1. 2008 General Meeting Assemblée générale 2008 Toronto, Ontario
Canadian
Institute of
Actuaries
L’Institut canadien
des
actuaires
2008 General Meeting
Assemblée générale 2008
Toronto, Ontario

2. Group Living Benefits Critical Illness Role of Medical Director
Howard Minuk
Chief Medical Officer
Swiss Re Life & Health

3. Group Living Benefits Medical Director
team player working with actuarial, underwriting, sales, claims

4. Medical Director and Pricing Actuary
provide reliable incidence information for covered CI
speculate what factors might affect population CI incidence trends
help determine what impact underwriting will have on insured CI incidence
determine detailed knowledge about how the product is priced and understand the impact that changing risk factors for CI will have on premium rate
speculate what impact changes in medical technology, medical definitions, and legislation, may have on the CI risk classification process and the bottom line

5. Distribution of the “Big Four”
United States
Cancer 44.6% 1,258,000
MI 23.7% 670,000
CABG 13.9% 392,000
CVA 17.7% 500,000
Canada
CVA 19.1% 50,000
Cancer 49.4% 129,000
MI 26.1% 68,000
CABG 5.4% 14,000

6. Coronary Artery Mortality Trends
About 50% of the decrease in mortality is related to a reduction in CV risk factors and the remainder is related to improvements in medical technology
Among both men & women age > 35 years, the age-adjusted mortality rates from coronary heart disease have decreased steadily from 1980 through 2002.
52%
49%
Ford ES et al. CAD Mortality Among Young Adults in USA (J Am Coll Cardiol 2007;50:2128–32)

7. Coronary Artery Mortality Trends
Among both men & women age years, the age-adjusted mortality rates from coronary heart disease have already plateaued
Ford ES et al. CAD Mortality Among Young Adults in USA (J Am Coll Cardiol 2007;50:2128–32)

8. Storm Clouds on the Horizon
Obesity
‘Metabolic Syndrome’ - Clustered heart attack risks (diabetes, prediabetes, lipids hypertension) associated with central obesity threaten to reduce or even reverse the declining trend in population cardiovascular mortality.
Are CI insurers protected from these epidemics?

9. 2003 Health Canada’s Wt Guidelines
BMI (kg/m2)
Underweight < 18.5
Normal 18.5–24.9
Overweight 25.0–29.9
Obese, class I 30.0–34.9
Obese, class II 35.0–39.9
Obese, class III 40.0+
Body Shape indicators of increased risk
Waist circumference
Male: > 40 inches (102m)
Female: > 35 inches (88cm)
Lemieux S et al. CMAJ, Nov 23,2004

10. Canada Obesity Prevalence 1979 vs 2004
Percent Obese BMI > 30
Canadian Adult Age Bands
Tjepkema. Adult Obesity in Canada. Statistics Canada-Cat. No MWE

11. Obesity & CV Risk Clustering
Insulin resistance
Metabolic Syndrome
Genetic susceptibility
plus
Childhood obesity
& inactivity
NGT
Type 2 DM
CVD PVD
Retinopathy
Nephropathy BP
Pre DM
&
Fats
Age
Excess CV Morbidity

12. Epidemic of MS in USA/CDA by Age
This data on the prevalence of the MS comes from an analysis of information obtained from 8814 US men & women age > 20 who participated in the Third National Examination survey from This is a cross sectional survey of a nationally representative sample of the US population. Up to the time of this report, there was little available information on the US prevalence of the metabolic syndrome. This study indicates a very high prevalence of the MS increasing with age.
Ford ES et al. Prevalence of the Metabolic Syndrome in US Adults.JAMA.2002;287:

13. Swiss Re Canadian Group Claims
Other MS MI
Cancer
Stroke

14. Distribution of Denied Swiss Re Claims
90 day waiting period
Previously diagnosed
Other
Pre-ex
Does not meet contractual definition

15. Age-specific cancer incidence rates
Male
Female 45 40 35 30 25
Incidence per 1000 20 15
1.6
4.2 10
1.2
2.7 5
15-
25-
35-
45-
55-
65-
75-
85+ 19 29 39 49 59 69 79
Age at diagnosis

16. Incidence per 1000 Year of Cancer Diagnosis and U.S. Female Mortality
SEER Incidence and U.S. Mortality All Cancers, Female (per 1000)
Annual % change (APC) = -0.7%
4.0
3.47
3.48
3.42
3.36
3.43
3.5
3.27
3.11
3.08
3.07
3.14
3.03
3.0
2.5
Incidence per 1000
2.0
1.5
1.0
0.5
‘74
‘76
‘78
‘80
‘82
‘84
‘86
‘88
‘90
‘92
‘94
Year of Cancer Diagnosis and U.S. Female Mortality

