Embed Size (px)
Citation preview
JOURNAL OF THE ACADEMY OF LIFE UNDERWRITING
December 2017Volume 33 Number 4www.ontherisk.com
OTRIN THIS ISSUE
Professional Soccer Players | 42 H. Henly
Is Physical Activity the Strongest Predictor of All-Cause Mortality and Morbidity? | 62 R. Roy-Brunelle, M. Padilla Pharmacogenetics: The Basic Building Blocks | 36 G. Markarian A Book Review: Zapp! The Lightning of Empowerment | 72 M. Reber And More ...
ISSN 0885-4416Copyright 2017Printed in U.S.A.
www.alu-web.com
www.ciu.ca
www.ahou.org
OTR is a benefit of membership in
and
ON THE RISK vol.33 n.4 (2017) 3
Goodbye Yesterday.
Hello Tomorrow!
Contact Stuart [email protected]
718-575-2000 x2769
ME
D
I C A L B AN
K
WO R L D
MEDICAL RECORDS AT THE SPEED OF NOW!
ON THE RISK vol.33 n.4 (2017)4
JOURNAL OF THE ACADEMY OF LIFE UNDERWRITING
ON THE RISK is the Journal of the Academy of Life Underwriting. It is published under the direction of the Board of Directors of the Academy of Life Underwriting (ALU) comprising representatives of the Association of Home Office Underwriters (AHOU), the Canadian Institute of Underwriters (CIU), the ALU and OTR. It is published quarterly and printed by The Marek Group, Inc., Milwaukee, WI. Permission to reproduce articles must be obtained from the Editor-in-Chief unless copy-right is clearly indicated to be held by an author and/or a third party.
EDITOR-IN-CHIEFNancy AtkinsMassMutual1295 State StreetSpringfield, MA 01111Phone (413) [email protected]
EXECUTIVE EDITORBrendan Paradis, FALUBrighthouse Financial11215 North Community House RoadCharlotte, NC 28277Phone (980) [email protected]
ADMINISTRATIVE EDITORCatie Muccigrosso, FALURGA Reinsurance 16600 Swingley Ridge RoadChesterfield, MO 63017Phone (636) [email protected]
ADVERTISING MANAGERDeb Wesenberg, FALUPhone (309) [email protected]
EXECUTIVE AND BUSINESS OPERATIONS ASSOCIATE EDITORS INTERNATIONAL EDITORS
ACTUARIAL CONSULTANT Richard L. Bergstrom, FSAConsulting [email protected]
MEDICAL CONSULTANTNico van Zyl, MDHannover Life Re [email protected]
DisclaimerON THE RISK is a professional journal devoted to the continuing education of its readers and to the exchange of infor-mation and ideas that serve those professionals. Opinions expressed within the correspondence and articles published in ON THE RISK do not represent official opinions of ON THE RISK. Such expressions only represent the views of authors or persons quoted. Publication of articles discussing products, services or methods offered by vendors does not represent endorsement by OTR. Such information is published only for its value as business knowledge.
Vera F. Dolan, FALUVFD Consulting, [email protected]
Jodi Przybyl McDonald, FALUHannover Life Re [email protected]
Tanya Trachenko, MD, FALUWawanesa [email protected]
LEADERSHIPMarv Reber, [email protected]
CONTRIBUTING EDITORS
Rochelle Fernandes, FALUThe Canada Life Assurance [email protected]
Jeanne Hollinger, [email protected]
Jennifer Johnson, FALURGA [email protected]
Jena L. Kennedy, FLMILexisNexis Risk [email protected]
Michelle Privett, FALUHannover Life Re [email protected]
Carmela TedescoLOGiQ3 [email protected]
Michael Wetzel, [email protected]
Asia EditorDr. Himanshu BhatiaGenRe AsiaMumbai, [email protected]
Canada EditorLaura Brandson, AALUWestern Life Assurance CompanyWinnipeg, [email protected]
Caribbean EditorRafael R. ShabetaiPan-American Life Insurance Grp.New Orleans, [email protected]
Latin America EditorFreddy Velasco-A., AALUL&H Underwriting ConsultantMiami, [email protected]
United Kingdom EditorYunus (Pip) PiperdyRGA UK Services LtdLondon, United [email protected]
ON THE RISK vol.33 n.4 (2017) 5
Subscription Information: Members of the Association of Home Office Underwriters (AHOU) and the Canadian Institute of Underwriters (CIU) receive OTR as a benefit of membership. Direct subscriptions are also available. One-year subscription rate: Electronic only version (global rate) - $35.00; Print version - North America only (USA, Canada and Mexico): $40.00; Outside North America: only electronic version available. Back issues - North America: $15.00 if stock available; Outside North America: use OTR Online archives. Subscribe by credit card at the website - www.ontherisk.com. Otherwise, please make all checks payable to ON THE RISK. Please send change of address forms and all subscription correspondence to: OTR Publishing Services, 218 Harmony Drive, Delaware, OH 43015; E-mail address: [email protected]; Website: www.ontherisk.com.
IMPORTANT: Under current copyright laws protecting OTR’s digital rights, a subscription is a personal subscription for one person only and cannot be shared with others at your company. It is illegal to share the username and password or to post the downloaded e-version PDF on a company’s intranet or to e-mail a copy to others as a means of avoiding the purchase of additional subscriptions.
Follow OTR on Facebook Twitter and
TABLE OF CONTENTS
The Underwriting Quiz .............................................................FALU Club of RGA 8
OTR News - Introducing the 2018 Executive Team; Departing Editor-in-Chief
Is Thanked for Her Service; OTR Welcomes New Associate Living Benefits
Editor; Thanks Associate Editor for Her Service ............................................. 10Calendar of Coming Events .................................................................................... 14From the President: Academy of Life Underwriting ...........................J. Johnson 16From the President: Association of Home Office Underwriters AHOU 2017-2018 Key Initiatives ..................................................T. Ranfranz 24Local, Regional and International Associations News: The 45th Annual SEHOUA Meeting in Florida .............................................................................28 Why the Industry’s Path to Success Is Underwriting a Primer on Where We’ve Been and Where We Are Today .........................................................P. Rivard 30Pharmacogenetics: The Basic Building Blocks ............................... G. Markarian 36Professional Soccer Players .................................................................... H. Henly 42The Unique Challenges of Underwriting Children for Life Insurance ...............................................................................P. Aussel 48Investigating Life Insurance Fraud and Abuse: Uncovering the Challenges Facing Insurers ............................. J. Callaway, M. Dion, L. Allen, N. Kocisak 54Is Physical Activity the Strongest Predictor of All-Cause Mortality and Morbidity? .................................... R. Roy-Brunelle, M. Padilla 62
Foreign Travel: The Hidden Risks ........................................................ G. Fulton 68
LEADERSHIP
A Book Review: Zapp! The Lightning of Empowerment ................. M. Reber 72
Interview with a Leader ......................................................................R. Boggs 74
Index to Advertisers ...............................................................................................78
ON THE RISK vol.33 n.4 (2017)6
www.alu-web.com
THE ACADEMY OF LIFE UNDERWRITING
EXAMINATION 101COORDINATORLori Boucher, FALUJohn Hancock Life
Lynn Dreist, FALULincoln Financial Group
Natalie Esterline, FALUSwiss Re
Pam Lewis, FALUNorthwestern Mutual Life
Russell Scott, FALUMunich American Re
Lisa Gutierrez, FALUSymetra
Kim Allen, FALULion Street
EXAMINATION 201COORDINATORMichael Hill, FALURGA Reinsurance
Rick Dawson, FALUFBL Financial
Gay Kemmis, FALUSecurian Financial Group
Kim Leonard, FALUAmerican General Insurance
Libby Limoni, FALUSammons Financial Group
Debbie Dias, FALUCanada Life Reinsurance
Andrea Lovelady, FALUGlobal Atlantic Financial Group
EXAMINATION 202COORDINATORJoanne Kay, FALUSun Life Financial
Christine Klein, FALUUnited Life Insurance
Marcel Padilla, FALUIndustrial Alliance Insurance
Aubree Pham, FALUPrincipal Financial Group
Laura Wheeler, FALUGen Re-A Berkshire Hathaway Co.
Cynthia Landry, FALUSwiss Re
Carol Steckel, FALUAmerican Family Life Ins. Co.
EXAMINATION GROUPS
PRESIDENTJennifer Johnson, FALURGA Reinsurance
PAST PRESIDENTFrank Goetz, FALUPacific Life Insurance Company
SECRETARYTanya Trachenko, MD, FALUWawanesa Life
TREASURERJean Everhart, FALUWoodmen Life
DIRECTOR OF MEETINGS Jodie Hofmaier, FALUUnited of Omaha
DIRECTOR OF CONTINUING EDUCATIONSharon Garner, FALUAmerican National Insurance
DIRECTOR OF CURRICULUMJodi McDonald, FALUHannover Life Re
DIRECTOR OF EXAMSAnn Day, FALUWestern Fraternal Life Assoc.
DIRECTOR OF MARKETINGJennifer Dahl, FALURBC Insurance
MEDICAL CONSULTANTSCathy Percival, RN, BSN, FALUSelf-Employed
Dave Rengachary, MD, FALURGA Reinsurance
WEBSITE GROUPMichael Waterhouse, FALUJohn Hancock Life
Ben Otten, FALUSwiss Re
Andrew Langemeier, FALUAssurity
EXECUTIVE GROUP EXAMINATION GROUPS
EXAMINATION 301COORDINATORDoreen Brynga, FALUVOYA
Heidi Bartels, FALUPrudential Financial
Stephanie Helle, FALUTransamerica Life Ins. Co.
Sandy Jenum, FALURiversource Life Insurance
Melinda Shaw, FALUPenn Mutual Life
Richard Camire, FALUOptimum Re
Vickie Rath, FALUAllianz Life
EXAMINATION MRAP 1COORDINATORLee Janecek, FALUWoodmen Life
EXAMINATION MRAP 2COORDINATORJoe Keown, FALULincoln Financial Group
Lori Ammons, FALUSelf-Employed UW Consultant
Jeanne Hollinger, FALUMass Mutual
Joanne Lackenbauer, FALUSun Life Financial
Vicky Sheehan, FALULincoln Financial Group
Peter Trivella, FALUJohn Hancock Life
Margaret Taff, FALUVantis Life Insurance
CURRICULUM GROUP
Ryan Hedges, FALU American National Life
Julia Wysong, FALUNew York Life
Bill Swarmer, FALULicoln Financial Group
Mark McPheron, FALUAmeritas
COORDINATORDonna Daniells, FALUAXA
Amy Rider, FALUSammons Financial Group
Cheryl Johns, FALUAAA Life Insurance Company
Sherri Boyda, FALURGA Reinsurance
Carla Martin, FALUExamOne
Angela A. Read, FALUMass Mutual
COORDINATORKristin Ringland, FALUSCOR
Carol Flanagan, FALUJohn Hancock Life
Roberta Scott, FALUWoodmen Life
Donna Melfi, FALUSecurity Mutual Life of NY
FORUM GROUP
MARKETING GROUP
SURVEY GROUP
UNDERWRITING CONTINUING EDUCATION GROUP
ON THE RISK vol.33 n.4 (2017) 7
Control Costs• Reduce administration and underwriting
expenses
Manage Risks• Application design/product development • Skilled, protective underwriting services
and consulting • Mortality management • Medical Director consulting• Customized tele-underwriting programs• Customized inspections • Express Doctor’s Reports• Case management• Underwriting administration• Contestable death claim review
Grow Sales• Faster development of new products • Enhance agent marketing and training• Point-of-sale rules-based programs
Support Marketing• Enter new markets quickly • Achieve product recognition and placement • Conduct custom-designed telephone interviews
ESP offers a full spectrum of tailored underwriting solutions and services to support your operations, maximize efficiency and increase sales.
