DSM-V

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The publication of the fifth version of the Diagnostic and Statistical Manual of Mental Disorders – usually referred to simply as ‘the DSM’ – is due round about the time you receive this edition of Underwriter e-Alert. (We’re naturally pleased but it may be only coincidence at work.) This mighty reference work from the American Psychiatric Association is not just the ‘bible’ by which psychiatric conditions are classified and diagnosed; the DSM is used the world over by researchers, drug regulation agencies, pharmaceutical companies, and policy makers – and by insurance companies, especially health insurers. Compared with DSM-IV, edition V…

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The future of protection?

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This was the title of an interesting conference that took place in London in 2013. While it was focused on the UK, a number of the issues addressed are pertinent across the globe. So what is the future of the protection market – that is, primarily the market for term life? Or, possibly more fundamentally, does the protection market have a future? There was lot of discussion around the so called ‘protection gap’. This is the vast difference between the total face amount nationally of theoretically adequate levels of protection coverage and what is actually in place. Swiss Re estimates…

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The future of risk screening

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Several of the sessions at the ICLAM meeting at the end of May 2013 in Madrid dealt with predicting cardiovascular risk. The ECG, and especially the resting trace, is a pathetically weak tool alongside the heavyweight imaging techniques – but at least it’s cheap. Of modern, sophisticated tools like the stress echo, stress single-photon emission computed tomography (SPECT), stress MRI and CT coronary angiography, it is apparently the last-mentioned that is the most powerful in identifying lesions and thus predicting risk. But we should not forget coronary calcium scoring, carotid artery 3D ultrasound scanning and 2D carotid scanning to determine…

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Marketing-oriented underwriting

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The previous article illustrates the need to tailor the ‘underwriting mix’ to the rest of the marketing mix in order to create both an appealing customer proposition (and traditionally an appealing producer/broker proposition too) and a profitable source of revenue for the carrier. In the past, generally one underwriting mix would do – products were sold via intermediaries and there was seen to be little need to vary product design or processes between agent and broker channels. Today, though, it’s a whole different ball game. Direct-to-consumer (DTC) offers are more common. The Internet has revolutionized communicating and transacting. There is…

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Underwriting meets marketing

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In marketing (by which we mean ‘running businesses profitably’ and not advertising/promotion, account management or selling stuff) they talk of ‘the four Ps’: Product Price ‘Place’ (ie distribution channel) Promotion. Together these elements are known as the marketing mix, and they combine to form the basic proposition that is offered to customers; tailor the mix to your target audience and you have the right product at the right price, sold in the right way, backed up by advertising and other forms of promotion that create awareness and demand. For service industries – life insurance is a good example – three…

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Insurability and HIV

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We were fortunate to attend two very good lectures on HIV/AIDS in 2013, one by Dr Daniel Zimmerman of Northwestern Mutual at the annual AHOU meeting, and the other, by Dr Rogelio López-Vélez, at the ICLAM meeting in Madrid. Both speakers described the HIV/AIDS spectrum and the impact of HAART (highly active antiretroviral treatment – now available in fixed-dose combinations as a single pill, which makes for much better patient compliance), ending up by discussing the potential for insurability. There is no doubt that modern treatment – for those for whom it is available – has transformed HIV/AIDS from a…

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How significant is cholesterol?

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Received wisdom is that cholesterol is a significant risk factor for the development of atherosclerosis, and for coronary heart disease (CHD) in particular. Bowden and Sinatra, in their book The Great Cholesterol Myth1, explain how historically too much importance has been attached to cholesterol as a cardiovascular (CV) risk factor, how lipid-lowering trials have yielded results that have been at best inconclusive, that eating saturated fat actually lowers serum cholesterol, and how occlusive vascular disease arises as a result of endothelial inflammation, an excess of dietary glucose and one’s inadequate reaction to the stresses of life.   Their arguments are,…

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When the applicant knows more…

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When the applicant knows more than the underwriter there is always a heightened risk of antiselection. In the past people didn’t know much about their health and wellbeing, but their physician did, which is why the APS has been such a valuable underwriting tool, such a reliable source of medical information. For as long as it is available the APS should continue its role in the underwriter’s defensive armory, but increasingly it is no longer the sole source of historical medical information about the applicant. Thanks to technology, applicants are getting to know a lot more about themselves. Consider the…

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Not just predictive analytics: keep your eye on technology

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Predictive analytics (also referred to as ‘predictive modelling’): is it the future? It is if you listen to firms that are taking a keen interest in, or even specialize in, ‘big data’. Firms like BioSignia, Deloitte, Towers Watson and Milliman are intent on getting the ear of carriers, and even reinsurers like RGA and Swiss Re are getting in on the act. According to Deloitte, there are 40 data vendors out there and around 100 databases to draw upon. Also, they have a database that includes every adult in the US, all derived from publicly available information. Sounds like powerful…

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