17. Incidence /1000 Year of Cancer Diagnosis and U.S. Male Mortality
SEER Cancer Incidence rate and U.S. Mortality All Cancers, Male (per 1000)
APC = -0.6%
5.34
6.0
4.82
4.78
4.36
4.51
5.0
4.25
4.09
4.13
3.95
3.89
3.72
4.0
Incidence /1000
3.0
2.0
1.0
'74
'76
'78
'80
'82
'84
'86
'88
'90
'92
'94
Year of Cancer Diagnosis and U.S. Male Mortality

18. Prostate Cancer Incidence Rates USA by Year
White Males
Prostate
Lung
Colon

19. Incidence Common Male Cancers (2000-USA, All Ages - Seer)
Total ,200
,500
,180
250
31%(of all male cancers)
200
Incidence in Thousands
150
15%
10%
100 9% 50
Prostate
Lung
Colorectal
Urinary

20. Incidence Common Female Cancers
(2000-USA, All Ages - Seer)
(of all female cancers)
30%
180
Total ,000
,400
,000
160
140
120
Incidence in Thousands
13%
100
12% 80 60 40 20
Breast
Colorectal
Lung

21. % increase CA Incidence Trends (1973-94, Seer, US Female, All Ages)
140
122%
120
100
82%
67% 80
% increase
53% 60
35%
34% 40
23%
13% 20
Lung
Melanoma
Kidney
Thyroid
Breast
Liver
Non-Hodgkin’s
All Cancers

22. % increase CA Incidence Trends (1973-94, Seer, US Male, All Ages) 141%
160
141%
142%
140
% increase
120
90%
100
75% 80
50% 60
36%
27% 40 20
Melanoma
Liver
Testis
All Cancers
Prostate
Non-Hodgkin’s
Kidney

23. Impact of Contract Duration on Cancer Diagnosis (Seer 1987 - 1991)
100%
93%
100
71% 80
% of Cancers Diagnosed 60
41% 40 20
Whole Life
< 85
< 75
< 65
Age

24. Product
CI pays a lump sum benefit on the diagnosis of one of the pre selected critical illnesses.

25. Risks in CI definitions
Increasing incidence rates
Client perceptions about cover & exclusions
Evolving legislation
Scientific medical advances

26. Myocardial infarct: definition flexibility?
Risks in CI definitions
Myocardial infarct: definition flexibility?
Changing sensitivity and specificity of tests
2008
Benchmark MI
Definition
1999
New myocardial infarction tests
Troponin –T
Current myocardial infarction definition
CP, EKG changes enzyme rise & fall

27. CI Individual concern about behaviour pattern of applicants
epidemic of informed applicants who have been over represented in claims
possibly poor mix of applicants because of reduced sales

28. CI Individual
Underwriter
Actuary
Applicant

29. Incomplete Underwriting information
CI Individual
Incomplete Underwriting information
Underwriter
Actuary
Informed Applicant

30. Pre-Existing Condition
A Critical Illness that is directly or indirectly related to a condition for which the employee obtained medical care, or for which a reasonably prudent person would have sought medical attention within 24 months before he became insured.
Medical care is considered to be obtained when he consults a doctor or other health care practitioner, uses medication on the advice of a doctor, or receives other medical services or supplies, advice or treatment, whether or not a specific diagnosis is made.
This exclusion does not apply if the illness is diagnosed after he has been continuously insured for 24 months.

31. CI Individual
Can informed applicants hurt us?
Yes!

32. Materially Important Nondisclosure
not commonly involved in contestable life insurance claims
may be one important unrecognized factor responsible for adverse mortality experience especially in preferred lines of business
more commonly recognized in other lines of business, such as DI and CI
Recent increasing sales of CI insurance have really been an eye opener in understanding the behavior pattern of insurance applicants

33. Group CI law of large numbers
we hang our hat on pre-existing unless excess
8 out of 10 Group CI claims are paid
CV claims seen are sometimes seen at young ages-late 30’s early 40’s
potential worsening experience with increases in population risk factor clustering
partnering with experienced reinsurer

34. CI Benchmark Definitions
Alzheimer’s
Aortic surgery
Aplastic anemia
Bacterial meningitis
Benign brain tumour
Blindness
Cancer
Coma
Coronary angioplasty
CABG
Deafness MI
Heart valve replacement
Kidney failure
Loss of independent existence
Loss of limbs
Loss of speech
Major organ failure
Major organ transplant
Motor neuron disease
Multiple sclerosis
Occupational HIV
Paralysis
Parkinson’s disease
Severe burns
Stroke