From simplified underwriting to fully underwritten business, our experienced underwriters can handle any client requirement and will adapt to your guidelines and mortality considerations on any fully underwritten product. We also design simplified underwriting programs for implementing and processing business to meet specified actuarial mortality objectives and assumptions – all while efficiently meeting your agent’s needs.
We also engage in extensive training with your company to ensure we understand your needs, goals, service expectations, products, clients, field force and home office personnel so that we can build a successful partnership.
A partner you can trust We work to earn the trust and respect of our clients by building strong relationships, being dedicated to meeting each client’s expectations, and creating profitable solutions for our customers.
RGA acquired ESP in August 2015. Together, RGA and ESP are partners that you can depend on to protect your interests, provide support, and serve you with an unparalleled client focus.
A Leader in Providing Complete, End-to-End Underwriting Processes
Call 402-933-1758 to learn how ESP can boost growth for your company.
Control Costs
Grow Sales
Manage Risks
Support
Marketing
SUCCESS
Protecting Your Interests Yesterday, Today & Tomorrow
Respect
Ethics
Honesty
Integrity
The Power of ESP
ON THE RISK vol.33 n.4 (2017)8
FALU Club of RGA
THE UNDERWRITING QUIZ
The Academy of Life Underwriting will offer four ALU examinations on April 17, 2018. ALU 101 ALU 201ALU 202 ALU 301
The registration period for all ALU examinations opened September 1, 2017. Exam registrations are accepted through March 1, 2018; registration forms received February 1 – March 1, 2018, require payment of a late registration fee in addition to the regular exam fee.
Answers on page 77
Executive Summary ON THE RISK is known for its scholarly articles on insurance topics. In keeping with this, the FALU Club of RGA offers a fun and challenging addition to OTR in the form of the underwriting quiz. This regular feature is meant to challenge the underwriting knowledge of you, the reader, encourage ALU class enrollment and promote ongoing professional education in general. If you would like to submit quiz ques-tions of your own, or if you have any comments, suggestions or questions, please contact the FALU Club of RGA at [email protected]. We look forward to hearing from you.
So now we invite you to test your wits on this quiz. Are you smarter than a FALU?
1. Which eye disorder causes an opacity in the lens, which if left untreated may cause blindness?a) Glaucomab) Exotropiac) Color blindnessd) Cataracts
2. Which type of white blood cell consists of natural killer cells that destroy foreign cell membranes?a) Lymphocytesb) Monocytesc) Neutrophilsd) Eosinophils
3. Which type of life insurance policy has the ability to take premium dollars and invest in multiple types of investment options?a) Variable b) Limited-payc) Adjustable d) Whole
4. Which cognitive test has the most variability in scoring?a) Clock drawing testb) Mini-mental state examc) Delayed word recalld) Timed get up and go
5. Benign thyroid nodules are more likely to appear hot rather than cold on radioiodine uptake scans.a) Trueb) False
ON THE RISK vol.33 n.4 (2017) 9
At LexisNexis® Risk Solutions, we understand that more consumers today want the peace of mind that comes with knowing they have the right amount of life insurance in place — and that insurers want to help them obtain that essential coverage. But consumer expectations have changed, and insurers must find viable ways to meet individuals’ concerns quickly, while still gathering the data needed to properly assess risk.
That is where LexisNexis comes in. With more than 25 years of experience serving the insurance industry, we are a trusted steward and provider of essential information. We can supply insurers with tools that give greater insight about a proposed insured in a more immediate way, which can help them meet the increased demand for faster policy issue.
We are in this journey together. Our goal is to enable the life insurance industry to revolutionize the consumer’s experience in securing life insurance. LexisNexis is staffed with experts from the industry who have built products to help you expedite the policy issue process, from point of application to delivery — and even after issue, so you can know your customers better and deliver an exceptional experience for many years to come.
Let LexisNexis help you go beyond — so you can be at the forefront of the revolution.
Learn more: Call 800.869.0751, email [email protected] or visit risk.lexisnexis.com/insurance
LexisNexis and the KnowledgeBurst logo are registered trademarks of RELX Inc. Copyright © 2017.
Go beyond. With LexisNexis®.
ON THE RISK vol.33 n.4 (2017)10
OTR NEWS - INTRODUCING THE 2018 EXECUTIVE TEAM;DEPARTING EDITOR-IN-CHIEF IS THANKED FOR HER SERVICE
Paradis Muccigrosso Miller
OTR is proud to announce the succession of Brendan Paradis to Editor-in-Chief effective January 1, 2018. Brendan will take over responsibility for the overall management of the quarterly editorial content of OTR. He will work closely with the Executive Edi-tor and Administrative Editor in obtaining editorial content from the Associate, Contributing and Interna-tional Editors and reaching out to individual authors. As Editor-in-Chief, he will work closely with the OTR Advertising Manager to provide excellent service to our advertisers in every issue.
Congratulations, Brendan!
OTR is proud to announce the succession of Catie Muccigrosso to Executive Editor effective January 1, 2018. Catie will have the responsibility of manage-ment of the Associate and Contributing Editor teams and assist in the preparation of financial and manage-ment reports. She will assist the Editor-in-Chief and Publisher with management of the quarterly publi-cation, review of editorial content, article inventory and online content.
Congratulations, Catie!
OTR is proud to announce the appointment of Jenni-fer Miller as Administrative Editor effective January 1, 2018. Jennifer will be responsible for manage-ment of the International Editors. She will assist the Executive Editor in review of the OTR Policies and Procedures manual, review of editorial content, article inventory and online content.
Jennifer is currently a Director of Underwriting for SCOR Canada. She began her underwriting career over 20 years ago at London Life and joined SCOR in 2015. A graduate of the University of Western Ontario with a BScN, she began her career as an
NAIC (neonatal intensive care) nurse. Since becoming an underwriter, Jennifer has developed and imple-mented several underwriting audit programs for both internal and external use, as well as several under-writing training programs for both life and critical illness. She has extensive experience in international markets, structured settlements, and underwriting manual development and implementation. Congratulations, Jennifer!
Nancy Atkins has completed her 3-year term as an Executive Team member – serving as a 2015 Ad-ministrative Editor, 2016 Executive Editor and 2017 Editor-in-Chief.
During Nancy’s term, OTR worked to increase liv-ing benefits content, including calendar events and articles covering the risk assessment for morbidity in each issue. Additionally, OTR has added a Living Benefits Editor, Rick Dixon from Munich Re. Nancy has agreed to continue with ON THE RISK as a Contributing Editor.
Congratulations and thank you, Nancy!
Atkins
ON THE RISK vol.33 n.4 (2017) 11
Today you need powerful underwriting more than ever.You need AURA.
E-mail [email protected] for a demonstration.
We know your company faces new risks, new sources of data, more sales channels and new demands for faster turnaround. So we amped up the power of AURA with new capabilities. AURA is the proven automated underwriting system and rules engine you need to succeed in today’s insurance market and be prepared for tomorrow’s.
Because AURA not only adapts to the future, it is your bridge to it.
ON THE RISK vol.33 n.4 (2017)12
OTR NEWS - OTR WELCOMES NEW ASSOCIATE LIVING BENEFITS EDITOR AND THANKS ASSOCIATE EDITOR FOR HER SERVICE
OTR incorrectly identified the photographers for the CIU in September’s issue. The following should be thanked: Rhiannon White and Ashley Goulding.
Dixon
ON THE RISK is pleased to welcome Rick Dixon to the role of Associate Editor, Living Benefits, with ON THE RISK. In his current role as Assistant Vice President for Munich Re, Rick leads a dynamic team of underwriters and consultants responsible for providing expertise of morbidity trends to help living benefits carriers throughout the US make sound risk management decisions. Rick’s contributions during his 30+ years in underwriting include developing of the first paperless underwriting system and serving on the system’s pilot team, creating the rules for the first automated underwriting system in the US, and currently working with the Munich Re integrated
analytics team on a project to review the protective value of fluids.
When he’s not consulting with clients and contacts throughout the industry on topics and trends im-pacting their business, Rick serves on the planning committee for the annual Supplemental Health & Protection Conference and enjoys training and men-toring new underwriters.
OTR looks forward to Rick’s continued contributions. Welcome aboard, Rick!
Jodi McDonald, FALU, has completed her term of service as Associate Editor after almost 20 years of service to ON THE RISK. Jodi has authored, co-authored and recruited many articles over the years and provided coverage of the annual meetings of the AHOU and CIU.
Jodi joined ON THE RISK in 1998 and, in addition to serving as an Associate Editor, completed her term
as a member of the Executive team – Administrative Editor 2004, Executive Editor 2005 and Editor-in-Chief in 2006. When not writing for ON THE RISK, she is active in the Academy of Life Underwriting, currently the Director of Curriculum.
Congratulations and thank you, Jodi, for your dedica-tion to the industry.
McDonald
ON THE RISK vol.33 n.4 (2017)14
Regional, national and international underwriting association meetings and non-profit educational events of direct interest to underwriters can be promoted in OTR’s Calendar of Coming Events and at the ALU website - www.alu-web.com. Notify OTR of your meeting details by e-mail to [email protected].
OTR CALENDAR OF COMING EVENTS
2018
January 22-23 CIU Winter Education Seminar at Vantage Venues Toronto, Toronto, ON. For more information and to register visit www.ciu.ca.
January 28-30 MUD (Metropolitan Underwriting Discussion Group) Annual Conference at the InterContinental Hotel, New York, NY. For more information visit www.mudgroup.com.
February 17-20 ACLI Medical Section Annual Meeting at the Vinoy Renaissance, St. Peters-burg, FL. For more information visit www.acli.com.
April 9-11 SOA (Society of Actuaries) Life Insur-ance Conference at the Marriott Downtown Magnificent Mile, Chicago, IL. For more in-formation visit www.soa.org.
April 17 ALU Annual Examination. For more information visit www.alu-web.com.
April 29 XVth IUSG (International Study Group) at the Sheraton Chicago, Chicago, IL. For more information contact Rafael Shabetai at [email protected] or Jane McWatters, 2018 Chair, at [email protected].
April 29-May 2 AHOU Annual Conference at the Sheraton Chicago, Chicago, IL. For more information visit www.ahou.org.
May 6-9 CLIMOA (Canadian Life Insurance Medi-cal Officers Association) 73rd Annual Scien-tific Meeting at the Hyatt Regency, Montreal. For more information visit www.climoa.com.
May 10-11 MMDA (Midwestern Medical Directors Association) Annual Meeting at RGA Global Headquarters, Chesterfield, MO. For more information visit www.mmda1.com.
