Lori Boyce, CHS AVP, Underwriting, Risk Management & Research/Development Manulife Financial

Lori Boyce, CHS AVP, Underwriting, Risk Management & Research/Development Manulife Financial

CI Underwriting Agenda Risk of anti-selection Manulife CI Claims experience Preferred Life clients get cancer too! Diagnosis is the key to CI Unique CI Underwriting focus Routine investigations at age 50: Increased risk of diagnosis: lumps, bumps, lesions Points to ponder

CI: Risk of anti-selection Typically. Beneficiary = insured Insured is not dead

Manulife in 2012 $36,000,000 paid to our clients Average payment: $125,000 per claimant

Manulife: 1997 to 2012 $223,000,000 paid 1,900 policies On average, $117,000 per claim

Manulife CI Claims 350 300 250 200 150 100 50 0 1 4 12 21 37 47 79 125 142 177 189 343 311 290 255 247 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Manulife: CI claims 70% 60% 64% 50% 40% 30% 20% 10% 13% 6% 3% 3% 11% 0% Cancer Heart Attack Stroke Coronary Bypass Multiple Sclerosis Other

Manulife: CI face amounts Over $500K 1% $251-$500K 5% Under $100K 39% $100-$250K 55%

Critical Illness: diagnosis NO requirement for: Premature death Disability Proof of incurred expenses ONLY require the definition be satisfied: typically a diagnosis + survive 30 days from diagnosis

Incidence not mortality More clients are: Being diagnosed early Living longer Which supports the need for this contract but offers CI underwriters unique challenges

33 year old female teacher June 2009: Both she and husband applied for $750,000 Life Approved on preferred basis Accepted $25,000 of CI 2 nd trimester pregnancy second child

33 year old female 10/10: she noticed a new lump which felt different from prior clogged duct detected while breast feeding Ultrasound, mammogram and core biopsy completed: Invasive ductal carcinoma: T3N2 Mx ( mammogram: general increased density of breast but no lesion noted )

33 year old female November 2009: $25,000 CI benefit paid

33 year old female February 2012: $750,000 Life benefit paid

50 year old male MD 12/08: approved preferred for $750,000 Life Accepted $187,500 of CI

50 year old male MD Within two years: symptoms of a urinary tract infection 10/11 Post investigation: bladder cancer CI Claim paid

Canadian Cancer Statistics 2012 2012: Newly diagnosed cancers - 53% will be: Lung Colorectal Prostate Breast

CCS 2012 Every hour, an average of 21 Canadians will be diagnosed with some type of cancer Men: # 1 PROSTATE CANCER Women: # 1 BREAST CANCER

Breast cancer: moderately high risk factors* Getting older First degree relative with breast cancer (especially if prior to menopause) Genetics: BRCA 1 or BRCA2 carriers Prior dx of atypical hyperplasia * WebMD.com

Slightly higher risk factors Distant family history: aunt, grandmother, cousin Previous abnormal biopsy No children or first child > age 35 Overweight Early menstruation < age 12 Late menopause > age 55

BUT.. 75% of women diagnosed with breast cancer NO identifiable risk factors* *WebMD.com

Mammogram challenges Screening mammograms miss about 20% of breast cancers that are present at time of screening ( high breast density a key factor ) False positives lead to anxiety and additional testing ( ie: ultrasound/biopsy) Over diagnosis and over treatment

Colon cancer 3 rd most common cancer in Canada 2 nd most common cause of death from a cancer in Canada ( behind lung cancer)

Colon cancer risk factors Age >50 Colon polyp ( adenoma): size and # Family history ( especially at younger age ) Genetic alterations HNPCC and FAP Personal history of cancer (especially ovary, uterus, or breast) Ulcerative colitis or Crohn s disease

Colonoscopy screening Tubular adenoma: depending on # and size: every 3-5 years Family hx, age 60: every 5 yrs, starting age 40 or 10 yrs prior to age of diagnosis

Thyroid cancer 1998-2007 for males 2002-2007 for females Thyroid cancer incidence rates rose on average almost 7% per year

Thyroid cancer risk factors Increasing age Female Exposure to high levels of radiation Family history of thyroid cancer

Points to ponder Know your CI definitions Identify risk factors for cancer Be alert to anti-selection risk Focus on diagnosis/incidence: NOT mortality

Dr. Tim Meagher Medical Director Munich Re

The Underwriter s Concern How do I avoid a claim? An early claim An unexpected claim Any claim at all How do I accurately assess risk, i.e. be fair to the applicant?

