Industry events
AHOU
SelectX directors Susie Cour-Palais and Gary Bundock attended the 2010 AHOU (Association of Home Office Underwriters) meeting which took place in San Antonio, Texas between April 11th and April 14th.
We attended a number of conference sessions and also co-hosted a stand at the trade exhibition with Hank George.
The key note speaker for the opening day of the conference was Dr Sanjay Gupta who is a neurosurgeon and medical consultant to CNN. His presentation gave a unique insight into not only being a journalist in war zones but the challenges of being a neurosurgeon in seemingly impossible circumstances. His account of using a Black & Decker drill to save the life of a soldier with a bullet lodged in his skull was simply staggering.
As always, there were a number of interesting and engaging presentations and workshop sessions throughout the meeting. Highlights include:
Dr Marianne Cumming, Medical Director Swiss Re spoke about the underwriting challenge of chronic pain focusing on the wide variety of regimes being used to treat a very common complaint affecting one third of Americans (see our own articles elsewhere on this web site).
Treatment is all too often ineffective with two thirds of patients reporting persistent pain after two years. Those with chronic pain often have coexisting psychiatric co-morbidities and have a three fold increase in suicide. Dr Cumming also commented upon the use of medicinal marijuana.
Also from Swiss Re, Chief Medical Director, Dr Michael Clark spoke about current controversies in diabetes and coronary artery disease underwriting. He commented that female diabetics fare less well than their male counterparts and, where they have complications, mortality is very high. This appears not to be related to the risk of CAD but is probably related to the increased risk of stroke and renal disease.
Diabetic survival improves with age at diagnosis but female lives have higher mortality rates at each age band. Above age 40, mortality is the same for Type 1 and Type 2 diabetes. The UKPDS (United Kingdom Prospective Diabetes Study) reveals that cholesterol and blood pressure control are much more important prognostic indicators than Hba1c levels with statins having the most impact on diabetic mortality.
A session called ‘Ask Your Reinsurer’ conducted a number of on the spot surveys whilst quizzing the panel on a variety of topical issues. Some areas of interest were:
- 80% of the audience believed that the main objective of reinsurance audits is to check compliance with underwriting philosophy while a minority believed that audits aim to assist with better pricing
- 70% of direct writers believe that facultative support from their reinsurer is essential, however most reinsurers are increasing their limits for the submission of facultative cases
- The audience was asked about the number of reinsurance underwriting manuals they use:
29% use 1 manual
44% use mostly 1 manual
17% use 2 or 3 manuals
10% use their own proprietary manual
In a well-attended session on the use of data mining in risk profiling and assessment, Bruce Coates of LexisNexis and Chris Stehno of Deloittes Consulting, discussed the use of credit information, lifestyle data and even purchasing choices in both pricing and underwriting. In the P&C world, pricing and modelling of risk using external data sources has been used for at least two decades – in auto insurance there are over 100 rating plans based upon such data, and the question was asked how similar techniques could be brought to life insurance.
In life underwriting, the combination of MIB, MVR (motor vehicle record) and treatment profile (Rx) data, together with carefully chosen ‘drill-down’ health questions in a rules engine environment, is already resulting in the design of underwriting models which aim to replicate the mortality experience of fully underwritten business. But what else can be pulled into the mix to improve the accuracy of our pricing assumptions?
Credit scores (used routinely by lenders), measure the propensity to pay bills. There are correlations between a credit score and the ability of a person to manage their affairs generally – not just financially, but also possibly their health. Proxies for credit records (which insurers may not have access to) include public record information such as asset ownership and court records. LexisNexis has access to over 2000 public record databases and systems which can store, aggregate and connect this information.
Chris Stehno generated a robust debate about using information such as marital status, number of TVs per household, hours per day spent watching TV (... and when and what is watched), dietary choices and commuting distance in mortality models.
Not surprisingly, privacy legislation and the views of regulators loom large in these debates, and the industry needs to take care not to alienate consumers.
Finally, Bruce commented that new sources of data for underwriters could include electronic health records (EHRs) and social media websites including Facebook and LinkedIn ...
... which leads us to another fascinating session we attended on social networking media which is a rapidly growing area with 46% of Americans using social media compared with only 5% five years ago. Twitter, which did not exist five years ago, attracts 28 million unique visitors per month although Facebook leads the way with over 93 million unique visitors per month.
LinkedIn remains the primary network for business users and you may be forgiven for questioning where this has an application for the financial services industry. But some companies are already using social media sites to not only promote their businesses but better serve their clients. There was also some discussion on whether social media was likely to have any impact on underwriting or claims handling.
This is an interesting subject and one we will return to in a specific article at a later date.
The trade Expo was interesting with over 50 exhibitors including reinsurers, software companies and service companies. It was good for us to see many old friends and welcome others who were previously unfamiliar with SelectX.
We shared our booth with Hank George of Hank George Inc and Graham Spark of MML solutions where we demonstrated a prototype of what we believe is the future for underwriting manuals. Expect more from us on this subject in the very near future.
Downloads of the various brochures available from our stand are available - just click on the title(s) below:
A copy of the rolling presentation shown on our ‘big screen’ is also available here.
It was good to see our friend Hank George recognised at the conference with a lifetime achievement award both from the main conference platforms and at the Presidential luncheon, hosted by Tom McCarthy of Swiss Re. We add our congratulations to Hank for his concerted efforts over many years to promote the underwriting profession around the globe.
The conference closed on Wednesday 14th April and after a thoroughly enjoyable visit to San Antonio, we were looking forward to getting home. Little did we know that a volcano in Iceland would extend our stay by a further six days!
To see photographs from the AHOU conference click here.
SelectX at ICLAM
SelectX and its partner company Indutech hosted a stand at this year’s ICLAM conference, held in Cape Town from 7-10 February. Having done a lot of joint product development work on our New Business Healthcheck, we decided to travel to Cape Town to finalise a few details, promote the Healthcheck (and our other wares) at ICLAM and to meet some local companies.
The excellent ICLAM programme, a welcome volume of visitors to our stand and some interesting meetings made for a worthwhile trip for Susie and Peter. The South African hospitality and summer sun happened to be a pleasant bonus...
The photograph above shows the stand and its hosts from ICLAM: (L-R) Niek Du Preez (CEO, Indutech), Susie, Peter, Mariska Du Preez, Heinz Essman.
