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Future trends and risk

in critical illness and cancer products


Alissa Holz
SVP & Chief Pricing Actuary Asian Markets

Predicting the Future

The Future of the Offer


The Future of the Inforce Management
The Future of the Claims Management
What this means for the Actuary of the Future

THE FUTURE OF THE OFFER

Marketing Historically
Focussed on Choice
Crayola Colour Chart 1903-2010

Crayolas Law : The number of colors double every 28 years Velo

Critical Illness 1984-2014

CI Law: The number of impairments covered double every 3 years ..?

Future Marketing Focus


on Right Offer at Right Time
The Big Data movement is pushing the world to HyperPersonalization
Consumers will expect individualized offers and seamless
customer experiences through omni-channel interactions

THE FUTURE OF INFORCE MANAGEMENT

There will be changes in


Incidence
Historical experience gives limited insights to future experience.
Insured data is likely to be too volatile to ascertain trends.
Actuaries should be looking to adjusted population experience for
benchmarking. Specifically considering
changing medical drugs, procedures and reporting
changing societal risk factors and what this means for the portfolio,
including cohort effect from smoking
any ex gratia claims and their implications for future claims
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There will be changes in


Diagnosis
Diagnosis and Terminology is being constantly reviewed
Troponin Testing
Implementation

cTn Assay

Diagnostic Cutoff

1995

Tnl

1.5 ng/mL

2003

cTnl

0.1 ng/mL

2007

Tnl_Ultra

0.04 ng/mL

Cancer
ICD-O-2 to ICD-O-3
Borderline

Malignant

18 Terms

Malignant

Borderline

24 Terms

Sources:
Bhoi, S., Verma P., Vankar S., Galwankar S. High Sensitivity Troponins and conventional troponins at the bedside. Int J Crit Illn Sci 2014;4: 253-6
Guidelines for ICD-O-3 Implementation, 2000, North American Association of Central Cancer Registries, accessed 30 October 2015
<https://www.facs.org/~/media/files/quality%20programs/cancer/coc/naaccr.ashx>

There will be changes in


Diagnosis
Alzheimers Disease and other Dementias
The unequivocal diagnosis of Alzheimers disease or other dementia, confirmed by a consultant
neurologist or geriatrician. The diagnosis must confirm permanent and irreversible failure of the brain
function with cognitive impairment for which no other recognisable cause has been identified. A MiniMental State Examination score of 24 or less is required.

2011 Diagnostic Guidelines significantly changed the unequivocal diagnosis or Alzheimers


Disease
30% brains in non demented people satisfy pathology criteria for Alzheimers disease

Source: The 2011 Diagnostic Guideline for Alzheimer's Disease US National Institute of Aging/ Alzheimers Association , 2011, The Hong Kong Medical Association, accessed 30 October 2015 <
http://www.hkma.org/english/cme/onlinecme/cme201112main.htm >

There will be
Overdiagnosis
Testing capabilities are increasingly sensitive
Detecting disease that may otherwise never be diagnosed
Leading to overdiagnosis

0.1%

Source: Welch H & Black, W.,Overdiagnosis in Cancer , J Natl Cancer Inst 2010; 102:605-613

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There will be
Overdiagnosis
Overdiagnosis will impact insurers even if there are no population
based screening programs

Condition

Level of Overdiagnosis

Asthma

30% asthmatics may not have asthma

ADHD

30% higher risk of diagnosis if born at school year end

Chronic Kidney Disease

10% prevalence with new definitions (1:8 Australia)

Breast Cancer

33% screen detected may be overdiagnosis - SEER

Prostate Cancer

60% PSA detected may be overdiagnosis

Lung Cancer

25% screen detected may be overdiagnosis

Thyroid Cancer

Observed increase largely overdiagnosis

Moynihan R., Doust J., Henry D., Preventing Overdiagnosis: how to stop harming the healthy, BMJ 2012;344:e3502

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There will be changes


in Demographics
Tobacco use causes around 20% of cancer deaths
Excess risk of smoking increases by increased age of
smoking cessation

12
: CDC Foundation et al, The Global Adult Tobacco Survey, 2015, World Health Organisation accessed 30 September 2015, <http://www.who.int/tobacco/publications/surveillance/gatstlas/en/>

There will be changes


in Demographics
Chronic Infection causes around 20% of cancer deaths
Immunization programs will impact the cancer rates by
cohort and potentially more broadly

WHO Vaccine-Preventable diseases: monitoring system. 2015 global Summary , 2015,


World Health Organization accessed 30 September 2015
<http://apps.who.int/immunization_monitoring/globalsummary/estimates?c=VNM>

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There will be
Reserving Issues
We will start seeing the impact of second and subsequent
benefits

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There will be
Reserving Issues
Multipay CI = (1+P(Bi|Ai))* P(Ai)
P(Bi|Ai) driven by complications, progressions and
shared risk factors.
For pricing the result is a X * X matrix of risks
First Event : Cancer
Complications

Some Cancer treatments are cardio-toxic

Progressions

May result in major organ failure, stroke etc.