June 3-5 CIU Annual General Meeting at the Mar-riott Bloor-Yorkville Hotel, Toronto, ON. For more information visit www.ciu.ca.
June 3-6 ELHUA (European Life and Health Underwriters Association) 5th Conference in Warsaw. For more information visit www.elhua.eu.
June 20-23 SEHOUA (Southeastern Home Of-fice Underwriters Association) 46th Annual Conference at the Boca Raton Resort & Club, Boca Raton, FL. For more information contact Gina Klucas at [email protected].
September 12-14 MUC (Midwestern Underwrit-ing Conference) at the Omni Hotel, Denver, CO. For more information visit www.midwe-sternunderwritingconference.com.
October 3-5 TWUC (Texas Wide Underwriting Conference) at the Magnolia Hotel Dallas Park Cities, Dallas, TX. For more information visit www.twuc.org.
October 7-9 ACLI Annual Conference at the Re-naissance Washington DC, Downtown Hotel, Washington DC. For more information visit www.acli.com.
October 11-13 ALUCA (Australasian Life Un-derwriting and Claims Association) 2018 Biennial Conference at the Hotel Chancellor, Hobart, Tasmania. For more information visit www.aluca.com.
October 12 NEHOUA (Northeast Home Office Underwriters Association) Annual Confer-ence at the Harborside Sheraton Hotel, Portsmouth, NH. For more information visit www.nehoua.org.
ON THE RISK vol.33 n.4 (2017) 15
MIB, Inc., Braintree, MA, provides MIB’s Underwriting Services exclusively to members of the MIB Group, Inc.
TOGETHER, WE’RE CROSSING INTO NEW TERRITORY. New data sources and workflows are turning life underwriting on its head. For more than a century, MIB has provided our industry with valuable risk assessment insights. Today, this same trusted resource continues to meet the industry’s evolving needs through innovation, ensuring our members have access to the data they need to reduce risk and speed time to issue.
Here today. With you tomorrow. That’s MIB.
781.751.6000 mibgroup.com
MGI_0187_Together_Bridge_091517.indd 1 9/15/17 2:46 PM
ON THE RISK vol.33 n.4 (2017)16
FROM THE PRESIDENT: ACADEMY OF LIFE UNDERWRITING
Executive Summary This report updates and summarizes the 2017 activities and accomplish-ments of the Academy of Life Underwriting.
Jennifer Johnson, FALUPresident, ALU
The Academy of Life Underwriting would like to share some of the events and accomplishments we have had during a busy 2016-2017 year.
The current members of the ALU Board of Directors are:
• Frank Goetz and Jennifer Johnson from ALU• Donna Daniells from OTR• Selena Puttick from CIU• Norm Leblond from AHOU
Selena Puttick is the chairperson, Donna Daniells is the secretary, and Frank Goetz is the treasurer of this board.
OTRAs of January 1, 2018, Brendan Paradis will be the Editor-in-Chief of OTR, Catie Muccigrosso will be the Executive Editor, Jennifer Miller the Administrative Editor, Deb Wesenberg the Advertising Manager, and Kevin Cunningham, Publishing Manager.
We want to thank all of the editors, managers and consultants for ON THE RISK for the many hours of work they put into producing a consistently high- quality underwriting journal.
2017 Accomplishments The ALU groups have been busy with creating new exams, updating textbooks, hosting webinars, col-lecting survey data, hosting an underwriting forum for chief underwriters, designing a new website, and finding ways to communicate and advertise to the underwriting and insurance communities.
2017 Exams and FALUsThe enrollment for the four examinations this year was 1,244 students. This is a 4.7% drop from total registrations in 2016. The 2016-2017 academic year produced the following numbers:
There were 769 students from the United States, 156 students from Canada, and 339 students from other countries, including 80 from the Philippines, 72 from the Republic of Korea, 29 from India, and 29 from the People’s Republic of China. Twenty-seven percent of our enrollment this year was from outside North America.
The top 10 companies (worldwide and aggregated) in numbers of students for 2017 are:Prudential - 57, Sun Life - 48, Manulife - 47, North-western Mutual - 45, New York Life - 44, Transam-erica - 39, AXA - 36, Mass Mutual - 35, RGA - 31 and Western Southern - 29.
There are 81 new Fellows so far in the Class of 2017: 53 from the United States, 10 from Canada, 5 from the People’s Republic of China, 3 from the Republic of Korea, 3 from the United Arab Emirates, 2 from Malaysia and the Philippines, and 1 each from Hong Kong, India and Japan. Congratulations to all of the new FALUs! This is a great accomplishment!
The Charles A. Will Award recipient for 2017 has not been determined at this time. This award is presented
Exam Number registered Number passing
ALU 101 434 292
ALU 201 301 206
ALU 202 243 163
ALU 301 209 143
MRAP1 57 36
ON THE RISK vol.33 n.4 (2017) 17
Hannover Life Reassurance Company of America200 South Orange Avenue, Suite 1900Orlando, Florida 32801, USAwww.hannover-re.comMember of the Hannover Re Group
Enhancing the customer experience hr | ReFlex, Hannover Re’s automated / digital underwriting platform, is designed to enhance a company’s ability to make the most accurate and timely risk assessment decisions at the point of sale. Using third-party data such as Rx, MIB, MVR and pre-dictive models, it supports accelerated underwriting, simplified issue and fully underwritten products. Underwriting question sets and rules are trans parent and customizable for easy integra-tion with clients’ current processes. With an open and modern
architecture, hr | ReFlex remains flexible to evolve with new under-writing paradigms.
hr | ReFlex is at the forefront of supporting new underwriting pro-grams for life insurance and enabling carriers’ web, mobile and digital strategies to meet the demands of today’s consumers. Con-tact us to learn more about Hannover Re’s automated underwrit-ing solutions.
Reduce policy issue time & costs, achieve consistent decisions and meet consumer expectations with hr | ReFlex
ON THE RISK vol.33 n.4 (2017)18
annually to the new FALU having the highest aver-age score on all four exams. The 2017 Charles A. Will Award recipient will have an opportunity to travel to the 2018 AHOU meeting in Chicago for the FALU awards presentation.
The 2017 exams also included the first group of stu-dents to take the MRAP1 exam. The MRAP program is designed for international students; underwriters working in a field office; pricing actuaries; medical directors; claims examiners; disability, long term care and critical illness underwriters; and non-underwriting managers of underwriters.
For more information about our exams, please visit www.alu-web.com and check out the 2017-2018 ex-amination program. We are currently accepting registrations for the April 17, 2018, examinations.
Working Groups The Academy of Life Underwriting, the ALU Board and the editorial team of ON THE RISK recently held our annual planning meeting in Seattle, WA. This 3-day meeting involves intense work and preparation for the upcoming year.
The Question Writers Group met to review the exami-nation questions created for each ALU text. During this time, the groups edit the questions they’ve cre-ated during the summer prior to the meeting. One of the objectives of this review process is to ensure the questions are clear in meaning.
The Curriculum Group is responsible for reviewing the textbooks and having authors update or write new chapters. This year the primary focus was providing updates to the ALU 201 and 301 textbooks.
All four of the ALU textbooks and the two MRAP textbooks are available online at no cost to registered students. They are also free to FALU’s accessing the alu-web.com website. Though the textbooks are avail-able online, hardcopy textbooks are also available.
The Underwriting Development and Continuing Edu-cation Group presented a series of four medical webi-nars and a four-part management series in 2017. The webinars continue to be a popular and cost-effective means of providing continuing education, where one annual payment covers all of the regular webinars for a company’s underwriters, whether working in the home office or remotely. Individual subscriptions are also available. Seventy-six companies have subscribed to the webinar program this year. The ALU website (alu-web.com) and future editions of ON THE RISK
will provide further details of the 2018 webinars as they become available.
The Underwriting Forum was held April 30-May 1, 2017, at the Hyatt Regency O’Hare in Chicago and continues to be well-attended. The goal of the Forum Group is to provide a venue for underwriting leaders of direct, reinsurance and retrocession companies to discuss risk selection and management issues in a round-table format. The ALU website will provide the dates and location of the 2018 Forum as the time gets closer.
The Marketing team continued their work of provid-ing information about ALU and its programs to the underwriting and insurance communities. Among other tasks, they created quarterly ads in OTR, cre-ated advertisements for the new MRAP designation and maintained the ALU social media accounts.
The Survey Group completed three surveys this year including a 2017 Underwriter census, a survey of the Chief Underwriters for OTR, and a survey regarding Accelerated Underwriting monitoring practices for the Forum Group.
The new ALU website was completed this year. This new website enables students to access their contact information and ALU academic records, and order textbooks, all online.
Retiring Members of the Academy of Life Under-writingI want to acknowledge all of the contributions made by the members of the ALU who will complete their terms at the end of the 2017-2018 academic year.
• Norm LeBlond – Swiss Re – Board of Directors• Lynn Dreist – Lincoln Financial Group – Exam
101• Pamela Lewis – Northwestern Mutual Life –
Exam 101• Gay Kemmis – Securian Financial Group/Min-
nesota – Exam 201 • Libby Limoni – Sammons Financial Group –
Exam 201• Christine Klein – United Life Insurance – Exam
202• Marcel Padilla – Industrial Alliance Insurance
– Exam 202• Stephanie Helle – Transamerica Life Insurance
Company – Exam 301• Joanne Lackenbauer – Sunlife Financial – Cur-
riculum• Vicky Sheehan – Lincoln Financial Group – Cur-
riculum
“Consulting Leaders in Latin America for Insurance Companies”
::: Inspections ReportsTelephone Inspections in Spanish, Portuguese,
English and French
::: Simpli�ied Inspection ReportsLow cost alternative for lower face amounts
::: Audit SurveysMeasures client experience , payment methods,
consent to the product o�ered, medical requirements
and more
::: Due diligence for Prospective AgentsIncludes a complete pro�le of the individual that
your company plans to hire
:::
Visit www.iusolutions.com/movil24/7 online follow-up of each casefrom your smartphone and/or tablet
Misiones 1371 4th �oor Montevideo I Uruguay I Tel. (+54-11) 6385.5463 I 6385.5487 [email protected] I www.iusolutions.com
We are leaders in Latin American market: 90 per cent of the life insurance companies request our service
IUSolutions powered by ibu for Tele-Underwriting in spanish communities Helps you improve time service and minimize costs. Powered by the latest secure web-based technologies
New!
ON THE RISK vol.33 n.4 (2017) 19
“Consulting Leaders in Latin America for Insurance Companies”
::: Inspections ReportsTelephone Inspections in Spanish, Portuguese,
English and French
::: Simpli�ied Inspection ReportsLow cost alternative for lower face amounts
::: Audit SurveysMeasures client experience , payment methods,
consent to the product o�ered, medical requirements
and more
::: Due diligence for Prospective AgentsIncludes a complete pro�le of the individual that
your company plans to hire
:::
Visit www.iusolutions.com/movil24/7 online follow-up of each casefrom your smartphone and/or tablet
Misiones 1371 4th �oor Montevideo I Uruguay I Tel. (+54-11) 6385.5463 I 6385.5487 [email protected] I www.iusolutions.com
We are leaders in Latin American market: 90 per cent of the life insurance companies request our service
IUSolutions powered by ibu for Tele-Underwriting in spanish communities Helps you improve time service and minimize costs. Powered by the latest secure web-based technologies
New!
