1. CIA Annual Meeting LOOKING BACK…focused on the future

2. Experience Studies East Coast Edition!!! June 29, 2005 #4608

3. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Contestants: Scott McGaire, AVP and Actuary, Manulife Financial Lloyd Milani, Actuarial Services Vice-President, Munich Re

4. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Potpourri $100 Mission Impossible What is the mission or term of reference for the Committee on Expected Experience?

5. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Mission Identify the need for and conduct, on a periodic basis, experience studies on demographics, claims, expense and other occurrences of actuarial interest relating to as many areas of actuarial practice as possible, including the preparation of experience tables. Analyze the experience with particular emphasis on its applicability to, and impact on, actuarial assumptions for pricing, cost estimates and valuation of liabilities. Undertake research into selected areas of experience where future experience might be materially different from past experience. Identify the need for, and prepare papers on, the selection of relevant assumptions where a standard table is not appropriate, but the particular entity’s own experience is not fully credible. Communicate with other professional and industry groups on topics relating to experience studies and expected experience

6. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Potpourri $300 Run Forrest Gump Run Who is Mary Forrest, the chair of the Committee on Expected Experience?

7. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Structure Group, Individual and Annuity sub committees report to CEE Chair CEE Chair reports to Member Services Council

8. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Subcommittees Chairpersons Annuity Lloyd Milani Individual LifeScott McGaire Group L&HPeter Muirhead

9. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Annuity Committee Members Lloyd MilaniMunich Re Bob HowardSun Life Penny TeddimanSun Life Bonnie ForlerManulife Beth FitzmauriceLondon Life Mario RobitailleIndustrial Alliance Michel DuboisStandard Life

10. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Individual Life Committee Members Scott McGaireManulife Lloyd MilaniMunich Re Emile ElefteriadisSwiss Re Marc-Andre BelzilRGA Marc TardifDeloitte & Touche Beth FitzmauriceLondon Life Stephen Beal Sun Life Bill BrathEquitable

11. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Peter Muirhead J.J. Daniel Couture Karen Davies Réjean Dion John Earl Firozali Hirji Tony Iglesias Rudra Maharajh Stella-Ann Menard Wayne Morris Michel Rouette Michel Simard Pascal Verrette Gary Weigel Group Subcommittee Members

12. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Individual Life

13. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grim Reaper $100 When received, these results will be of “dead” interest to actuaries What are the 2001-2002 industry mortality results?

14. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Canadian Standard Ordinary Experience 2001-2002: July/August 2005 2002-2003: September/October 2005 2003-2004: Request for Data Coming Soon!

15. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 ContributorsExposures Canada Life9.44% Desjardins4.67% Great-West Life16.41% Industrial Alliance7.41% Industrial-Alliance Pacific2.09% Manulife Financial5.30% Maritime Life11.10% Clarica18.90% National1.91% Sun Life7.49% Transamerica Life15.28%

16. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Exposures1999-002000-012001-02 Number (‘000s) 8,1347,9277,752 Amount (millions) 564,752576,167609,306

17. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Death Claims 1999-002000-012001-02 Number50,24850,56949,238 Amount (millions) 1,0181,0701,117

18. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Average1999-002000-012001-02 Claim20,25321,15522,691 Sum Assured 69,43472,68878,596

19. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Claims > $1 million1999-002000-012001-02 Male Select22.9 (10) 39.6 (17) 59.9 (29) Female Select 4.7 (2) 5.1 (3) 0.0 (0) Male & Female Ultimate 1.8 (1) 1.6 (1) 4.6 (3) Total29.3 (13) 46.3 (21) 64.5 (32) In Millions of Dollars. (Number of Claims in Brackets.)

20. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

21. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

22. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

23. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grim Reaper $300 This problem delayed action by a mock US Government agency. What is the error that included non- underwritten lives in the CIA industry mortality study?

24. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Data Problem 1 Non-underwritten lives included Data limited to the ‘unknown underwriting’ classification Error included in all past submissions Will include comparisons showing effect of problem

25. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

26. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Data Problem 2 One company did not record cause of death for a period of time on one system “Unknown” and “Did not contribute” are combined in the reports Cause of death percentages depressed, making comparisons to other years difficult

27. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grim Reaper $400 This distribution method saved 'experienced' actuaries a lot of time. What is posting readable data on the CIA website?

28. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Distribution of Results Regular Paper Package CIA Website Currently PDF format Exploring EXCEL or text format Exploring inclusion of more detailed results CD

29. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grim Reaper $500 This table is not furniture, but will still be a boon if completed. What is the next CIA Industry mortality table?

30. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 New Industry Mortality Table Last table was CIA8692 Will be requesting proposals later this summer Probably include 1998 to 2004 experience (CIA9804?)

31. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Issues for New Table: Fluid Testing – unable to split Length of Select Period Preferred Underwriting Too inconsistent Report Smoker Distinct + Preferred Separately Error in unknown underwriting data

32. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Annuity

33. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grumpy Old Men $100 Any minute now When will next Individual Annuity mortality study be published?

34. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Due to be published by the end of summer Study years 1997 – 1998 1998 – 1999 1999 – 2000 2000 – 2001 Same format as 1996-97 study

35. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Issues Some data problems were identified and required re-submission by a company A few companies submitted data late One company unable to submit data

36. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grumpy Old Men $300 Marriage is the lesser of two evils What does the annuity study show as being a significant factor in annuitant mortality?

37. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Company1997-19981998-19991999-20002000-2001 Canada18.3%0.0% Clarica14.7%17.6%17.2%18.6% Cooperators1.1%1.7%1.3%1.4% Great-West11.8%13.4%13.9%13.6% Industrial-Alliance0.0%7.1%7.5%7.0% London9.2%10.0%8.8%9.8% Manulife38.4%41.9%42.2%40.4% Standard6.6%8.3%9.1%9.2%

38. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Policy Year Number of Companies Number Exposed Number of Deaths 1991-19929202,1516,838 1992-199310217,9267,878 1993-19949213,7308,152 1994-19958177,0017,395 1995-19968175,9157,367 1996-19978174,9487,702 1997-19987179,4868,599 1998-19997153,9957,683 1999-20007149,0437,563 2000-20017143,9827,791 1991-2001101,788,17876,968

39. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Policy Year Number of PoliciesAnnualized Income MaleFemaleMaleFemale 1991-1992103.0%91.9%98.3%85.9% 1992-1993103.2%96.5%100.5%89.2% 1993-1994102.0%98.3%99.2%95.5% 1994-1995106.4%98.8%96.7%100.2% 1995-1996101.1%95.1%93.4%95.0% 1996-199799.7%97.0%91.5%93.8% 1997-1998101.4%98.2%96.4%93.6% 1998-199999.3%98.1%95.0%98.9% 1999-200097.7%91.9%89.2%85.5% 2000-200199.2%92.9%94.4%87.8% 1991-2001101.3%95.9%95.3%92.5%

40. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

41. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

42. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

43. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

44. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

45. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grumpy Old Men $400 Sex and numbers What is having an annuitant mortality database available on the CIA website?

46. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Experience data to be made available in a database format Summarized such that company experience can not be identified Issues Amount of data – technical problems Should only the contributing companies receive this information?

47. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Data Format Study year (13 years) Sex Issue Age Duration Single/Joint/Survivor Tax types - RRSP/RPP/non-registered Refund type Amounts bands, 0-1k, 1k-5k, 5k-10k, 10k+ Calculated Information Exposure (number and amount) Expected (number and amount) Actual (number and amount)

48. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Grumpy Old Men $500 The average year that your current co-op student was born. What is 1983, also the year in which the current annuitant mortality table was developed?

49. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Proposed New Table Based on Experience Years 1988 to 2001 Male, Female Single, Joint, Survivor Attained ages 60 to 90 Being developed by Bob Howard

50. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Process for Approval Develop table and documentation in draft Submit to membership for commentary

51. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

52. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608

53. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse Studies

54. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse in Judgment $100 Outdated and really outdated What is the UL Level COI and the T100 lapse studies last done in 2003 and 1999 respectively?

55. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Term to 100 lapse study Update results Expect exposures in the 20 th durations+ UL Level COI lapse study Add additional exposure Attempt to over come some of the short comings of 2003 study Refine the study Expected Completion date July 2006

56. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 UL Level COI Average Pricing Lapse Rates Duration 30 30 Year Old (Top 10) 0.0 0.5 1.0 1.5 2.0 2.5 20012002200320042005 Lapse Rate % 0.0 0.5 1.0 1.5 2.0 2.5 20012002200320042005 Lapse Rate % 50 Year Old (Top 10) 30 Year Old (Remaining Co) 50 Year Old (Remaining Co)

57. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse in Judgment $300 How many times I was ‘Screeched in’ last night What is 5, which so happens to be the number of key differences between the old studies and the new ones?

58. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Additional information: Funding levels Premium Deposits Cash Value (T100) YRT COI conversions to Level COI Non-guarantee elements

59. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse in Judgment $400 Canada Day What is the date that the data for the Level COI and T100 studies is due?

60. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Request for data sent March 05 Sent to 16 companies Deadline is July 1 A handful of companies have been asking questions about the data requirements

61. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse in Judgment $500 Shock and Awe How will your policyholder feel after she receives the bill for the 11 th duration premium on their Term 10 policy?

62. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Lapse study for Renewable term products Premium Persistency studies Lapse study for Critical Illness Updated UL Level COI study in 3 years

63. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Preferred Term 10 Lapses T10 Basic Lapse - 30 Year Old (Top 10) T10 Selective Lapse - 30 Year Old (Top 10) 0 5 10 15 20 25 30 35 40 123456789101112131415 Duration Lapse Rate % 0 5 10 15 20 25 30 35 40 123456789101112131415 Duration Lapse Rate % T10 Basic Lapse - 30 Year Old (Remaining) T10 Selective Lapse - 30 Year Old (Remaining)

64. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 PV Premium Breakdown – T10 PV Other PV Profit PV Conversion Costs PV Surrender Benefits PV Death Benefits PV Expenses PV Other Distribution Costs PV Compensation Top 10 8.2% 2.5% 0.2% 57.5% 11.8% 3.8% 16.0% 0.2% 7.7% 0.7% 0.1% 55.4% 17.5% 4.4% 13.9% Remaining Companies

65. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 PV Premium Breakdown – T10 First 10 Years Only 2.5% 0.2% 58.7% 17.0% 4.8% 23.1% -6.3% Top 10 PV Other PV Profit PV Conversion Costs PV Surrender Benefits PV Death Benefits PV Expenses PV Other Distribution Costs PV Compensation PV Profit 0.2% 1.2% 0.1% 51.0% 26.2% 6.0% 20.0% -4.7% Remaining Companies

66. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Premium Persistency UL Level COI 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 151015202530Ultimate Duration Persistency Rate Mid Funded UL Level COI (Top 10)Mid Funded UL Level COI (Remaining Companies) Max Funded UL Level COI (Top 10)Max Funded UL Level COI (Remaining Companies)

67. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Potpourri $400 Terminator 4 – Disabled no more What is the group sub-committee’s LTD termination study?

68. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Group

69. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 LTD Termination Study Previous study for experience years 1988 to 1994 (released a few years ago) Additional data for 1995 to 1997 experience years Data collected a few years ago Publish study in 2005 or 2006

70. CIA Annual Meeting Experience Studies LOOKING BACK…focused on the future June 29, 2005 #4608 Potpourri $500 Answers Do you have any questions?