2007 General Meeting Assemblée générale 2007 Montréal, Québec 2007 General Meeting Assemblée générale 2007 Montréal, Québec Canadian Institute of Actuaries Canadian Institute of Actuaries L’Institut canadien des actuaires L’Institut canadien des actuaires

Hot topics in Underwriting Josee Malboeuf Vice President Underwriting and Claims RGA Canada November 29, 2007

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Foreign Travel – A Canadian born in a foreign country is twice as likely to travel (will visit family) – There is a 8.5% increase in 2005 over 2004 for Canadians traveling overseas with most of them being for pleasure. – Are we being overly conservative? No claims…but hard to get full medical hx if treated out of the country – Decisions range from Std to decline depending on list of countries ie A, B, C, D and amount of time spent outside of North America. Traveling to “A” countries has increase by 22% since – Trend toward modifying travel question on the application…why do we need past travel history?

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Foreign travel (continued) – US legislation to ban question on Foreign travel. Companies need to have statistics to justify decision in order to make sure it is not discrimination. Will this approach cross the boarder? –Limited capacity available

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Capacity puzzle RETRO REINSURER 3 INSURER 1 CUSTOMER DISTRIBUTOR (Broker/Agent/other) INSURER 3 INSURER 2 REINSURER 2 REINSURER 1 RETRO

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Capacity –Higher face amount –How much does the industry really need? –How is capacity provided in the market? It is the sum of everyone’s retention. –Evolution of the jumbo limit: Why has it changed? –FAC shopping large amounts can lock up capacity –Increasing plans are complex to manage: How much of “maybe” increases do companies give on a life? Reinsurers need to track the ultimate amount –How can we increase the market’s capacity? Higher retention for each participants Change the jumbo limit once again

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Shortage of underwriters –Increase efficiency in the use of underwriters –Automated system –Tele underwriting No significant decrease in requested APS yet –Outsourcing to other underwriters –Training programs to develop underwriters

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting FAC shopping –For reinsurers it is an opportunity to show our risk assessment expertise –In some instance reinsurers can provide a better offer to clients as they have been exposed to more complex risks –Can be seen as training via discussions of risk assessment amongst underwriters –Underwriting support in peak periods –Used to close the market on some complex cases and satisfy the broker/agent that all has been done

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Age and Amount requirements –Ways to expedite the underwriting No fluids under $250,000 Offset with more questions asked (tele underwriting) –With a more educated population and awareness of preventive testing, there is an increase of pending test results at time of underwriting. How are these cases being underwritten? Postponed vs accepted. –APS: slows down the process but some information is still needed. with private clinics, how to get the whole picture? Do insured's even have a doctor anymore? Tele underwriting: one way to reduce APS’s

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Communication between underwriters and actuaries –Allocation of treaty shares –Importance of service and support provided (FAC) –For a reinsurer, importance of communicating and working with actuaries when changing the Age and Amount requirements grid. There might be a price adjustment for some of the proposed changes.

2007 General Meeting Assemblée générale General Meeting Assemblée générale 2007 Hot topics: Underwriting Questions?