ON THE RISK vol.33 n.4 (2017)20
• Peter Trivella – John Hancock Life Insurance Company – Curriculum
• Jennifer Dahl – RBC Insurance – Director, Marketing
• Kristin Ringland – SCOR – Director, Survey Group
• Carol Flanagan – John Hancock Life Insurance – Survey Group
• Roberta Scott – Woodmen Life – Survey Group• Joe Keown – Lincoln Financial Group – Coordi-
nator, Medical Risk Assessment Principles• Cathy Percival – Self-Employed – Medical Con-
sultant • Nancy Atkins – Mass Mutual – OTR Editor-in-
Chief
These individuals have served at least 3 years and in some instances longer, working many hours each year to ensure the success of the ALU program.
In addition, the ALU would like to extend a special thank you to Richard Schmidt for his 16 years of dedicated service as the ALU Managing Director. His administration of our exams and related back-office support for textbooks, webinars and day-to-day ac-tivities of the ALU have provided a quality experience to our students worldwide and the FALU program. Richard will be retiring in 2018.
Current Members of the Academy of Life Under-writingI also want to recognize the current members of the Academy of Life Underwriting and thank them for their hard work and continued commitment to the education of their fellow underwriters.
Executive • Jennifer Johnson, FALU – President – RGA • Frank Goetz, FALU – Past President – Pacific Life• Tanya Trachenko, FALU – Secretary – Wawa-
nesa Life Insurance Company • Jean Everhart, FALU – Treasurer – Woodmen
Life Insurance• Jodie Hofmaier, FALU – Director of Meeting
and Event Planning – United of Omaha Life Insurance
• Ann Day, FALU – Director of Exams – Western Fraternal
• Sharon Garner, FALU – Director of Underwrit-ing Development and Continuing Education – American National Insurance Company
• Jodi McDonald, FALU – Director of Curricu-lum – Hannover Life Reinsurance Company of America
• Jennifer Dahl, FALU – Director of Marketing – RBC Insurance
• Michael Waterhouse, FALU – Website Manager – John Hancock Life Insurance Company
Coordinators
• Lori Boucher, FALU – Exam 101 Coordinator – John Hancock Insurance Company
• Michael Hill, FALU – Exam 201 Coordinator – RGA
• Joanne Kay, FALU – Exam 202 Coordinator – Sunlife Financial
• Doreen Brynga, FALU – Exam 301 Coordinator – VOYA Financial
• Donna Daniells, FALU – Forum Group Coordi-nator – AXA
• Kristin Ringland, FALU – Survey Group Coor-dinator – SCOR
• Lee Janecek – MRAP1 Coordinator – Woodmen Life Insurance
• Joe Keown – MRAP2 Coordinator – Lincoln Financial Group
Exam 101 Group• Kim Allen, FALU –Lion Street• Lynn Dreist, FALU – Lincoln Financial Group • Natalie Esterline, FALU – Swiss Re• Lisa Gutierrez, FALU – Symetra Life• Pamela Lewis, FALU – Northwestern Mutual
Life• Russell Scott, FALU – Munich American Reinsur-
ance Company Exam 201 Group
• Rick Dawson, FALU – FBL Financial• Gay Kemmis, FALU – Securian Financial Group/
Minnesota Life • Kim Leonard, FALU – American General Insur-
ance• Libby Limoni, FALU – Sammons Financial
Group• Debbie Diaz, FALU – Canada Life Reinsurance• Andrea Lovelady, FALU – Global Atlantic Fi-
nancial Group
Exam 202 Group• Christine Klein, FALU – United Life Insurance• Marcel Padilla, FALU – Industrial Alliance
Insurance • Aubree Pham, FALU – Principal Financial Group• Laura Wheeler, FALU – Gen Re• Cynthia Landry, FALU – Swiss Re• Carol Steckel, FALU – American Family Life
Insurance Company
Exam 301 Group• Heidi Bartels, FALU – Prudential Financial• Richard Camire, FALU – Optimum Re
ON THE RISK vol.33 n.4 (2017) 21
Accelerate risk assessment with powerful analytics.
Milliman IntelliScript®
Milliman combines industry-leading data and expertise with dedicated customer service to bring our clients innovative market-leading solutions.
IntelliScript delivers instant, accurate, and current prescription history reports.
RxRules interprets medical conditions from Rx, MIB, MVR, and app data, applies your underwriting guidelines, and then generates recommendations or automated decisions—all seamlessly integrated within IntelliScript.
Risk Score is a mortality-based predictive model delivered within RxRules.
ReCheck combines prescription data and analytics to uncover potential fraud.
To learn more, contact: Angela Bolduc [email protected]+1 617 784 8284rxhistories.com
ON THE RISK vol.33 n.4 (2017)22
• Stephanie Hele, FALU – Transamerica Life In-surance Company
• Sandy Jenum, FALU – RiverSource Life Insur-ance Company
• Melinda Shaw, FALU – Penn Mutual Life• Vickie Rath, FALU – Allianz Life
Website Committee• Ben Otten, FALU – Swiss Re• Andrew Langemeier, FALU – Assurity Life
Underwriting Development and Continuing Educa-tion Group
• Ryan Hedges, FALU – American National Life• Mark McPheron, FALU – Ameritas• Bill Swarner, FALU – Lincoln Financial Group• Julia Wysong, FALU – New York Life
Forum Group• Amy Rider, FALU – Sammons Financial Group• Cheryl Johns, FALU – AAA Life Insurance
Company
Survey Group• Carol Flanagan, FALU – John Hancock Life
Insurance• Roberta Scott, FALU – Woodmen Life• Donna Melfi, FALU – Security Mutual Life of NY
Marketing Group• Sheri Boyda, FALU – RGA• Carla Martin, FALU – ExamOne• Angela Read, FALU – Mass Mutual
Curriculum Group• Lori Ammons, FALU – Self-Employed• Jeanne Hollinger, FALU – Mass Mutual• Joanne Lackenbauer, FALU – Sunlife Financial• Vicky Sheehan, FALU – Lincoln Financial Group• Peter Trivella, FALU – John Hancock Life Insur-
ance Company• Margaret Taff, FALU – Vantis Life Insurance
Consultants• David Rengachary, FALU – Medical Consultant
– RGA • Cathy Percival, RN, BSN, MBA – Medical Con-
sultant – Self-Employed• Marti Trevillian, FALU – Bookkeeper – Retired• Marty Meyer, FALU – ALU Editor – Self-
Employed• Stan Meyer – ALU/OTR Photographer – Self-
Employed
Administration• Richard Schmidt – Administrator – Risk Selec-
tion Resources, LLC
How to Become a Member of the Academy of Life UnderwritingIf you have your FALU designation and are interested in working as a member of the ALU, please send me an e-mail at [email protected] and I will be happy to provide more information about what is involved.
Thank YouFirst, I want to thank all the members of the Academy of Life Underwriting. Just about all of our work is accomplished by underwriters who volunteer their time outside of their regular work hours. Thank you to everyone for a great job!
The ALU wants to thank the many companies that provide support to these underwriters in attending the meetings. We appreciate this generous support – it is essential to our organization.
Finally, we want to recognize the valuable support of the Association of Home Office Underwriters and the Canadian Institute of Underwriters provided to both the ALU and the OTR organizations.
OTR thanks Stan Meyer for his photos of the 2017 ALU Annual Meeting which appear in this issue.
ON THE RISK vol.33 n.4 (2017) 23
SAVE THE DATE for Academy of Life Underwriting Forum
Sunday April 8 to Monday April 9, 2018
WHO: One attendee per company – Either the Chief Underwriter or a designate of the Chief Underwriter from direct carrier or reinsurer.
WHERE: Hyatt Regency O’Hare, Chicago
TIME: Meeting starts at 4 pm on Sunday April 8th and ends at 3 pm on Monday April 9th.
REGISTRATION:
• Attendance is limited to approximately 32 attendees, to ensure there is an opporunity for all to be engaged.
• Registration will open on the ALU web site in Feb. 2018. • Those who attended in 2017 will receive an email when registration opens.
If you want to be added to the list – please contact [email protected].
Anti-trust practices are followed.
This discussion group is designed to create stimulating dialogue among colleagues on the
challenges and opportunities facing underwriting risk management.
Topics are driven by those attending.
ON THE RISK vol.33 n.4 (2017)24
FROM THE PRESIDENT: ASSOCIATION OF HOME OFFICEUNDERWRITERS AHOU 2017-2018 KEY INITIATIVES
Tim Ranfranz,FALU, FLMI, ACSPresident, AHOU
Northwestern [email protected]
Executive Summary This article provides an overview of the AHOU’s goals and initiatives, and previews the 2018 AHOU Annual Conference in Chicago, IL.
Hello to all! It is crazy to think it has been over 6 months since we left the conference in San Diego where “Appetite for Disruption” helped highlight and educate all of us on the pace and magnitude of the changes that our underwriting community and pro-fession have been dealing with over the past several years, and that will no doubt continue to reshape our world for the foreseeable future. In the face of this disruption, it is critical that our association continues to evolve to deliver the highest level of value to members and the profession through pertinent and timely educational content, network-ing opportunities and improved connectivity of the underwriting community. As incoming President of AHOU, I outlined our key strategic areas of focus for the coming year and be-yond at the close of the conference earlier this year. I want to provide an overview of the progress made in each, but first, I need to thank and commend the efforts of the Executive Council, Program Commit-tee, Website Committee, Task Forces (Educational, Marketing, Charitable), and our management part-nerships with AMS and LOMA, which have helped us drive our strategies forward to deliver critical educational and networking opportunities to our underwriting profession.
Now, here is an overview of our strategic areas of focus.
EDUCATION: Did you know that AHOU provides educational opportunities outside of our conference!?! AHOU has long had an expansive library of edu-cational content on our website, which includes past conference presentations
available for members to view on-demand, as well as a research library of industry publications. In 2017, we’ve enhanced our membership value and our ability to deliver educational content to the un-derwriting industry with the creation and launch of AHOU Advance 360! Advance 360 is an on-demand program which is aimed at delivering easily acces-sible, dynamic and relevant educational content for individuals at all stages of their careers. In March of this year, we launched a three-part podcast series on Leadership (Successful Leadership in Life Under-writing) and followed up with our first case study webinar, Underwriting Marijuana Use. These were just the beginning - we have had several more pod-casts and case study webinars throughout 2017. The ongoing efforts of our Educational Task Force, which is led by Executive Council champion Bill Moore of Munich Re, have created a sustainable program heading into 2018. More to follow on the direction of Advance 360, but check out our podcast and webinar series (prior releases available on-demand!) and log on to AHOU.org for details – Advance 360 is available to both members and non-members.
VISIBILITY & ADVOCACY: AHOU has also been evaluating how to help sup-port the underwriting profession. In the past year-plus, led by Executive Council champion Bill Tilford of Tilford Consult-ing, we have worked to provide greater
awareness and communication of local and regional underwriting associations’ activities. Additionally,
ON THE RISK vol.33 n.4 (2017) 25
Visit www.innovativeus.net to learn more. Or call us at 866-223-6048.
