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Topic:
Agenda
Agenda
Agenda
Reduced underwriting
Medical advances
Agenda
Product Developments
Covered conditions
Ever expanding list of covered conditions
Product Developments
AIDS due to Blood Transfusion
AIDS due to Occupational Accident
Alzheimers Disease
Amputation of Feet due to Complication from Diabetes
Angioplasty
Aplastic Anaemia
Bacterial Meningitis
Benign Brain Tumour
Blindness
Cancer
Carcinoma-In-Situ
Chronic Adrenal Insufficiency (Addisons Disease)
Chronic Relapsing Pancreatitis
Coma
Coronary Artery Bypass Surgery
Creutzfeldt-Jacob Disease (Mad Cow Disease)
Dissecting Aortic Aneurysm
Ebola
Elephantiasis
Encephalitis
End Stage Liver Disease
End Stage Lung Disease
Fulminant Hepatitis
Heart Attack
Heart Valve and Structural Surgery
Idiopathic Dilated Cardiomyopathy
Loss of Hearing
Loss of Speech
Major Burns
Major Head Trauma
Major Organ Transplant (Bone Marrow Transplant)
Major Organ Transplant (Heart, Kidney)
Major Organ Transplant (Liver, Lung, Pancreas)
Motor Neuron Disease
Multiple Sclerosis
Muscular Dystrophy
Myasthenia Gravis
Necrotising Fasciitis (Flesh Eating Disease)
Paralysis
Parkinsons Disease
Poliomyelitis
Primary Pulmonary Arterial Hypertension
Progressive Systemic Sclerosis
Renal Failure
Rheumatoid Arthritis
Severance of Limbs
Severe Asthma
Severe Osteoporosis
Stroke
Surgery to Aorta
Systemic Lupus Erythematosus
Terminal Illness
Vegetative State
10
Product Developments
What does this product cover?
Major conditions (3)
Cancer, Myocardial Infarction, Renal Failure
Surgeries (8)
5 heart related and 3 major organ transplants
11
Product Developments
Covered conditions
Ever expanding list of covered conditions
12
Product Developments
Have Critical Illness Products become a lottery?
A study of claims where CI and DI were both paid
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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Product Developments
Covered conditions
Ever expanding list of covered conditions
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Product Developments
Case Study
Korean Cancer Products
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Product Developments
During Reduced Benefit Period
Regular Cancer
50%
100%
Breast
20%
40%
Genital
20%
40%
CIS
10%
20%
BLT
10%
20%
10%
20%
Thyroid Cancer
10%
20%
Colon
50%
100%
Prostate
50%
100%
Liver
56%
112%
Lung
56%
112%
Stomach
50%
100%
56%
112%
Gallbladder etc
50%
100%
HMEC
66%
132%
Regular Cancer
50%
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100%
Product Developments
Anti-selection after Reduced Benefit Period
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
1
4
100% SA
17
Product Developments
Impact of windfall benefits on experience
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
1
4
100% SA
20% SA
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Product Developments
Covered conditions
Ever expanding list of covered conditions
19
Product Developments
Case Study
In 2014 a life assured (Mr X) submitted a claim for prostate cancer:
5% of prostate infiltrated by carcinoma
Gleason score of 6
PSA of 2.9 ng/ml
Product Developments
Case Study (cont.)
Based on the size of the tumours, Mr Xs condition (100% payout) was categorised
as T2N0M0, while Mr Ys condition (5% payout) was categorised as T1N0M0.
Diagnosed Condition
Prostate cancer that has progressed to at least T1N0M0
Benefit Percentage
5%
100%
100%
Product Developments
Pooling of risks:
Historically, one product for all (target market controlled through distribution)
Products that are tailor made to chosen target groups
Female CI, Juvenile CI, Diabetic CI
Trends in cafeteria type products that allow policyholders to choose the cover
conditions
Do we have robust underwriting and pricing approaches to manage such risks?
By offering more choice, are we opening the doors for anti-selection?
22
Agenda
23
Knowledge Gap
Two conflicting trends:
In many markets, there is focus on easy sales (with pressure to shorten the
underwriting questionnaires and reduce the evidence required)
Genetic profiling and home diagnostic kits are increasingly attainable
Knowledge Gap
25
Knowledge Gap
26
Knowledge Gap
Applicants (or close family members) of applicants may have been
genetically profiled, demonstrating a genetic predisposition to a
particular condition
Despite product complexity and additional consumer choice, insurers
are asking fewer direct health questions and may even be barred from
asking about genetic tests
Without non-disclosing, applicants are able to select and secure the
product under which an individual with their genetic profile is most likely
to claim.
