from lifestyle and diet-linked Type II diabetes.

The Morgan Stanley report said that sugar consumption was a major culprit in both diabetes and obesity — and the worldwide taste for a sugar rush could cut productivity by more than 18 per cent over the next 20 years.

The research was backed by Island health insurers — who said the cost of treating diabetes was “astronomical”.

Michelle Jackson, executive vice-president for group insurance at Argus, said: “Type II diabetes is a serious epidemic that Bermuda is facing.

“However, the problem is not just in Bermuda, the world is facing a Type II diabetes epidemic.”

And she added: “The financial and non-financial cost of this disease is astronomical.”

The Morgan Stanley report, headed by London-based economist Elga Bartsch, found that sugar consumption was a major culprit in spiralling rates of the disease.

And it warned that global economic growth — expected to be 1.8 per cent a year for the next two decades in Organisation for Economic Cooperation and Development (OECD) countries — would drop to 1.5 per cent when the sugar-related drag was included.

The report said that high obesity nations would be the biggest losers — with Chile, the Czech Republic, Mexico the US and Australia likely to be affected most.

Morgan Stanley said there was “burgeoning evidence” that sugar consumption was on the decline in developed countries, but on the rise in emerging economies, driven by wider and cheaper availability of sugar-filled products.

And it warned that “sugar’s contribution, directly or indirectly, to the diabetic and obesity epidemic can likely be mitigated only via a combination of collective policy-driven and individual behavioural changes”.

Ms Jackson said that Argus had introduced Thrive — its own healthy living programme in a bid to cut down on the rates of preventable disease.

She added: “We are looking to equip our customers and the community with the tools and knowledge to help make choices that improve our health and enhance our lives.”

BF&M vice-president Holly Flook said it was difficult to quantify the cost of diabetes to Bermuda due to a lack of data and lack of standardisation in insurance code systems.

But she added that — based on a worldwide figure of nearly 11 per cent of healthcare expenditure going to treat diabetes — estimates could be made.

She said: “If we take that and look at Bermuda’s $705 million annual spend on healthcare, at a minimum, we’re looking at $78 million on diabetes alone.”

Ms Flook added: “We do believe the diabetes rate is higher, but published statistics show 13 per cent.”

She said: “In the US, one out of every five dollars of expenditure on healthcare is attributable to diabetes — but the prevalence of diabetes is lower than in Bermuda.”

And she said that costs not directly attributed to diabetes — like prescriptions and expenditure on eye problems associated with the disease — would increase the real cost of care.

Ms Flook added: “There are direct and indirect costs that filter through that number — it’s not just medical expenditure.”

And she said: “Diabetes is a killer — literally and figuratively. It’s an economic killer, it lowers life expectancy and affects quality of life.”