Turning the world on its head

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Turning the world of insurance on its head, that is. We are just back from the Society of Actuaries’ annual ‘Underwriting Issues and Innovations’ seminar in Chicago, where we go to learn what is happening in what one might call paradoxical North American markets where underwriting sophistication and tradition have very different meanings compared with most other places. In North America, and in the US especially, underwriting to the nth degree via blood and urine tests for purposes of preferred-life categorisation is still king and advanced underwriting engines are a rarity. But things are changing, and in two ways. One, insurers…

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Cancer risks: Are we getting them right?

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Researching cancer mortality over the past few months has proved to be a bit of an eye-opener, and in three ways: firstly the level of excess mortality seen in a number of cancers, secondly the duration over which an extra risk persists, and thirdly that excess mortality may extend over a considerable period. Some of the high excess death rates (EDRs) were noted stage II/III disease, where mortality was substantially higher than in localised. For example, from the US Surveillance, Epidemiology and End Results (SEER) Program1 relating to diagnoses between 2006 and 2012: Cervical cancer: five-year relative survival for localised…

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Is it time to ditch rating tables?

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By Dr Kevin Somerville Ah, rating tables – convenient, elegant and simple. They’ve been used for decades and even a trainee underwriter can use them. So much easier to understand than those calculators and so much easier to compare the offerings in the various underwriting manuals and complain that ratings are too high or low… Besides there’s the current mantra in the market: simplicity. Tables have the virtue of being as simple as we want them to be. Yet there’s a problem that refuses to go away: actuarial risk pricing. Actuaries price for the risk to multiple decimal places on…

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Underwriting and calculators

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On our travels we speak to a lot of people about underwriting manual developments. One topic which comes up time and again is calculators: great invention or the work of The Devil? Some underwriting manuals have had simple calculators for many years, for example for pulmonary function tests, financial ratios and BMI, all of which are designed to help the underwriter by speeding up and simplifying assessment. In recent years calculators have increased in number and complexity. There are calculators for overall cardiovascular risk, coronary heart disease itself, breast and skin cancer, liver function tests, and even occupation risks. In…

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How do you sleep?

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In our articles on wearables and insurance products we highlight that some insurers, in addition to the step count measured by a wearable device, also use sleep duration as one of their criteria for policyholders to gain premium discounts. Sleep plays a vital role in mental and physical well-being, quality of life and safety. Sleep helps the brain to function correctly and during sleep the brain prepares for the following day. A good night’s sleep aids the ability to learn and concentrate, while not enough sleep can affect later brain activity leading to reduced creativity and decision-making. Sleep deficiency can…

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Jigglypuff or out of puff?

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Do you know a Jigglypuff from a Squirtle? If not then you may have missed one of the biggest things of 2016. Pokémon GO was one of the most popular apps of 2016 with over 500 million downloads. It is a free, location-based, augmented reality game developed by Niantic in collaboration with Nintendo through the Pokémon company. Players use the GPS capability of their mobile device to find, capture and battle virtual creatures called Pokémon. These appear on the screen as though they were in the same location as the player who appears as an avatar on the real world…

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Wearable technology – two different perspectives

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We have written before about wearables from a number of different angles, including Gary’s perspective as an owner in August 2015. Time for an update. It’s now almost eighteen months since I bought the Fitbit HR. Let’s start with some of my numbers: Steps taken: ranged from a daily low of 5,500 to a highest of 35,000 in a day (which included a gym visit and a full-on day of sightseeing in New York). 36 holes of golf in a day results in around 28,000. Average daily steps around 15,000. Miles walked: lowest day 5.3 miles, highest day 24.5 miles;…

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The real digital health?

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So far in our articles we have been pretty positive about all aspects of e-health, digital health, e-medicine, wearable devices, etc, and what these will bring. And of course Gary is a pretty enthusiastic Fitbit wearer. But there are a few potential ‘trip hazards’ with underwriting significance. Are wearables really going to be a rich source – or even a reasonably useful source – of data for risk evaluation purposes? For a start, these devices are not very accurate. Can something on your wrist really make a decent job of totalling your step count and recording your pulse? They are…

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Serum cholesterol: mounting evidence against?

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The British Medical Journal (BMJ) has just published a study the findings of which suggest that replacing saturated fats with vegetable oils rich in linoleic acid does not reduce the risk of coronary heart disease (CHD)1. Using data from the Minnesota Coronary Experiment (MCE) which was a double-blind randomised trial conducted in the late 1960s/early 1970s, researchers found that linoleic-rich vegetable oil effectively reduced cholesterol levels but without any corresponding reduction in CHD or all-cause mortality. In fact, participants who had a greater reduction in blood cholesterol had a higher, rather than lower, risk of death: there was a 22%…

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On the cusp of a revolution?

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The process of life and disability underwriting varies from market to market. Those variations as they exist today have been driven by the prevalence of risk factors and the availability of reliable risk information, and not a little by history and culture (of consumers and of the industry itself) too. That differences in practice and process will persist is certain, as is that markets will develop at varying pace. But one cannot help but wonder whether underwriting is on the cusp of a real revolution. That revolution will be driven by ‘predictive modelling’, by which we mean the use of…

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