Bob Pedigo, FALU, CLU, FLMI | Danni Pedigo, FALU | Jon F. Davis, FSA
Let Innovative Underwriting Solutions
handle one of the toughest obstacles
to keeping your business running
smoothly, with straightforward
solutions for your short- and/or
long-term underwriting needs.
Customizable, cost-effective staffing solutions that save you energy, time, and money
Seamless integration into your company’s existing structure
Highly experienced professionals with more than 10 years of experience
Think of us as your loyal underwriting provider …
WE HAVE SOMETHING FOR YOUR EVERY NEED – BIG OR SMALL.
ON THE RISK vol.33 n.4 (2017)26
AHOU is working to develop opportunities to increase the communication and connectivity amongst these groups to encourage collaboration and shared knowl-edge, as we are all dedicated to the common goal of supporting knowledge and networking within the underwriting profession.
INFRASTRUCTURE: To execute our strategies and drive the changes that we have led in the past couple of years, we conducted an evaluation of our website/database capabilities. This evaluation of AHOU.org - led by our VP of Technol-
ogy, Dawn Boitnott of SCOR, and AVP of Technology, Richard Odom of National Life Group - included a detailed SWOT analysis, project scope and request for proposals. Ultimately, the goal will be to improve our user experience (whether educational or conference- related in nature), improve our record management capabilities, and ensure that AHOU.org is able to meet all of our operational needs.
MARKETING & BRANDING: Often when people think of AHOU, they think of our conference, which provides an unbeliev-able networking opportunity, tons of relevant educational content, and a mar-ketplace that can’t be beat! We realized
that as we have evolved as an association - with our new educational brand, Advance 360; livestreaming of conference activities; and more - that we not only have an opportunity to focus on the AHOU brand and marketing of these new opportunities, but that we also have an opportunity to promote existing membership value and the benefits that we offer - free subscrip-tion to OTR, our premier industry publication; ac-cess to AHOU.org’s underwriting resource library; and access to past conference materials - to name a few. To maximize our impact on members and the underwriting community, we need to help educate, promote and define the AHOU brand and effectively market this to members and non-members alike. In 2017, we launched a Marketing and Branding Task Force to evaluate our branding and marketing efforts. Much more to follow as we evaluate our current state and potential opportunities and head into 2018 and beyond!
CHARITABLE ENDEAVORS: AHOU has a long history of being involved in chari-table endeavors, and we are excited to expand our philanthropic footprint through an annual charitable campaign in which our members and the under-
writing community can come together to give back to a greater cause. This year, our spotlight charity is Alex’s Lemonade Stand Foundation, whose mission is to create awareness of childhood cancer and fight for a cure. Check out AHOU.org for more information on Alex’s and learn how you can get involved and join in the fight against childhood cancer!
2018 CHICAGO CONFERENCE: One of our major initiatives, as always, is to put on a world-class conference where we bring together our members and the underwriting community for great networking opportunities, premier
educational content and an incredible marketplace! AHOU’s 2018 Annual Conference in Chicago will be no different. We have a great program lined up that will be hitting on our core of underwriting and mortality protection, with a deep focus on areas of change that are relevant, cutting-edge, developing or disrupting our companies and our industry. Our Executive Council VP of Program Development, Pam Bergsten of SCOR, and our AVP of Program Development, Scott Corbett of Ameritas Life - along with our entire Program Committee - have done a spectacular job of making sure that our breakout ses-sions will have variety, complexity and relevance for all attendees. Our theme this year fits with the spirit of Chicago as well as the current and future state of the underwriting industry – “Underwriting and the Winds of Change”! I speak for the Executive Council and Program Com-mittee in stating that we hope to see you in Chicago this spring for a phenomenal conference, hope that you reach out with any questions or concerns that you may have, and that you go to AHOU.org to become a member, get the most out of your membership, or work to increase your knowledge through Advance 360 offerings!
OTR thanks Bill Swarner - ©2018 Swarmer Media for his photos of the 2017 AHOU Planning Commitee Meeting which appear in this issue.
ON THE RISK vol.33 n.4 (2017) 27April 29–May 2, 2018 • Sheraton Grand • Chicago, Illinois
AHOU 201817thAnnual Conference
UNDERWRITING And the Winds of Change
GENOMICS AUTOMATIONREGULATION
CAREER
UW ENGINES
ACCELERATED
LONGEVITY
CHANGE MANAGEMENT
ENGAGEMENT
EHR
Register Now @ AHOU.org
ON THE RISK vol.33 n.4 (2017)28
LOCAL, REGIONAL AND INTERNATIONAL ASSOCIATIONS NEWS: THE 45TH ANNUAL SEHOUA MEETING IN FLORIDA
The Southeast Home Office Underwriters Association (SEHOUA) held its 45th annual meeting from June 21-23 in St. Pete Beach, FL, at the Don Cesar Hotel. Keynote speakers included Dr. David Duddleston from Southern Farm Bureau and Brian Lanzrath from ExamOne on “Analytics - Mind versus Matter.” Other speakers included Doug Ingle from Hannover Re on “The Meaning of Underwriting” and Dr. Dan Zamarripa from AIG on “Life After Bariatric Surgery.”
OTR thanks Beth Banocy, National Life Group, for her photos from the 2017 Annual SEHOUA Meeting which appear in this issue.
From the SEHOUA 2017 Annual Meeting (left to right): Tara Eckstein, Brighthouse Financial; Kim Lancaster, RGA; Jenny Mason, Alfa Life Insurance Company; Kathy Green, Protective Life; Susan Mayer, Hannover Re; Lauri Chessario, Erie Family Life; Paul Jones, Hannover; Gina Klucas, Ameritas; Jeremy Wesson, Southern Farm Bureau Life Ins. Co.; Carla Wiseman, Examone; Bob Morris, Examone; Blaine Milstead, Clinical Refer-ence Laboratory; Paul Miller, Hannover.
From the SEHOUA 2017 Annual Meeting: Outgoing president Jeremy Wesson, Southern Farm Bureau Life Ins. being presented with his outgoing president plaque by incoming president Gina Klucas, Ameritas.
Keynote speaker Dr. Dan Zamarripa, AIG, speaks on "Life After Bariatric Surgery."
ON THE RISK vol.33 n.4 (2017) 29
THE FUTURE IS TODAY 46TH ANNUAL SOUTHEASTERN HOME OFFICE UNDERWRITERS ASSOCIATION
SAVE THE DATE JUNE 20-22ND, 2018
BOCA RATON RESORT IN BOCA RATON FLORIDA
Watch OTR for upcoming program announcements
Contact SEHOUA President Gina Klucas at [email protected] for additional information on early
bird memberships or sponsorship opportunities.
ON THE RISK vol.33 n.4 (2017)30
WHY THE INDUSTRY’S PATH TO SUCCESS IS UNDERWRITINGA PRIMER ON WHERE WE’VE BEEN AND WHERE WE ARE TODAY
Executive Summary The insurance industry, going back hundreds of years, was built on, and around, the underwriting capabilities particular to each era. In the last several decades, under-writing has contributed in even greater ways to the insurance business. Underwriting has driven innovation and enabled an efficient, competitive and profitable insurance marketplace for an increasingly savvy customer. As technology rapidly progresses in every sphere of our lives, and an explosion of data ensues, underwriting is once again leading the charge and enabling a customer-centric, data-driven and profitable expansion of our business capabilities as an industry. Keeping in sight where the industry has been and where it is today, an experienced underwriter reflects on ways underwriting has been at the core of insurance industry innova-tions, and offers a glimpse of the future in which underwriting will play an essential role.
Many consider the birth of the insurance industry to be nearly 3 centuries ago with the founding of Lloyds of London (and for life insurance in the US, the Philadelphia Contributionship in 1752 and Pres-byterian Minister’s Fund in 1759). Others maintain that insurance started in Babylon, where loans were granted to merchants with the provision that if the shipment was lost at sea, the loan did not have to be repaid (a “bottomry” contract). The interest on the loan covered the insurance risk.
In every era, underwriting has been the key activity in risk mitigation. In modern times, the appropriate classification of individual risks has proven to be of tremendous value to both the insurer and the con-sumer. Without underwriting, preferred rates could not be offered. Without underwriting, improvements in mortality due to medical advances over the last several decades could not be passed onto the insurer or the consumer. The practice of underwriting has been continually refined to support a fair and efficient translation of life expectancy into reduced rates for consumers. The tables (see next page) demonstrate how changing underwriting philosophy has driven progress for just one condition, diabetes. Today, life insurance underwriting guidelines are even more refined and incorporate advances in re-search, technology and standards of care. Improved mortality, preferred classes and increasingly attrac-tive rates are enabled by consistent and accurate underwriting. Yet, despite these significant changes, the process of underwriting has stayed relatively consistent. Incremental change accurately describes underwriting evolution. Now, we’re on the cusp of accelerating incremental change in some areas and paradigm shifts in others. With the influx of new technologies, research and data into the insurance
ecosystem, a new reality is developing in the world of underwriting. Three core drivers are essential to forward momentum: refined underwriting outcomes, improved customer experience and actual results at, or better than, expected. Only a vision with a clear path to these three drivers will hold up.
Paul Rivard, FLMI, AALUVP Underwriting MarketingMunich Re US Atlanta, [email protected]
ON THE RISK vol.33 n.4 (2017) 31
SCOR’s strengthstands out clearly
“SCOR’s success story continues. Over the past 15 years, the Group has overcome obstacles, faced economic and financial crises, and absorbed major natural catastrophes. Throughout this long journey, SCOR has held its course. SCOR has achieved the solvency and profitability strategic targets set out in its successive plans. It has grown, reinforced its financial strength and expanded and deepened its franchise. It has diversified its portfolio and developed a superior risk management strategy. Today, SCOR is a truly global group. The upgrade of our rating to A+ by A.M. Best on September 1st, 2017, which follows the upgrade to AA- by S&P and Fitch in 2015 and to Aa3 by Moody’s in 2016, once more demonstrates the relevance of SCOR’s business strategy and confirms SCOR as a Tier 1 global reinsurer. The Group’s strength is a clear benefit for our clients.”
