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Mortalityto Die or not to Die

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Title: Mortalityto Die or not to Die


1
Mortalityto Die or not to Die
  • MUD Meeting
  • January 26, 2009
  • New York City

2
Presenters
  • Rick Bergstrom, FSA, MAAA
  • Principal, Bergstrom Consulting
  • Anna Hart, MS, SRM
  • Principal, ARHart Consulting

3
Time to Play..
  • Definitioneapordy!!

4
  • Actuate (verb)

5
  • To perform actuarial duties

6
  • CRAAP (noun)

7
  • The term for results presented in life insurance
    company GAAP statements

8
  • COMPENSARATE (verb)

9
  • The process of converting a policyholders Cash
    Value into agent compensation through the policy
    exchange process

10
  • THECISION (noun)

11
  • An underwriters written explanation to an
    agent for a substandard decision

12
  • YESTERSOON (noun)

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

17
History 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

18
Experience 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)

19
SOA 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

20
2004-05 Select A/E Ratios by Issue Age Group

21
2004-05 Select A/E Ratios by Issue Age Group

22
2004-05 A/E Ratios by Face Amount Age 18
23
Standard Mortality MNS
24
Excess 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?

25
Impaired Risk Experience Studies Over the Years
Using the Impairment Study Capture System (ISCS)
26
What 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

27
ISCS 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.

28
What 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

29
How 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. 

30
What 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)

31
Where 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

32
Alcohol 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

33
AALE Mortality Ratios by Face Amount Compared to
1990-95, Male
lt 30 deaths
34
AALE Mortality Ratios by Face Amount Compared to
1990-95, Male
35
AALE Mortality Ratios by Smoking Status Compared
to 1990-95, Male
36
AALE Mortality Ratios by Issue Age Group Compared
to 1990-95 Tables
lt 30 deaths
37
AALE Mortality Ratios by Issue Age Group Compared
to 1990-95 Tables
38
AALE Compared to 1990-95 TablesMale Only
39
On average, the alcohol abusers life span may be
shortened by 1015 years.
40
Body 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.

42
NIH Definition of Obesity
43
Mortality Ratios for BMI Compared to 1990-95
Table (M F)
44
Mortality Ratios for Abnormal BMI by Smoking
Status
45
Mortality Ratios for Abnormal BMI by Gender
46
Questions.
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