Shared Risk Factors

Higher cancer rates associated with smoking


which is also associated with hypertension

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There will be
Reserving Issues
However
Claim reserves for 2nd and subsequent claims are set
when first claim is paid
For reserves E(Bx|Ax) E(B|A)
2nd claims Reserves should be related to ALL known information about the
individual policyholder.
EG. First Event : Major Burn
However through the claim process you also know they now have dangerously high hypertension
Reserves should be set appropriately.
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Future Inforce Management


There will be growing complexity in managing our
portfolios
Claims and Trends will emerge differently to Best
Estimate
Historical experience does not indicate future experience
Reserving will be important

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THE FUTURE OF CLAIMS MANAGEMENT

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Consumer Friendly Definitions


Third Universal Definition of Myocardial Infarction
The term acute myocardial infarction (MI) should be used when there is evidence of myocardial necrosis in a
clinical setting consistent with acute myocardial ischemia. Under these conditions any one of the following
criteria meets the diagnosis for MI:
Detection of a rise and/or fall of cardiac biomarker values [preferably cardiac troponin (cTn)] with at least one
value above the 99th percentile upper reference limit (URL) and with at least one of the following:
Symptoms of ischemia.
New or presumed new significant ST-segmentT wave (STT) changes or new left bundle branch block
(LBBB).
Development of pathological Q waves in the ECG.
Imaging evidence of new loss of viable myocardium or new regional wall motion abnormality.
Identification of an intracoronary thrombus by angiography or autopsy.

Singapore CI Heart Attack Definition


Death of a portion of the heart muscle arising from inadequate
blood supply to the relevant area. This diagnosis must be
supported by three or more of the following five criteria which
are consistent with a new heart attack:
History of typical chest pain;
New electrocardiogram (ECG) changes proving infarction;
Diagnostic elevation of cardiac enzyme CK-MB;
Diagnostic elevation of Troponin (T or I);
Left ventricular ejection fraction less than 50% measured 3
months or more after the event.

Cardiac death with symptoms suggestive of myocardial ischemia and presumed new ischemic ECG changes or
new LBBB, but death occurred before cardiac biomarkers were obtained, or before cardiac biomarker values
would be increased.
Percutaneous coronary intervention (PCI) related MI is arbitrarily defined by elevation of cTn values (>5 99th
percentile URL) in patients with normal baseline values (99th percentile URL) or a rise of cTn values >20% if
the baseline values are elevated and are stable or falling. In addition, either (i) symptoms suggestive of
myocardial ischemia or (ii) new ischemic ECG changes or (iii) angiographic findings consistent with a procedural
complication or (iv) imaging demonstration of new loss of viable myocardium or new regional wall motion
abnormality are required.
Stent thrombosis associated with MI when detected by coronary angiography or autopsy in the setting of
myocardial ischemia and with a rise and/or fall of cardiac biomarker values with at least one value above the
99th percentile URL.
Coronary artery bypass grafting (CABG) related MI is arbitrarily defined by elevation of cardiac biomarker
values (>10 99th percentile URL) in patients with normal baseline cTn values (99th percentile URL). In
addition, either (i) new pathological Q waves or new LBBB, or (ii) angiographic documented new graft or new
native coronary artery occlusion, or (iii) imaging evidence of new loss of viable myocardium or new regional wall
motion abnormality.

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Consumer Friendly Definitions


Cervix uteri
ICD O-3 topogragphy code:

Early Stage Cancer Definition

C53

A malignant neoplasm confined to the epithelium without invasion of the


underlying tissues
The term carcinoma in situ of the cervix is synonymous with and has
been replaced by cervical intraepithelial neoplasia CIN 3.
http://codes.iarc.fr/code/89

Carcinoma In Situ of the following sites: cervix. etc

Clinical diagnosis or Cervical Intraepithelial Neoplasia (CIN)


classification which reports CIN I, CIN II, and CIN III (severe
dysplasia without carcinoma in situ) does not meet the
required definition and are specifically excluded.

Grading System for Dysplasia, Pathology Department of Shantou University Medical College, accessed 30
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October 2015, < http://pathol.med.stu.edu.cn/pathol/listEngContent2.aspx?ContentID=634>

Consumer Friendly Definitions


Some countries are seeing further changes in the reporting
of their histopathological reporting of cervical cancer
Eg claim for CIS cervix 2015
histology report of cone biopsy

Goldstones S., Diagnosis of Treatment of HPV-Related Squamous Intraepithelial Neoplasia, 2005, The PRN Notebook, accessed 30 September 2015
<http://www.prn.org/images/pdfs/82_goldstone_stephen.pdf>

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The Future of Claims Management


Insurance definitions are moving to consumer friendly wording to
assist at point of sale. This is in contrast to medicine which is
moving to more precise disease classification & treatment
strategies
There will be reputational and regulatory difficulty in declining
claims to policyholders that have a definitive diagnosis regardless
of policy wording

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WHAT THIS ALL MEANS FOR THE ACTUARY


OF THE FUTURE

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The End of the


Actuarial Control Cycle?
The silo mentality of the Actuarial Control Cycle will do
little to assist us in the future
Monitoring will not tell us the drivers of the future
experience.

Time

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Products Require
Collaboration
Organisations that are collaborative and utilize collective
intelligence will be best placed to lead
Similarly actuaries who are collaborative will be best
placed to understand and manage this highly important
product into the future.

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The Actuary of the Future


Goal

What We Do

How we do this
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Q&A

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Thank you

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