CI is all about Incidence Is a covered condition likely to develop in this applicant? Cancer Myocardial Infarction Stroke What are the tip-offs that I can detect at time of application? Predictors of future events The big 3

Predictors Family History Particularly important in CI underwriting Medical History Increased use of APS Lower threshold for laboratory testing Traditional predictors Build

Family History- Breast Cancer Risk varies with Number of first degree relatives affected One affected: RR 1.8 Two affected: RR 2.93 Age at diagnosis of relative RR 2.9 if relative < 30 RR 1.5 if relative > 60

Family History- Breast Cancer Risk increased if Breast and/or ovarian cancer in at least 2 first degree relatives or 1 first and at least 1 second degree relative, especially if: family history of bilateral breast cancer history of male breast cancer history of both breast and ovarian cancer history of early onset breast or ovarian cancer (before age 50)

Underwriting Challenges in CI The challenge of benign lesions The challenge of changing incidence The challenge of non-specific symptoms

Underwriting Challenges in CI The challenge of benign lesions The challenge of changing incidence The challenge of non-specific symptoms

Risk factors for Breast Cancer Age Gender Race Ethnicity Family history Genetic factors Benign breast disease Personal history of cancer Lifestyle, dietary factors Reproductive history Hormonal factors Radiation exposure Environmental factors

F45, $100,000 CI Underwritten March 2003 Family Hx: Mother diagnosed with breast cancer @ 67 Para: Did not disclose breast lump. APS: June 02 Lump noted on BSE. Smooth mass L breast. Mammogram: moderate amount dense glandular tissue which decreases exam sensitivity. U/S: several simple cysts bilaterally. Largest cyst on R measures 1.5 cm. Largest cyst on L measures 1.5cm. No solid lesions but one cyst has a septation and some echogenic debris within it. Dx: simple bilateral breast cysts.(u/s report did not recommend f/up) CPX Feb 03 on exam notes no new masses or cysts.

F 45, $100,000 CI Underwritten March 2003 Case approved STD March 20, 2003 Claimed for breast cancer in 2004 June 2004 noted swelling in her L axilla. Mammogram showed a spiculated mass at 12 o clock L breast and multiple pathologic appearing nodes in the axilla Bx: 3.5cm well differentiated tumour with negative resection margins. Positive lymph node involvement. Dr states: This patient has no prior history of breast cancer, although in retrospect it is felt that this may have been present on a mammogram of 2002 that was read as benign breast disease.

Underwriting Challenges in CI The challenge of benign lesions The challenge of changing incidence The challenge of non-specific symptoms

The Challenge of Changing Incidence: Thyroid Cancer F34 CI $100,000 Healthy Policy issued at standard rates 2009 Carotid bruit detected Jan 2010 Ultrasound of carotid: 1 cm thyroid nodule Thyroid biopsy papillary cancer of thyroid

The Challenge of Changing Incidence: Thyroid Cancer Thyroid Cancer Incidence increasing 1973: 3.6/100,000 2002: 8.7/100,000 Majority are very small papillary cancers Mortality has not changed!

Underwriting Challenges in CI The challenge of benign lesions The challenge of changing incidence The challenge of non-specific symptoms

The Challenge of Non-Specific Symptoms F35 $150K CI 2008 MS in maternal GF?MS maternal aunt Since 2000: Intermittent pains x 2-3d in different areas of body Decreased concentration MRI 2002 N 2010: Constant pain; worsening fatigue

The Challenge of Non-Specific Symptoms PX: decreased sensation in both feet MRI 2 focal areas of demyelination C2 and C4 suggestive of MS or transverse myelitis CSF: + oligoclonal bands Diagnosis: MS

Underwriting Challenges in CI The challenge of benign lesions The challenge of changing incidence The challenge of non-specific symptoms The challenge of anti-selection

CI: Risk Selection Approach is more conservative than with life APS more frequently requested Blood profiles more frequently requested

Critical Illness Claims Challenges Judy Beamish, MD, FRCPC VP & Chief Medical Director Sun Life Financial

Cancer moratorium wording No benefit will be payable for cancer and the Insured Person's coverage for cancer will terminate if within the first 90 days following the later of: the effective date of the policy (coverage), or the effective date of last reinstatement of the policy (coverage), the insured person has any of the following: signs, symptoms or investigations, that lead to a diagnosis of cancer (covered or excluded under the policy), regardless of when the diagnosis is made, a diagnosis of cancer (covered or excluded under the policy). While the Insured Person's insurance for cancer terminates, insurance for all other covered conditions remains inforce.

