Title: Mortalityto Die or not to Die
1Mortalityto Die or not to Die
- MUD Meeting
- January 26, 2009
- New York City
2Presenters
-
- Rick Bergstrom, FSA, MAAA
- Principal, Bergstrom Consulting
- Anna Hart, MS, SRM
- Principal, ARHart Consulting
3Time to Play..
4 5- To perform actuarial duties
6 7- The term for results presented in life insurance
company GAAP statements
8 9- The process of converting a policyholders Cash
Value into agent compensation through the policy
exchange process
10 11- An underwriters written explanation to an
agent for a substandard decision
12 13- The date all agents expect to be selling a new
product once the idea for such a product is
suggested
14- And finally (at last!...)
- UNDERWRITHING (noun)
15- A movement made by an underwriter reading the
records of an applicants hemorrhoidectomy
identical to her own scheduled next week
16- Insights on Mortality..
- From a True Actu-writer
17History or Mortality Tables
- Northampton tablesScotland, 1783
- US Life Tables
- 1950-54, 1955-60, 1965-70medical only
- 1975-80Med, Paramed, Nonmed
- 1985-90---25-year select period
- 1990-95---10 full years of smoker data
- 2001 VBT---created from 1990-95
- 2008 VBT---created from SOA 2002-04
18Experience v. Valuation Tables
- Experience tables are created from actual SOA
experience - Valuation Basic Tables (VBT) are created from
experience table - Valuation Tables (e.g. 2001 CSO) are VBT with
mortality margins added (for reserving purposes)
19SOA Experience
- Published annually by ILES through SOA
- Mortality data contributed by up to 50 life
companies - MIB accumulates, cleanses, and aggregates
intercompany experience using A/E ratios - Results published in pivot table format
- Latest results from 2004-05 exposure year
202004-05 Select A/E Ratios by Issue Age Group
212004-05 Select A/E Ratios by Issue Age Group
222004-05 A/E Ratios by Face Amount Age 18
23Standard Mortality MNS
24Excess Mortality Wear-off
- How does true excess mortality wear off?
- Remain level forever?
- Decrease over time?
- Increase over time?
- Are table ratings really for life?
- Is excess mortality always (and only) a function
of age?
25Impaired Risk Experience Studies Over the Years
Using the Impairment Study Capture System (ISCS)
26What is ISCS?
- The Impairment Study Capture System (ISCS) is a
database and reporting system hosted and managed
by MIB. - Mortality experience is provided by MIB
contributing companies - Members are comprised of actuaries, underwriters
and medical directors -
27ISCS Purpose
- Its purpose to provide the foundation for the
industry to measure, in a comprehensive and
consistent manner, insurance experience
associated with specific medical impairments,
combinations of impairments.
28What does ISCS do?
- supports the research that provides specific
mortality experience results that are valuable in
developing underwriting guidelines - justifies the risk selection process for specific
impairments, - justifies the overall process of medical
underwriting
29How does ISCS work?
- Uses de-identified data that is aggregated from
the industry, - ISCS results support the underwriting and risk
classification process with sound data and
actuarial methods, - It serves as an information resource available
for such investigations, and is cumulative in
nature.
30What Studies have been done?
- Alcohol Abuse and Liver Enzymes (AALE) May 2001
- Elevated Blood Pressure (EBP) April 2003
- Diabetes Mellitus (DM)Feb 2005
- Body Mass Index Study (June 2006)
- Mortality Experience in the Elderly in the ISCS
(New) - Aviation/Hazardous Sports (New)
31Where to find
- All ISCS studies have been published in both JIM
and OTR, and links can also be found at the MIB
website - http//www.mmlc.org/html/publications.htm
32Alcohol Abuse and Elevated Liver Enzymes Study
-
- insureds with evidence of alcohol abuse, an
adverse driving record or elevations of the liver
transaminases or gamma-glutamyl transferase - Covered exposure period 1989 - 1999
33AALE Mortality Ratios by Face Amount Compared to
1990-95, Male
lt 30 deaths
34AALE Mortality Ratios by Face Amount Compared to
1990-95, Male
35AALE Mortality Ratios by Smoking Status Compared
to 1990-95, Male
36AALE Mortality Ratios by Issue Age Group Compared
to 1990-95 Tables
lt 30 deaths
37AALE Mortality Ratios by Issue Age Group Compared
to 1990-95 Tables
38AALE Compared to 1990-95 TablesMale Only
39On average, the alcohol abusers life span may be
shortened by 1015 years.
40Body Mass Index Study
- to examine the relationship between mortality and
body mass index (BMI) in an insured population,
particularly BMI in isolation from other risk
factors. - The study was based on policies issued between
1989 and 2003.
41- A persons BMI is found by dividing weight
- in kilograms by height in meters squared.
- BMI, or its less specific historical namesake
build, has been used in life insurance
underwriting for over 100 years. - Classification of BMI for this study is shown in
next slide.
42NIH Definition of Obesity
43Mortality Ratios for BMI Compared to 1990-95
Table (M F)
44Mortality Ratios for Abnormal BMI by Smoking
Status
45Mortality Ratios for Abnormal BMI by Gender
46Questions.