Actuaries Club of the Southwest

Transcription

1 Actuaries Club of the Southwest Friday 06/16/2017 Greater Insights. Better Outcomes. 1

2 Key issues in simplified issue products. The prevalence of risk factors in blood, urine and saliva samples. Robert Stout, Laboratory Director 2

3 Agenda Accelerated Underwriting Risk Insights US population data. SOA tables. CRL Mortality Research for selected markets Alternative risk mitigation methods. 3

4 25 20 D E A T15 H S / Comparison of US, Insurance Applicant and SOA 2017 Table Mortality INSURANCE US POPULATION SMOKER 9.80% 15.10% HIV 0.04% 0.33% COCAINE 0.20% 5.20% OTHER DRUGS 0.2%-4.5% 5.2%-38.5% SOA WONDER CRL US population data is self-reported Insurance is CRL data SOA 2016 male standard ANB 0 Iss Age 4

5 Agenda 1.) Examine the prevalence and mortality of HIV, cocaine and cotinine in three different fluids Saliva Applicant collected; Agent or paramed observed Urine and blood Paramedical collected 5

6 Saliva 1.) Normally for lower policy amounts, younger applicants; average $68,000 age 39. 2). Cost savings and ease of collection. 6

7 Identification of Risk With Different Sample Types Mortality Risks are of 2 types. unknown to the applicant at the time of application known or suspected by the applicant and misrepresented during the applicant process. Alternatives to blood testing include urine and or saliva samples. The questions is how do these samples compared to the results obtained from blood. 7

8 Insurance applicant test prevalence Saliva results 8

9 Prevalence of HIV in Insurance Applicant Saliva HIV status age neg pos total % Positive <30 1,132,907 2,088 1,134, to ,693 2, , to ,937 2, , to ,187 1, , to , , , , Total 3,739,723 9,365 3,749, CRL data

10 Potential Applicant s for simplified issue HIV status age neg pos total % Positive <30 1,132,907 2,088 1,134, to ,693 2, , to ,937 2, , to ,187 1, , to , , , , Total 3,739,723 9,365 3,749,

11 Comparison of three key risk identified by testing of applicant samples HIV COCAINE NICOTINE/ COTININE AGE BAND SALIVA SERUM SALIVA URINE SALIVA URINE < % 0.05% 0.90% 0.25% 21.6% 10.8% 30 to % 0.05% 1.30% 0.23% 21.2% 9.6% 40 to % 0.05% 1.76% 0.24% 21.4% 10.6% 50 to % 0.04% 1.19% 0.15% 17.4% 9.9% 60 to % 0.03% 0.42% 0.07% 11.1% 7.8% % 0.02% 0.20% 0.03% 7.3% 5.2% Total 0.25% 0.04% 1.19% 0.20% 20.0% 9.8% 11

12 Proposed simplified issue categories; three key risk identified by testing of applicant samples HIV COCAINE COTININE AGE BAND SALIVA SERUM SALIVA URINE SALIVA URINE < % 0.05% 0.90% 0.25% 21.6% 10.8% 30 to % 0.05% 1.30% 0.23% 21.2% 9.6% 40 to % 0.05% 1.76% 0.24% 21.4% 10.6% 50 to % 0.04% 1.19% 0.15% 17.4% 9.9% 60 to % 0.03% 0.42% 0.07% 11.1% 7.8% % 0.02% 0.20% 0.03% 7.3% 5.2% Total 0.25% 0.04% 1.19% 0.20% 20.0% 9.8% 12

13 SALIVA/FULLY UNDERWRITTEN Ratio of Positive Test from Saliva Blood and Urine <30 30 to to to to AGE GROUPS HIV COCAINE COTININE HIV COCAINE COTININE AGE SALVIA/SERUMSALIVA/URINE SALIVA/URINE < to to to to Total

14 COX MORTALITY Cox Multifactorial Mortality Ratio Comparison for Saliva and Serum HIV MR SALIVA MR SERUM <30 30 to to to to AGE GROUP Includes age and sex as covariates. 14

15 Comparison of the prevalence of HIV in the USA and insurance applicant populations CDC USA Insurance Known Unaware Saliva Blood PREV HIV 0.30% 0.075% 0.25% 0.04% HIV/100,000 30/100K 7.5/100K 25/100K 4/100K 15