Denis KesslerChairman & Chief Executive Officer
A+2017
Stable OutlookAM Best
Fe55.93326
Iron
Co58.93327
Cobalt
Ni58.69328
Nickel
Tc98.90743
Technetium
Mn54.93825
Manganese
Pd106.4246
Palladium
Ag107.86847
Silver
Cu63.54629
Copper
In114.81849
Indium
Sr87.6238
Strontium
Mg24.30512
Magnesium
Ga69.73231
Gallium
Ca40.07820
Calcium
Au196.96779
Gold
Tl204.38381
Thallium
Ba137.32756
Barium
Os190.2376
Osmium
Re186.20775
Rhenium
Hs269108
Hassium
Bh264107
Bohrium
Ds269110
Darmstadtium
Mt268109
Meitnerium
Rg272111
Roentgenium
Uutunknown113
Ununtrium
Ra226.02588
Radium
AA-2015
Stable OutlookStandard & Poor’s
AA-2015
Stable OutlookFitch Ratings
Aa32016
Stable OutlookMoody’s
www.scor.com
ON THE RISK vol.33 n.4 (2017)32
Underwriting of yesterdayTypically, life insurance underwriting was slow and methodical. A paper application was submitted. Age/amount requirements were predetermined and almost always required a visit from a nurse, who asked many of the same questions as the application, and would bring a scale, a needle and a little cup to
the discussion. Slowly, all of this evidence made its way from the agent’s briefcase and the trunk of the nurse’s car to the home office, where the underwriter managed a large pending count, and reviewed new applications and the additional papers that were mailed in or faxed in that week. The underwriter would spend several hours looking at the application
Basic debits (applicable for all diabetics)
Age of onset (discovery)
Debits
0-9 years IC10-15 years +25016-19 years +20020-25 years +15026-29 years +12530-35 years +10036-39 years +7540 and over +50
1980s:
Severity Criteria Rating (Current Age)Best • Well controlled, HbA1c gener-
ally <7.5% • No nephropathy, retinopathy or neuropathy • Normal microalbumin (re-quired) • No hypertension • No lipid debits
Age <30...........Refer to MD Age 30-39....................+125 Age 40-49..................... +75 Age 50-59..................... +50 Age 60-69......................+25 Age ≥70.......... +0 (not pref)
Average • Average control, HbA1c gener-ally 7.5-9.5% • Microalbumin normal or not done, or abnormal microalbumin on single specimen • No retinopathy or mild back-ground retinopathy • No neuropathy or only mild peripheral neuropathy
Age <30...........Refer to MD Age 30-39..............+150-200 Age 40-49............. +100-150 Age 50-59............... +75-100 Age 60-69..................+50-75 Age ≥70........................ +50
Worst • Poor control, HbA1c generally 9.6-12% • Microalbumin abnormal on more than one specimen • Significant background or “pre-proliferative” retinopathy • Severe peripheral neuropathy
Age <30...........Refer to MD Age 30-39...............Decline Age 40-49............. +250-300 Age 50-59............. +200-250 Age 60-69..............+100-150 Age ≥70................. +75-125
*Representative of a hypothetical but typical rating scheme from the referenced period.
1990s:
ON THE RISK vol.33 n.4 (2017) 33
and additional papers, ordering more evidence and communicating with the field. The consumer was kept in the loop to varying degrees, depending on the agent and whether or not the underwriter had to obtain additional evidence, questionnaires or missing answers on the application. Finally, the agent was advised of the offer, a contract was printed, and the consumer signed and wrote a check for a thick stack of legal verbiage (the insurance contract).
Underwriting was based on both objective and sub-jective information. Objective information, such as a clinical diagnosis of cancer, a lab result or a financial statement from a bank, is concrete and factual. Sub-jective information leaves room for interpretation because it involves intangibles such as a description of symptoms on a medical report or an ambiguous question on an application. For instance, an applica-tion question about avocations may end with, “…or any other hazardous avocation?” The applicant may not consider climbing an active volcano as hazardous or see it as an avocation because he only does it once or twice every couple of years. In addition, individual underwriters may view subjective information dif-ferently. For conceptual clarity, objective and subjective infor-mation can be categorized into three buckets: finan-cial, medical and lifestyle. Tax returns and financial statements (objective) and the declaration of income (subjective) are all financial. Medical information includes part two of the application (subjective), labs (objective) and the attending physician statement (APS)(both objective and subjective). Lifestyle is re-vealed through certain questions on the application: avocations, travel or in an APS (generally subjective).
Underwriting of todayLife insurance underwriting departments are feeling the shift in the emerging model, but have only begun to scratch the surface of its potential. The biggest change from yesterday’s underwriting is the modeling of data. In the past, underwriters looked at raw data, for example, a lab test result. With the advent of lab scoring, underwriters began incorporating the raw data and the scored/modeled data into their deci-sions. Since the introduction of lab scoring, financial-based scoring, lifestyle scoring and entire models that incorporate many variables to score or predict behavior (i.e., smoking) or preferred class, and in some cases mortality/longevity, have developed. The trend is to integrate models into the old method of underwriting. These models predict various fac-tors or outcomes and lead to triaging best and worst risks, thereby accelerating the underwriting process
and improving the customer experience — often by eliminating the paramedical exam and labs. We are seeing a slow decrease in subjective data and a gradual increase in objective data, as well as models built on that objective data. The human element is still prevalent in underwriting processes, but it is fo-cused on technically challenging situations where the professional underwriting skillset shines. When “jet underwriting” was first used to triage simple cases, it could be used as a stepping stone into a great career. It was an effective tool to develop staff from within and groom them to become underwriters.
Today, some jet underwriting tasks are done by algo-rithms and rules engines. The good news is that this has created an opportunity for seasoned underwriters to enter an emerging field where underwriting meets analytics and decision engines. This is proving to be a fascinating and ever-evolving area with tremendous opportunity. Many insurers have developed research and development teams, analytics teams and innova-tion teams. They are often housed within the under-writing department, but involve multiple disciplines, including data modelers and scientists, statisticians, actuaries with statistics or data backgrounds, and of course underwriters.
Implicit in this triage/modeled data concept is the automation of components of the process. This is the new normal. Automation, however, has its limitations: large or complex cases still require a manual underwriting review. Automating under-writing processes is relatively simple compared to automating underwriting outcomes on individual lives. As a result, there continues to be high demand for senior underwriters who specialize in larger and more complex cases. New sources of data and new models must be em-ployed thoughtfully. The key to success is the proper use of the proper data. Ultimately, a decision engine and scores developed for, or within, the rules engine must be based on significant research and analysis that prove the protective and predictive value of various data sources. In addition, it is essential that underwriters be empowered by understanding the factors that lead to various scores. This enables a holistic review of applicants rather than black box decisions. This transparency and justification will be expected by the consumer. Streamlining the underwriting process by creating data-augmented, rules-based models leads to quicker decisions and greater numbers of favorable policies being issued at affordable rates. If done properly, this is a win for both the consumer and the industry.
ON THE RISK vol.33 n.4 (2017)34
The two trends of developing underwriters into ana-lytics underwriters and the need for more seasoned and technically advanced underwriters are favorable for the profession. The outlook for underwriting is bright. As in the past, even back to Babylon, the ef-ficient pricing and transfer of risk are built on the underwriting chassis, and this will not change. An analogy that applies here: Underwriting is the car; the data we use are the components that build the engine, which leads to the overall driving experience. The customer is the passenger, actuarial pricing is the
About the AuthorPaul Rivard, FLMI, AALU, is currently 2nd VP Underwriting Marketing, where he works to execute high-value solutions that connect with client strategies. Solutions have ranged from underwriting training to underwrit-ing automation, to big data/analytics initiatives.
Paul joined Munich Re US (Life) in underwriting in 2007. He managed the underwriting administration team as well as the disability underwriting team before moving into a business development role. Prior to joining Munich Re US (Life), Paul worked for Munich Re in Canada. Paul has many years of industry experience, including underwriting life, DI, CI and LTC products.
road. Underwriting built the Model T, the hybrid, the electric car, and now we’re working on a self-driving car which will improve the customer experience and open many doors and opportunities for our profession and our industry. Referenceswww.lloyds.com/lloyds/about-us/history.https://1752.com/about-us/history/.The Origin and Early History of Insurance, including the contract of
Bottomry, by C.F. Trenerry, BA, DSc, AIA.Horn of Plenty: The Story of The Presbyterian Ministers’ Fund, by John
A. Baird.
FIRST FINANCIAL UNDERWRITING SERVICES, INC. “Inspection Reports Should Answer Questions NOT Raise More Questions”©
20+ Years of EXCELLENCE www.firstfin.com
ONE SHOP FOR ALL YOUR INSPECTION RELATED NEEDS
Specializing in Electronic Inspection Reports (Filtered EIR)
MOST DETAILED FINANCIAL INSPECTIONS MOST ACCURATE CRIMINAL RECORDS, SPECIAL SSN TRACE REPORTS, SPECIALTY COURT RECORD SEARCHES
BUSINESS BENEFICIARY REPORTS WITH FULL FINANCIAL DETAILS
FULL IN‐HOUSE SPANISH SERVICES WHICH INCLUDES CRIMINAL COURT RECORDS AND CREDIT REPORTS IN MEXICO
THIRD PARTY REPORTS & EIRS ON LOWER AMOUNTS FOR FILTERED IDENTITY AUTHENTICATION AND FOR FRAUD DETECTION
FULL INSPECTION / APS TRANSLATION SERVICES IN HONG KONG & THE ORIENT
TAILOR MADE QUESTIONNAIRE AVAILABLE ON REQUEST
RECORDED INTERVIEWS AT NO ADDITIONAL COST
TELEPHONE INTERVIEW REPORTS ENCRYPTED ORDERING AND TRACKING SYSTEM INTERVIEWS IN LANGUAGE OF CHOICE CUSTOMIZED ELECTRONIC BILLING DETAILED PFQ & STOLI QUESTIONNAIRE FOREIGN LANGUAGE APS TRANSLATIONS
(SPANISH, MANDARIN, CANTONESE, etc.) SPECIALIZED CLAIMS SERVICES IN USA, CANADA AND LATIN AMERICA
MOTOR VEHICLE REPORTS
We invite you to call our office to discuss your basic, intermediate, specialty, complex, international cases, APS translation and filtered EIR needs. Live agents available from 8:00 AM to 8:00 PM Eastern Monday through Friday. With over 200 years of combined experience, we can help you assess the risk at hand.
Contact Information EMAIL: [email protected]
TELEPHONE NUMBER: 1 (800) 570 3477 FAX NUMBER: 1 (800) 571 3477
ON THE RISK vol.33 n.4 (2017)36
PHARMACOGENETICS: THE BASIC BUILDING BLOCKS
Executive Summary This article is a primer on pharmacogenetics, which is the study of how an individual’s gene can affect a response to medi-cation. It will discuss how genetic variations can influence how an individual processes medica-tion. Examples of how disease treatment in the future can be improved will be provided.
IntroductionWhen I first heard about pharmacogenetics in un-derwriting a few years ago, I thought to myself, “I can finally put my knowledge of Cell and Molec that I learned in my undergrad to use.” Shortly after, I realized that my studies in DNA sequencing were nearly 2 decades ago, and much like every other field in health sciences, genetics had considerably evolved. Fortunately for me, although the “book” on genetics had a new cover and told a progres-sive story, the language had a familiarity to it. It’s not uncommon for Life Underwriters to have backgrounds in fields other than the sciences, which is why genetics can be overwhelming and foreign to some. With this in mind, let’s get started with some basic definitions that will help im-prove our understanding of pharmacogenetics. DNA and GenesPharmacogenomics is the study of how genes affect a person’s response to drugs. This field combines pharmacology (the science of drugs) with genomics (the study of genes and their functions) to develop effective, safe therapies and doses that will be tai-lored to a person’s genetic makeup. Most drugs that are currently available are prescribed accord-ing to a “one size fits all” approach, yet they don’t necessarily work the same way for everyone.1 While pharmacogenomics is the study of how different components of a genome influence variability in drug responses (i.e., efficacy and toxicity), pharmacogenet-ics is the study of how this occurs at a specific gene.