Case A: PSA and cancer moratorium Effective date of coverage January 1, 2011 PSA ordered January 31: 4.97 (0-4) Result repeated, still abnormal and free/total PSA 11% (intermediate risk of cancer) Referred to urologist on March 10 due to high PSA with low free/total PSA July 16, 2011 biopsy diagnosis of prostate cancer

Case B: PSA and cancer moratorium Effective date of coverage January 1, 2009 PSA March 1, 2009: 5.2 (0-4) Previous PSA s had been elevated at this level or higher for 3-4 years Seen by a urologist in 2006 with PSA of 5.4 normal biopsy in 2007 October 2012 PSA 9.1 -> referred back to urologist December 16, 2012 biopsy diagnosis of prostate cancer

Is case A different from case B? In case A there was a new finding during the moratorium period which led directly to referral and diagnosis of cancer In case B there was nothing new about the elevated PSA during the moratorium period and this did not trigger an investigation leading to a diagnosis of cancer It was the bump in PSA in 2012 that led to the diagnosis

Case C Male 40 $50,000. Group CI policy (Guaranteed Issue) effective 2005 and 2009 Advanced Polycystic Kidney Disease

Definition major organ failure Major organ failure on waiting list which is: major organ failure on waiting list-means a definite Diagnosis of the irreversible failure of the heart, both lungs, liver, both kidneys or bone marrow, and transplantation must be medically necessary. To qualify under major organ failure on waiting list, the Insured must become enrolled as the recipient in a recognized transplant centre in Canada or the United States that performs the required form of transplant Surgery. The date of Diagnosis is the date of the Insured's enrollment in the transplant centre. The Diagnosis of the major organ failure must be made by a Specialist Physician.

Case C APS In view of the continued deterioration, I thought it was appropriate for Mr. to plan, along with his sister for a transplant during the summer. It seems that this will suit both him and his sister well. He was not placed on a waiting list because his sister is going to be the donor

Case C In view of the continued deterioration, I thought it was appropriate for Mr. to plan, along with his sister for a transplant during the summer. It seems that this will suit both him and his sister well. Kidney failure is defined as chronic kidney disease stage 5, with the GFR below 15. He reached this point in March 2011 and at that visit his nephrologist recommended that he and his sister plan for renal transplantation during the summer.

Does he meet the definition?

Case D heart attack Claimant submitted claim for heart attack

Case D APS

Medical Consultant s Review

Hospital Discharge Report

Definition of heart attack Heart Attack is defined as a definite diagnosis of the death of heart muscle due to obstruction of blood flow, that results in: Rise and fall of biochemical cardiac markers to levels considered diagnostic of myocardial infarction, with at least one of the following: heart attack symptoms new electrocardiogram (ECG) changes consistent with a heart attack development of new Q waves during or immediately following an intra-arterial cardiac procedure including, but not limited to, coronary angiography and coronary angioplasty. The diagnosis of Heart Attack must be made by a Specialist. Exclusion: No benefit will be payable under this condition for: elevated biochemical cardiac markers as a result of an intra-arterial cardiac procedure including, but not limited to, coronary angiography and coronary angioplasty, in the absence of new Q waves, or ECG changes suggesting a prior myocardial infarction, which do not meet the Heart Attack definition as described above.

Case E ECG classic findings of acute inferior wall MI Presented with chest pain and bradycardia

Case E Hospital #1 Treated with thrombolysis at hospital #1, then transferred to hospital #2

Hospital #2 Admitted with diagnosis of acute inferior MI, post-thrombolysis Taken to cath lab for angioplasty No troponin done Is this claim payable?

Timing of Release of Various Biomarkers After Acute Myocardial Infarction. Anderson J L et al. Circulation 2011;123:e426-e579 Copyright American Heart Association

Case F - hospital records STEMI Smoker Took cocaine 03/01/2011

What does the contract say? No benefit is payable if the covered condition is caused directly or indirectly by voluntary or involuntary consumption of drugs or participation in any criminal act

Triggers for Acute MI Lancet 2011;377:732-40

What can we conclude? Claims come in for a variety of events many of which don t fit the letter of the definition Hospital records are essential Medical expertise required for cases that don t quite fit What is the intent of the definition?

Questions?