16 Implication for the Middle Market There is a substantial unexpected increased prevalence of three well recognized risk markers in young applicants applying for lower policy amounts of coverage that were detected by testing of saliva samples. That increase is likely driven by a well informed consumer hoping to avoid detection by selection of products that do not require blood testing. 16

17 The Risk Prevalence and mortality drive risk. If a positive is infrequent and only a minor risk then it may be easily priced. But if the risk is known or suspected by the applicant then even an infrequent risk may be a product killer. While misrepresentation may be infrequent it is driven by money. Testing is the only reliable method for detection of many of the risk that we encounter in underwriting. 17

18 Accelerated Underwriting: Risk Insights 18

19 Accelerated Underwriting Will the Applicant Population Remain the Same? 19

20 Cumulative Percentage Smart Score Population 100% 90% 80% 70% 60% 50% 40% 30% 20% Population Comparison Carrier G Carrier I Carrier L Carrier M Carrier N 10% 0% Smart Score 20

21 Unexpected Findings 1. Tobacco Status (amnesia) 2. Physical Measurements A. Height & Weight BMI B. Blood Pressure 3. Other Findings A. Diabetics B. Cocaine C. HIV D. Hep C 21

22 Insurance applicant population age/ amount 0-$99k $100-$249k $250-$499k $500<$1M $1M<$2M $2M % 3% 3% 3% 1% 0% % 3% 5% 6% 4% 2% % 4% 5% 5% 3% 2% % 5% 4% 3% 2% 1% % 4% 2% 1% 1% 1% 70> 0% 1% 0% 0% 0% 0% N>12.5M Accelerated underwriting 40% population 22

23 HIV HIV: Reactive N >3MM 0.027% Mortality 650%-1,300% Age/Amt $0-$99k $100-$249k $250-$499k $500 <$1M $1M<$2M $2M % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Accelerated U/W Target = 56% Mortality: 1300% in younger age bands & 350% in older age bands JIM, Vol. 43, pg ,

24 Tobacco Amnesia Tobacco: No & Cotinine > 0.2mg/dl N >12 MM P=3.6% Mortality 240% Age/A mt $0- $99k $100- $249k $250-$499k $500 <$1M $1M<$2M $2M % 0.19% 0.13% 0.10% 0.10% 0.15% % 0.17% 0.13% 0.10% 0.08% 0.08% % 0.15% 0.12% 0.10% 0.09% 0.09% % 0.14% 0.10% 0.09% 0.08% 0.09% % 0.11% 0.08% 0.08% 0.07% 0.08% % 0.08% 0.07% 0.07% 0.06% 0.06% Accelerated U/W Target = 47% Mortality Risk: adds 2.40% & lose 1.7% in premium OTR Vol. 20, No. 2,

25 Cocaine Cocaine: Positive N >3MM P= 0.105% Mortality 226%-500% Age/Amt $0-$99k $100-$249k $250-$499k $500 <$1M $1M<$2M $2M % 0.006% 0.005% 0.003% 0.001% % 0.007% 0.006% 0.005% 0.003% % 0.012% 0.007% 0.004% 0.002% % 0.012% 0.006% 0.003% 0.001% % 0.004% 0.001% 0.001% 0.000% % 0.000% 0.000% 0.000% 0.000% 0.00 Accelerated U/W Target = 45% Mortality: 500%, 321%, 226% in age bands 29, 39, 49, respectively. OTR, Vol. 26, No. 1,

26 Diabetes Diabetes: No & A1c >=6.5% N >100k (A1c on all) 2.9% Mortality % Age/Amt $0-$99k $100-$249k $250-$499k $500 <$1M $1M<$2M $2M % 0.0% 0.0% 0.0% 0.0% 0.0% % 0.1% 0.1% 0.0% 0.0% 0.0% % 0.2% 0.1% 0.1% 0.1% 0.0% % 0.4% 0.2% 0.1% 0.0% 0.0% % 0.4% 0.1% 0.0% 0.0% 0.0% % 0.1% 0.0% 0.0% 0.0% 0.0% Accelerated U/W Target = 21% Mortality Risk: adds 1.7% to 2.6% Mortality: at lower A1c levels 155% to 600% (Females A1c>11%) OTR, Vol. 25, No. 1,

27 Question in Accelerated Underwriting Will the Applicant Population remain the Same? Are alternate sources of information sufficient to identify the risk in a well informed public. 27