Now, think of DNA as the information, or the backbone if you will, of pharmacogenetics. DNA contains the instructions required for an organism to develop, survive and reproduce. To carry out these functions, DNA sequences must be converted into messages that can be used to produce complex molecules such as proteins. These proteins are responsible for most of the work in our bodies.2
A pair of genes, where one is dominant and one is recessive, is referred to as heterozygous. Sequence differences in the same gene are called alleles. If they are present in <1% of the heterozygous individuals in a given population, the variations are called sequence variants (amino acid sequence).3 The difference in the DNA code that occurs in less than 1% of the popula-tion is referred to as a mutation, as seen in rare dis-eases such as cystic fibrosis, sickle cell anemia and Huntington’s disease. On the other hand, if alleles are present in >1% of heterozygous individuals in a given population, the variation is called polymor-phism. A single polymorphism is less likely to be the main cause of a disease, and often has no visible clinical impact. We can also refer to polymorphism as a discontinuous genetic variation, resulting in the occurrence of several different forms or types of individuals among the members of a single species.4
A discontinuous genetic variation divides the in-dividuals of a population into two or more sharply distinct forms. Polymorphisms can be monogenic: due to allelic variation at a single gene, or polygenic: due to variations at two or more genes. Polymorphic refers to frequently occurring monogenic variants occurring at a frequency of >1%, as previously noted.5
Types of Genetic VariationEssentially two types of genetic mutation events ac-count for all forms of variations. Single base muta-tion, which substitutes one nucleotide for another (single nucleotide polymorphisms - SNPs), and the insertion or deletion of one or more nucleotides. The
Garen MarkarianUnderwriterLOGiQ3
ON THE RISK vol.33 n.4 (2017) 37
Contact IBU today!
Call Lincoln Tedeschi at 860.295.1190email: [email protected]
Simplifying Life Insurance Underwriting
Improve Time Service
Expand Underwriting
Capacity
Minimize Anti-Selection
Reduce Costs
IBU is the market leader in providing solutions that simplify underwriting for the life insurance industry. We put technology and the expertise of experienced underwriters to work in a variety of ways that improves turnaround time and reduces costs.
Underwriting Made Easy
IBU, Inc., 100 Pearl Street, 14th Floor Hartford, CT 06103
Telephone Underwriting and Tele-underwriting Interviews by underwriters with an underwriting decision.
Telephone Interviews by Underwriters APS alternative and expert system kick out telephone interviews with or without a decision.
APS Summary Solutions Carve out large APS to be summarized by experienced IBU underwriters.
Instant EOI Underwriting Decisions Low-cost, rules-based decisions for group medical underwriting.
Custom Underwriting Solutions IBU is a nimble, innovative underwriting service provider. Contact us to brainstorm any potential underwriting need.
simpleibuinc.com
ON THE RISK vol.33 n.4 (2017)38
latter may include tandem repeat polymorphisms and insertion/deletion polymorphisms. The most common genetic variants in humans are SNPs.6
Why Does Genetic Variation Matter?Genetic variation can affect pharmacokinetics, the movement of drugs throughout the body (i.e., transporters, plasma protein binding, metabolism), as well as pharmacodynamics, the effects of drugs and the mechanism of their action (i.e., recep-tors, ion channels, enzymes, immune molecules).
Some exogenous and endogenous factors that can contribute to this variation include: age, gender, pregnancy, diet, exercise, disease, in-fection, occupational exposures, contaminant drugs, cardiovascular and hepatic function, stress, alcohol intake and smoking to name a few.
DNA Sequence Variation and Its ImpactThe impact of DNA variation may include a change in the protein produced by the genetic code (i.e., amino acid). It may also cause a change in protein function or quantity. It may even alter the stability of mRNA (messenger RNA). There is also the possibility that these DNA variations may have no consequence at all.
These various outcomes can be divided into four groups when a drug is administered in a clinical trial. Group A will have an outcome that is beneficial without toxicity (side effects); Group B will experience benefits and toxicity; Group C will not benefit from the drug, but will experience side effects; and Group D will not be affected at all (Figure 1).
Putting Pharmacogenetics into PracticeAn example of a drug that may exhibit this kind of outcome is codeine. Codeine is used to relieve mild to moderately severe pain, and it belongs to a class of opioid analgesics. The hepatic CYP2D6 enzyme metabolizes 25% of all prescribed drugs. It converts codeine into its active metabolite, morphine, which provides a more potent analgesic effect compared to its parent chemical codeine. Less than 10% of the population carries two inactive copies of CYP2D6. They are referred to as “poor metabolizers.” On the other hand, individuals who carry more than two functional copies of the gene can metabolize codeine to morphine more rapidly and more completely. They are referred to as “ultrarapid metabolizers.” As a result of the increased conversion to morphine, ul-trarapid metabolizers may experience the symptoms associated with opioid overdosing. even with normal doses of codeine. The CYP2D6 is also responsible for metabolizing other drugs such as antipsychot-ics, antidepressants and cardiovascular drugs.7
Suppose an applicant has a history of asthma, and is taking medication for daily symptoms and main-taining average control. With a genetic test, the applicant can identify the exact mutation (single nucleotide polymorphism - SNP), such as Arg16, and target the asthma with a specific treatment for more effective therapeutic benefits. This will poten-tially establish greater control of the airway disease, producing fewer symptoms, and perhaps ultimately yielding a more favourable underwriting decision.8 Diabetes is another example of a medical condition commonly seen by underwriters. Managing diabetes also has the potential to be improved by identifying the variants related to drug-metabolizing enzymes, drug-transporters, drug targets and inter-individual differences in the treatment outcomes. Let’s say a non-insulin-dependent diabetic (Type II) is taking metformin daily and is maintaining average-to-poor blood sugar levels. This average reading could poten-tially be improved if a genetic test is done revealing the specific mutation (Arg64), and an alternative therapy is applied that is more effective for that exact mutation.9
The Benefits of Using Genetics as a ResourceInformation about one’s genetic make-up can be a useful resource. We can predict a person’s response to a particular therapy and the risk of its side effects. Furthermore, identifying genetic variation could have
Figure 1
ON THE RISK vol.33 n.4 (2017) 39
huge cost saving benefits through increased drug effec-tiveness, increased drug safety and fewer adverse re-actions. This eventually leads us to personalized med-icine, where drugs are tailored to a specific genotype. Widespread application of pharmacogenetics may ultimately help life insurers offer more favourable and preferred decisions to applicants who pres-ent with optimally controlled chronic diseases as a result of genetic-specific tailored treatments.10 Pharmacogenomics can be a very powerful tool in achieving personalized medicine. Genetic tests for responses and reactions to drugs may even become a part of regular health care, and not just for use in specialist clinical settings. The more we see this in health care, the more likely we will see it in insurance, providing life underwriters with valuable information and ultimately leading to more accurate medical risk evaluations.Notes1. What is pharmacogenomics? https://ghr.nlm.nih.gov/primer/genomi-
cresearch/pharmacogenomics.2. Deoxyribonucleic Acid (DNA): www.genome.gov/25520880/deoxyribo-
nucleic-acid-dna-fact-sheet/.3. Phenotype and Genotype: https://biomed.brown.edu/Courses/
BIO48/5.Geno.Pheno.HTML.4. Genetic Polymorphism: What Is It?: www.thebalance.com/genetic-
polymorphism-what-is-it-375594.5. Continuous and Discontinuous Variation: www.biologymad.com/
resources/RevisionM5Ch2.pdf.6. What kinds of gene mutations are possible?: https://ghr.nlm.nih.gov/
primer/mutationsanddisorders/possiblemutations.7. Codeine Therapy and CYP2D6 Genotype: www.ncbi.nlm.nih.gov/
books/NBK100662/.8. Asthma pharmacogenetics and the development of genetic profiles
for personalized medicine: www.ncbi.nlm.nih.gov/pmc/articles/PMC4325626/.
9. Pharmacogenetics and personalized treatment of type 2 diabetes: www.ncbi.nlm.nih.gov/pmc/articles/PMC3900064/.10. Genetic Information Nondiscrimination Act of 2008; www.genome.
gov/10002328/.
About the AuthorGaren Markarian has over 10 years of experience in the insurance industry. He has an undergraduate de-gree in Neuroscience from the University of Toronto, and a post-graduate diploma as a Clinical Research Associate from the Michener Institute. Garen has been a featured author of underwriting-focused blogs for LOGiQ3. He is a member of the LOGiQ3 Underwriting Team involved in production underwriting, case clinic presentations, audits and E-Learning content development for the Underwriting Training Program. He is currently located in Toronto.
If you want to see True
Excellence again...
contact us. T
ILF
OR
D C
ON
SU
LTIN
G
ww
w.ti
lford
cons
ultin
g.co
m
ON THE RISK vol.33 n.4 (2017)40
• Provides risk-based scoring of all laboratory results in combination with build and blood pressure
• Identifies high-risk cases requiring review and stratifies standard or better risks into appropriate preferred categories, based on their mortality risk and your underwriting classes
• Accounts for age and gender so that the relative mortality for each applicant, compared to peers, is correctly identified
• Scores every component of the lab profile, including reflexive tests and drugs of abuse
• Delivers an applicant report that includes the risk (in debits or credits) for each test, as well as the total score, enabling explanation of your decisions
• Underlying science and scoring based on years of CRL published research (Journal of Insurance medicine)
Smart Score®changes that!
Q.
Smart Score® will improve your bottom line with better mortality and allow your underwriters to focus on cases where they add maximum value.
Greater Insights. Better Outcomes.®
Based on early-claims file review of several respected insurers,
far too many!
How many early claims are caused by
missed lab results? A.
Clinical Reference Laboratory | 800.882.1922 | www.CRLcorp.com/insurance
Quest, Quest Diagnostics, ExamOne, any associated logos, and all associated Quest Diagnostics registered or unregistered trademarks
are the property of Quest Diagnostics. All third party marks - ® and ™ - are the property of their respective owners.
©2017 Quest Diagnostics Incorporated. All rights reserved.
THE VALUEOF KNOWING
Asautomated underwriting workflows are becoming more common, we areworking with industry leaders, like you, to build solutions that leveragepowerful health data. Providing you this valuable health information helpsyou make decisions accurately and quickly while protecting your company’slong-term future.
T
See how valuable these new data solutions can be for youand your business at ExamOne.com/ValueOfKnowingOTR
RISKIDENTIFIER
POLICYEXPRESS 2.0
20SCORE
THE POWEROF DATA
TM
TM
Triageworkflow that utilizes healthdata to build custom risk profiles.
Real-time, applicant-level score thatproduces health-driven results for lifeinsurance applicants.
TURN DATA INTO ACTION
X1 Value ad 2.qxd:Layout 1 8/7/17 11:42 AM Page 1
ON THE RISK vol.33 n.4 (2017) 41Quest, Quest Diagnostics, ExamOne, any associated logos, and all associated Quest Diagnostics registered or unregistered trademarks
are the property of Quest Diagnostics. All third party marks - ® and ™ - are the property of their respective owners.
©2017 Quest Diagnostics Incorporated. All rights reserved.