27
Knowledge Gap
Case Study
In 2012, a mother was genetically profiled during pregnancy and was shown to have
a genetic disposition to diabetes. On birth, a DNA test of the childs chord-stem
blood confirmed the same genetic abnormality and doctors recommended ongoing
monitoring of the childs condition.
Shortly after receiving this information, a critical illness policy was taken out on the
child.
In 2015, the child was formally diagnosed with Type 1 Diabetes Mellitus (in
accordance with the policys definition) and a claim was submitted.
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Knowledge Gap
Case Study (cont.)
The insurance company was able to decline this claim, but only because of a
question on the application form concerning whether the life assured was awaiting
test results. The company was able to confirm that, at the time of application, test
results for diabetes were indeed being awaited and there had been non-disclosure.
Is such a question included on all Asian Critical Illness application forms for the
products currently being sold? Will it continue to be asked in the future?
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Knowledge Gap
Beware:
Where incontestability clauses limit the insurers ability to void policies and decline
claims, any move to reduce the actual medical evidence collected at underwriting
stage adds hugely to the risk of uncontrolled claims.
In some countries, despite the obvious and intentional non-disclosure, it might have
been impossible to decline this claim due to incontestability legislation.
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Agenda
31
Medical Advances
Diagnostic advances:
Less invasive / more cost-effective techniques
Earlier detection (screening programmes)
Detection of less severe conditions (not truly critical)
Diagnostic requirements in the definitions cease to be current
Advances in treatment:
Previously incurable conditions may become readily curable (not truly critical)
Less invasive surgical techniques
May be an earlier intervention (not truly critical, higher incidence) or
May replace existing techniques (definitions cease to be current)
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Medical Advances
Case Study
Open Heart Surgery
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Medical Advances
Case Study
Open Heart Surgery
Up until 5 years ago, surgical valve
replacement was the only therapeutic option
In 3060% of elderly patients the risks of
surgery outweighs the benefits
Y Boudjemline et al: "Percutaneous implantation of a valve in the descending aorta in lambs" Eur Heart J 2002: 23:10451049; E Grube et al.: "Perc. Implantation of the
CoreValve Valve Prosthesis in High-Risk Pts. With Aortic Valve Disease" Circ. 2006;114:1616-1624 ; MB Leon et al.: "Transcatheter Aortic-Valve Implantation for Aortic
Stenosis in Patients Who Cannot Undergo Surgery" NEJM 2010; 21;363:1597-6073; Smith CR et al.: Transcatheter versus surgical aortic-valve replacement in high-risk
patients N Engl J Med 2011;364:2187-98; Popma JJ et al. Transcatheter aortic valve replacement using a self-expanding bioprosthesis in patients with severe aortic stenosis
at extreme risk for surgery. J Am Coll Cardiol 2014; Adams DH et al.: Transcatheter Aortic-Valve Replacement with a Self-Expanding Prosthesis NEJM 2014;370:1790-8.
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Medical Advances
Case Study
New TAVI devices reduce mortality and result in fewer complications compared to
open heart surgery
In the future, TAVI is expected to become the standard procedure
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Medical Advances
Case Study
Customer needs
heart valve surgery
Customer buys
CI policy
Policy
terminates
Open Surgery
100%
and is
not
covered (?)
50%
Transcatheter
years
0%
0
10
15
20
36
Medical Advances
Case Study
Heart Valve Surgery
The actual undergoing of open heart surgery to replace or repair heart valve
abnormalities. The diagnosis of the heart valve abnormality must be supported by
cardiac catheterization or echocardiogram and the procedure must be considered
medically necessary by a consultant cardiologist appointed by the Company.
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Medical Advances
Case Study
New TAVI devices reduce mortality and result in fewer complications compared to
open heart surgery
In the future, TAVI is expected to become the standard procedure
To future-proof the product, should TAVI be explicitly covered in the definition of
Heart Valve Surgery?
TAVI is already increasing the incidence of aortic valve procedures in elderly
patients (over age 70)
What is the cost of future-proofing the definition in this way?
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Agenda
39
Ensuring Sustainability
Outcome of the Health Check Health Report
COMPLEX PRODUCTS
WINDFALL BENEFITS
ASYMMETRY OF INFORMATION
MEDICAL ADVANCES
Ensuring Sustainability
Develop products that
Are easy to understand, meet a definite financial need of the customer and do
not pay windfall benefits
Future-proof products by
Introducing flexible definitions
Not guaranteeing rates
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Topic: