Misconceptions demystified Life and Critical Illness Insurance. Kris Boundy

Transcription

1 Misconceptions demystified Life and Critical Illness Insurance Kris Boundy 2014

2 Reinsurance Slows Down Life Insurance Sale

3 Role of Reinsurance Risk Transfer Product Development and Pricing Support Claims/Underwriting Support Market Insight

4 Actually... Consistency in Industry Industry guidelines, underwriting manuals, claims best practices Reinsurance is used by virtually all companies, not dependent on company size Family Market Majority of cases do not require reinsurer involvement Reinsurer Consultation for Large and Complex Cases

5 No Critical Illness Sales Potential

6 Sales Growth Individual Life and Critical Illness New Business Premium Growth % 20 Life Total Critical Illness Total Source: 2013 Munich Re Individual dashboard

7 Advisor Sales 2011 Active Advisors % of active advisors generating 75% of NB Premium % of active advisors generating at least 12 policies per year Individual Life 18% 20% Critical Illness 33% 8% Source: 2012 Munich Re Individual Survey

8 Juvenile CI Critical Illness All Product Averages % Juvenile by Face 20 Market Source: 2013 Munich Re Individual dashboard

9 Sales Trends Critical Illness - % with ROP by NB Premium Term Level Pay Perm Source: 2013 Munich Re Individual dashboard

10 Critical Illness is Too Expensive

11 Critical Illness Critical Illness Benefit Need Alternative Treatment Options Drugs not covered Housekeeping Childcare Even a small policy would alleviate financial stress of diagnosis Probability of CI before age 65 = 20% Probability of Death before age 65 = 5% Source: Munich Re

12 Actually... Average Face Amount Sold Life 2012 Average Face Amount = $314K Critical Illness 2012 Average Face Amount = $87K CI Compensation Higher Reflects Lower Need Worth Effort for smaller face $50K CI Policy first year commission on average is equivalent to selling a $415K Term Life Policy Source: 2012 and 2014 Munich Re Individual survey

13 Critical Illness is Difficult To Place and Takes Too Long

14 Actually New Business Placement Rate Individual Life CI 78% 74% Source: 2013 Munich Re Individual Insurance Dashboard

15 Underwriting Product Comparison Product Comparison Life CI Trigger Death Diagnosis of a covered condition and survival Consumer Motivation Benefit Payouts + Financial Planning Benefit Payouts Minimum Rating +50% +25% Risk Factors Build, BP, Cholesterol, Diabetes, Smoking, Mental Nervous, Avocation Family History, Cardio and Cancer symptoms and history Claims Cardiovascular Cancer Cancer Heart Attack Evidence Required Blood, Urine, saliva, PM / Med exam, APS, IR, ECG, stress ECG Blood, PSA, Urine, saliva, PM / Med exam, APS, IR, ECG 15

16 Example - Build lbs Life Decision Standard CI Decision +25%

17 Example Psych Applicant diagnosed bipolar 2 years ago, on medication and stable for last 18 months. Life Decision +100% CI Decision Standard

18 Example Family History An applicant with a brother diagnosed with heart attack at 50 and mother diagnosed with a stroke at age 52. Life Decision Standard CI Decision +50%

19 Critical Illness Claims Are Not Paid

20 Can you guess the $ Amount of CI Claims Paid Since Inception? > $1 Billion Source: 2014 Munich Re Individual survey

21 CLAIMS Claim Paid in the Non-Contestable Period % of claims Individual Life Contestable Non-Contestable Paid 70% 98% Non-Paid 30% 2% Critical Illness Contestable Non-Contestable Paid 68% 86% Non-Paid 32% 14% Source: 2013 Munich Re Individual dashboard

22 CI Claims Experience Reason for Non-Payment of Critical Illness Claims Definition is not fully met 42% Moratorium Period Exclusion 8% Died with in Survival Period 2% Condition Claimed is not covered Rescinded/Material Misrepresentation No Reponse from Claimant 20% 20% 8% Source: Munich Re 2012 Individual Insurance Survey 22

23 CLAIMS Critical Illness Claims Paid Since Inception % Paid Cancer Heart Attack Stroke MS Coronary Bypass Other Conditions 68% 13% 5% 3% 4% 7% Source: Munich Re 2012 Individual Insurance Survey

24 Misconceptions demystified 1) Reinsurance slows down Life Insurance Sale 2) No Sales Potential with CI 3) Critical Illness is Too Expensive 4) Critical Illness is Difficult To Place and Takes Too Long 5) Critical Illness Claims are not paid 24

25 Life Travel Guidelines

26 Foreign Travel Underwriting Guidelines Relevant Information Rating of Country being traveled to Length of Travel Underwriting Impact Standard Rating or Travel Exclusion Decline

27 Underwriting Foreign Travel Crime Kidnapping War Accidents Disease Access to medical care Fraud

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