Hostname: page-component-5c6d5d7d68-wbk2r Total loading time: 0 Render date: 2024-08-15T03:29:25.886Z Has data issue: false hasContentIssue false
  • English
  • Français

Initial Selection and Cause of Disability for Individual Permanent Health Insurance

Published online by Cambridge University Press:  29 August 2014

María Cristina Gutiérrez-Delgado  and
Athol A. Korabinski
María Cristina Gutiérrez-Delgado*
Affiliation:
Department of Actuarial Mathematics and Statistics, Heriot-Watt University
Athol A. Korabinski*
Affiliation:
Department of Actuarial Mathematics and Statistics, Heriot-Watt University
*
Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh EH 14 4AS, United Kingdom, E-mails: c.gutierrez@ma.hw.ac.uk, a.a.korabinski@ma.hw.ac.uk
Department of Actuarial Mathematics and Statistics, Heriot-Watt University, Edinburgh EH 14 4AS, United Kingdom, E-mails: c.gutierrez@ma.hw.ac.uk, a.a.korabinski@ma.hw.ac.uk
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

We investigate the influence of initial selection (the impact of underwriting during the early years of a policy's life) on individual Permanent Health Insurance claim inceptions. In Gutiérrez-Delgado (1999) a decreasing trend was found. In this paper we include the effect of cause of disability and fit a generalized linear model in order to gain a greater understanding of the phenomenon. Both effects, policy duration and cause of disability, are found to have a significant effect on the number of claims. We describe their influence using factors that collect the information available through the fitted model. Results from both factors suggest that the grouping of diseases selected for the research helps to explain partially our earlier results. In addition there is some evidence of moral hazard in mental disorders and musculoskeletal diseases which also contributes to the understanding of the negative trend found.

Keywords

Permanent Health InsuranceDisability Income InsuranceIncome Protection InsuranceClaim InceptionsInitial SelectionCause of DisabilityGeneralized Linear ModelsMoral Hazard
Type
Workshop
Information
ASTIN Bulletin: The Journal of the IAA , Volume 30 , Issue 2 , November 2000 , pp. 369 - 389
Copyright
Copyright © International Actuarial Association 2000

References

A.D.C. (1998) 1997 Report of the Disability Committee. Australian Disability Committe.Google Scholar
Chambers, J. and Hastie, T. (1992) Statistical Models in S. Wadsworth & Brooks, New York.Google Scholar
C.M.I.B. (1984) CMI Report No. 7. The Faculty of Actuaries and the Institute of Actuaries, United Kingdom.Google Scholar
C.M.I.B. (1991) CMI Report No. 12. The Faculty of Actuaries and the Institute of Actuaries, United Kingdom.Google Scholar
C.M.I.B. (1996) CMI Report No. 15. The Faculty of Actuaries and the Institute of Actuaries, United Kingdom.Google Scholar
Dobson, A. (1990) An Introduction to Generalized Linear Models. Chapman and Hall, New York.CrossRefGoogle Scholar
Gutiérrez-Delgado, C. (1999) Initial selection for Permanent Health Insurance. In Insurance: Mathematics and Economics, 25 (5).Google Scholar
Kluwer, (1998) Permanent Health Insurance 1997/98. The Unique Annual Review. Croner Publications and Kluwer Publishing, United Kingdom.Google Scholar
Korabinski, A.A. and Waters, H.R. (1998) PHI claim inception rates: An analysis of individual company experience in the United Kingdom. In Transactions of the 26th International Congress of Actuaries, 6, 188–216.Google Scholar
Lundberg, O. (1969) Methods of studying the risk process in disability insurance. ASTIN Bulletin, 5, 267–273.CrossRefGoogle Scholar
McCullagh, P. and Nelder, J. (1983) Generalized Linear Models. Chapman and Hall, New York.CrossRefGoogle Scholar
McDonald, C. (1995) Epidemiology of Work Related Diseases. BMI Publishing Group, United Kingdom.Google Scholar
Miller, J. and Courant, S. (1974) A mathematical model of the incidence of disability. In Transactions of the Society of Actuaries, XXVI: 1–41.Google Scholar
Renshaw, D. and Haberman, S. (1999) Recent time trends in UK Permanent Health Insurance recovery, mortality and claim inception transition intensifies. In Transactions of the Third International Congress Insurance: Mathematics and Economics, 7.Google Scholar
Soule, C. (1994) Disability Income Insurance. The Unique Risk. Business One Irwin, New York.Google Scholar
Venables, W. and Ripley, B. (1994) Modern Applied Statistics with S-plus. Springer, New York.CrossRefGoogle Scholar