Critical Illness Products in South Africa

Transcription

1 Critical Illness Products in South Africa An overview 1 ICA Cancun Critical Ilness

2 Agenda Historical development Trends & recent developments in product design Market statistics 2 ICA Cancun Critical Ilness

3 A rose by any other name... Dread disease Critical Illness Severe Illness Living assurance benefits Trauma assurance 3 ICA Cancun Critical Ilness

4 Historical Development 4 ICA Cancun Critical Ilness

5 First product Company: Crusader Life Reinsurer: GeneralCologne Re Developer: Dr. Marius Barnard Aim: To provide for financial needs following severe or life-changing events First sale: 1983 First claim: 1 December 1984 GeneralCologne Re pricing model published in ICA Cancun Critical Ilness

6 Historical Evolution First product covered 4 conditions Heart attack Stroke Coronary artery disease requiring surgery Cancer These conditions cover 90% of all claims 6 ICA Cancun Critical Ilness

7 Historical Evolution In South Africa Further 8 ( core definitions) Developed to a further 21 ( extended definitions) Now differing severity level critical illness coverage Some are not diseases or illnesses but surgeries or states of health Currently 58 conditions covered world wide 7 ICA Cancun Critical Ilness

8 Trends & Recent Developments 8 ICA Cancun Critical Ilness

9 Trends & recent developments Medical Advances Product differentiation & niche focusing Product enhancements 9 ICA Cancun Critical Ilness

10 Medical Advances Disease detection has improved E.g. smaller heart attacks can be detected Need to revise definitions Treatments have improved These micro events led to severity levels 10 ICA Cancun Critical Ilness

11 Product Differentiation & Niche Focus More varied product designs than life assurance By company Definitions & benefits Niche Focus by target market By country/region Medical definitions Different disease prevalence 11 ICA Cancun Critical Ilness

12 Product Differentiation & Niche Focus Driving Forces of differentiation Grow market size Grow market share Be perceived as innovative Reduce cost Reduced commoditisation Increase profitability 12 ICA Cancun Critical Ilness

13 Product Enhancements New product development: Severity Levels First seen in 2000 in SA Innovative Comprehensive product with lower rates Cover families under one policy Three condition categories Flexibility 13 ICA Cancun Critical Ilness

14 Conditions Category 1 May select any or all of a group of core conditions Category 2 If all in category 1 are selected, these are automatically covered Category 3 Optional or stand-alone conditions Flexible to cover needs of family 14 ICA Cancun Critical Ilness

15 Severity Levels Benefit payments are linked to severity levels Severity levels are determined by pre-defined objective medical definitions Multiple payments are allowed for single or multiple conditions Cover is selected for Severity levels A-D (100%, 75%, 50%, 25%) or A-G (100%-5%) 15 ICA Cancun Critical Ilness

16 Example - Cancer Severity Levels Level Definition Benefit paid A B C D Stage 4: tumour extending beyond organ with nodes and/or distant metastases Stage 3: tumour within organ with re-gional lymph node spread Stage 2: tumour invading organ, no lymph node involvement Stage 1: primary tumour site with no spread within organ 100% 75% 50% 25% E Carcinoid syndrome or pre-leukemia syndrome 15% G Basal cell carcinoma >4 cm, squamous cell carcinoma >4 cm, prostate cancer T1N0M0 5% 16 ICA Cancun Critical Ilness

17 Market reaction Heated debate among competitors Brokers finding comparisons difficult Product is well received in market Selling well 17 ICA Cancun Critical Ilness

18 Market Statistics 18 ICA Cancun Critical Ilness

19 Industry Experience: Males vs Females (Source: ASSA CSI Dread Disease Investigation ) Males Females ICA Cancun Critical Ilness

20 Industry Experience: Males vs Females (Source: ASSA CSI Dread Disease Investigation ) Males Females ICA Cancun Critical Ilness

21 Industry Experience: Males/Females vs Mortality (Source: ASSA CSI Dread Disease Investigation ) SA85-90 Males Females ICA Cancun Critical Ilness

22 Male experience by duration Duration 0 Duration ICA Cancun Critical Ilness

23 Male experience by sum assured SA < R SA >= R ICA Cancun Critical Ilness

24 Male experience by sum assured and duration SA < R SA >= R Duration 24 ICA Cancun Critical Ilness

25 Comparing SA and Asia - Males SA85-90 Observed SA Rate Graduated DD Survey ICA Cancun Critical Ilness

26 Comparing SA and Asia - Females SA85-90 Observed SA Rate Graduated DD Survey ICA Cancun Critical Ilness

27 Claims breakdown - Males GeneralCologne Re SA Asian Dread Disease Survey 3% 8% 1% 11% 14% 4% 16% 37% Heart Attack Cancer Coronary Artery Stroke Kidney Failure Other 6% 7% 36% 58% 27 ICA Cancun Critical Ilness

28 Claims breakdown - Females GeneralCologne Re SA Asian DD Survey 0% 0% 7% 0% 4% 4% 2% 6% 1% 0% Heart Attack Cancer Coronary Artery Stroke Kidney Failure Other 89% 86% 28 ICA Cancun Critical Ilness

29 Questions??? 29 ICA Cancun Critical Ilness