THE VALUEOF KNOWING
Asautomated underwriting workflows are becoming more common, we areworking with industry leaders, like you, to build solutions that leveragepowerful health data. Providing you this valuable health information helpsyou make decisions accurately and quickly while protecting your company’slong-term future.
T
See how valuable these new data solutions can be for youand your business at ExamOne.com/ValueOfKnowingOTR
RISKIDENTIFIER
POLICYEXPRESS 2.0
20SCORE
THE POWEROF DATA
TM
TM
Triageworkflow that utilizes healthdata to build custom risk profiles.
Real-time, applicant-level score thatproduces health-driven results for lifeinsurance applicants.
TURN DATA INTO ACTION
X1 Value ad 2.qxd:Layout 1 8/7/17 11:42 AM Page 1
ON THE RISK vol.33 n.4 (2017)42
PROFESSIONAL SOCCER PLAYERS
Executive Summary Professional soccer is rapidly growing in popularity in new markets throughout North America, China and elsewhere. Underwriting professional athletes can present unique challenges, and this article seeks to high-light the main risks that need to be considered. Primary considerations include sudden cardiac death, amyotrophic lateral sclerosis (ALS), vio-lent deaths, mental health, musculoskeletal inju-ries, and concussions and consequences thereof. It is important to focus on studies examining cause-specific and all-cause mortality – just be-cause a famous player dies at a young age from sudden cardiac arrest does not necessarily mean an insurer should automatically adjust its life ratings for all athletes. The long-term effects of concussions, such as the development of chronic traumatic encephalopathy (CTE), continue to be studied and, as yet, only possible links to ALS from repeated head trauma have been found.
Introduction The Fédération Internationale des Associations de Footballeurs Professionnels (FIFPro) is the world-wide representative organisation for professional soccer players, representing in excess of 65,000 play-ers.8,9 The total number of professional soccer players is likely higher, though, as many players’ associations are not members of FIFPro. Based on the 2006 survey (colloquially known as the “Big Count”) conducted by the Fédération Internationale de Football Association (FIFA), there were 113,000 registered professional soccer players globally. In the Americas, the 15 most valuable soccer clubs include Brazilian clubs Corinthians, Palmeiras and Gremio; Mexican clubs CD Guadalajara and Monterrey; as well as US clubs LA Galaxy and the Seattle Sounders. Top valued European clubs in-clude Manchester United, Real Madrid, Barcelona, Chelsea, Bayern Munich, Arsenal, Manchester City and Juventus.6
Top-paid players include Cristiano Ronaldo (Real Ma-drid/Portugal national team), Carlos Tevez (Shanghai Shenhua/Argentina national team) and Lionel Messi (FC Barcelona/Argentina national team). Recent in-vestment in Chinese football clubs such as Shanghai SIPG and Tianjin Quanjian has been huge, with China now having 10 of the top 20 highest-paid players in the world. Italian football club AC Milan was sold to the Chinese-led consortium Rossoneri Sport Invest-ment Lux for a reported €740 million, while Wanda Group, owned by Chinese billionaire Wang Jianlin, is a major sponsor of FIFA, with Wang himself owning a 20% stake in Atletico Madrid.
Mortality RisksThe main mortality and morbidity risks for profes-sional soccer players arise from cardiac conditions,
concussion, musculoskeletal injuries, amyotrophic lateral sclerosis(ALS), group catastrophic accidents, and kidnap or murder. Cardiac conditions are a primary cause of mortal-ity in professional soccer players. Figures indicate that 90 association soccer players have died since January 2000, the vast majority of whom suffered cardiac arrest, heart failure or collapse. Yet exercise-related sudden death is rare, with an incidence rate of 0.1/100,000 per year in males. The most prevalent diseases detected at screening are Wolff-Parkinson-White syndrome (550-2180/million), congenital anomalies of the coronary arteries (1000/million) and hypertrophic cardiomyopathy (100-790/million).2 Atherosclerotic coronary disease is sometimes seen in older male footballers aged 35-40 years.
For the purpose of this article, the terms football and soccer are used interchangeably and synonymously.
Hilary Henly, FCIIHead of Underwriting Ireland &Director of Divisional Underwriting ResearchRGA International Reinsurance CompanyDublin, Ireland
ON THE RISK vol.33 n.4 (2017) 43
ONE BIG REASON TO THANK OUR MEMBERS.WE’RE THE #1 AUTOMATED UNDERWRITING REQUIREMENT.
781.751.6000 mibgroup.comMIB, Inc., Braintree, MA, provides MIB’s Underwriting Services exclusively to members of the MIB Group, Inc.
1 http://www.limra.com/Posts/PR/Industry_Trends_Blog/Half_of_Life_Insurers_Using_Automated_ Underwriting.aspx
A new LIMRA study reports that virtually every insurer uses MIB in their automated underwriting processes.1 Through this unparalleled partnership between MIB and its member insurers, we continue to deliver superior protective value for both automated processing and full underwriting. Thanks for making MIB your top choice when underwriting life and health insurance — for more than a century.
Here today. With you tomorrow. That’s MIB.
ON THE RISK vol.33 n.4 (2017)44
The European Society of Cardiology (ESC) and the International Olympic Committee (IOC) recommend resting electrocardiograms (EKGs) for all young ath-letes. In 1982, mandatory screening was introduced in Italy, resulting in a drop of 90% in the incidence of sudden cardiac death. Data from a study in Italy indicated that the sudden death rate in athletes aged 12-35 years was 4.19/100,000 person-years before screening. Following legislation, the sudden death rate fell to 0.87/100,000, comparable to rates for the general population, ranging from 0.77-0.81.5,
16 The Union of European Football Associations (UEFA) requests that all players under the age of 21 have extensive medical tests, including EKG and echocardiogram. Yet the American College of Car-diology and the American Heart Association do not recommend screening based on the small number of detected cases and the high cost involved. Sharma et al. report that EKGs on competitive athletes have a false-positive rate of 9% to 25% and found no dif-ferences in sudden cardiac death rates between the Italian athletes who were screened and a comparable group in Minnesota who were not.12
Repeated head impact has been linked to conditions such as ALS. This is an adult-onset degenerative ner-vous system disorder which has been associated with trauma, exposure to metals, herbicides, smoking and heavy physical activity. Aging and male gender are known risk factors. Soccer players may be at increased risk of developing ALS due to the amount of heavy physical exercise undertaken, repeated head trauma caused by the practice of “heading” the ball, the use of illegal toxic substances, and exposure to environ-mental toxins such as fertilizer used on the pitch. A study by Chio et al. noted the time period from the end of professional play to the onset of disease was from 4 to 19 years. The risk of ALS was highest in those whose career was longer than 5 years, for midfielders and for players who started after 1980, with a mean age of onset of 43.4 years. However, there are few studies supporting the relationship between mechanical traumas, such as brain damage from repeatedly heading a ball, and ALS.1, 4
Additional risks include group catastrophe as teams travel together, as happened to the Chapecoense Brazilian team whose plane came down in Colombia in November 2016. However, group accidents are rare, with only four reported incidents in the last 20 years. Numerous journeys are made by soccer teams globally without incident. Murder and kidnap are risks for high-profile indi-viduals, including for professional footballers. There
have been 42 professional footballers murdered since 2000, primarily those from South or Central America. According to analysts, however, sports figures are generally left alone by organized crime groups, and player kidnappings are rare. There are few formal studies which look at all-cause mortality. A study by Taioli on soccer players in the Italian professional leagues found that overall mortal-ity and morbidity rates from cancer and cardiovascu-lar disease were lower than expected in the general population, but that mortality rates for ALS and car accidents were significantly higher than expected.17
An investigation of German International players into longevity of soccer players by Kuss et al. concluded that players in international matches have shorter longevity than the general population.14 Gouttebarge et al. found an overall mortality rate of 0.47/1,000 players per annum in their study, with disease being the leading cause of death; accidents accounted for a quarter of all deaths, while 11% died through suicide.10 Morbidity RisksSoccer players are specifically prone to musculoskel-etal injuries, facing a higher risk of injury playing soccer than in other team sports. Injury rates are around a thousand times higher for professional soc-cer players than for individuals working in industrial occupations.11 Players are three times more likely to be injured during match play than in practice, with pre-season activity having the highest injury rate of all. Two-thirds of all injuries are to the lower limbs, with more injuries occurring in the second half of match play than the first.15
The UEFA EURO 2016 injury study recorded the injury burden (number of days of absence per 1000 hours of exposure) for match play at 16 times higher than in training sessions. Two-thirds of all players returned to full play within 7 days, 18% of injuries required absences of 8-28 days, and 18% caused absences of more than 28 days.20 The risk of injury during match play increases with professional level of play, with 10-15 injuries/1000 hours at amateur level, but 25 injuries/1000 hours at top professional level. Injury risk is higher in players under age 25 compared to those aged 30 and older (65 vs. 24 injuries/1000 match hours). A higher injury risk was observed in forwards and a lower injury risk in goalkeepers than in defenders and midfielders.18,22
Contact sports are a major cause of concussion. While symptoms frequently resolve within 1 to 2 days, over a quarter of concussions take more than 1 week to resolve. A player who has suffered a concussion is more susceptible to repeat injury on return to early
ON THE RISK vol.33 n.4 (2017) 45
training, but given the fact that players can earn in excess of €100,000 per week, it is not hard to see why they are keen to return. New rules have been implemented by UEFA relating to head injuries and concussion to try to protect players from further in-jury, as those with a history of concussion are three to six times more likely to sustain an additional con-cussion.3,13 Emerging evidence also indicates repeated head impacts may be associated with changes in the brain structure and with possible neurodegenerative disease.
Chronic traumatic encephalopathy (CTE) is a degen-erative brain disease that has been associated with head trauma. It involves a build-up of an insoluble form of tau protein in the brain, which accumulates in the blood vessels and deep grooves in the brain surface. Symptoms include depression, aggression and disorientation, but the disorder can only be de-finitively diagnosed posthumously.
Soccer players are also at risk of substance abuse or addiction. Major improvements were introduced by UEFA to its anti-doping programme in order to deter and detect the misuse of steroids in football.19
Waddington et al. noted that although up to 45% of players used recreational drugs, only 6% indicated they knew players who used performance-enhancing drugs. Data from UK football associations has shown that the most commonly detected drugs on testing were Class 1A stimulants such as pseudoephedrine and metabolites of cocaine, but the report by Wad-dington suggests that the use of banned substances is considerably higher than official test results would indicate.21
There are a number of factors that contribute to an increased risk of mental health disorders in profes-sional soccer players including sport-related stress. There are 64 professional soccer players documented as having committed suicide although some were retired players or are historical cases, with only 14 active players committing suicide since 2000. A study by Gouttebarge et al. reported a prevalence of mental health issues, ranging from 5% of players with burnout to 26% of current players with anxiety and depression. Major life events such as a divorce, family death or an illness have a significant impact on the mental well-being of players. Interestingly Williams and Roepke (1993) noted a two to five times higher probability of sustaining an injury in athletes with a life event stress.7
UnderwritingProduct offerings usually include group life cover on a death by illness basis only because of the large sum
assured on risk and a potential high claim amount from one group catastrophe. However, sometimes it may be possible to offer smaller covers for all-cause mortality and any occupation total and permanent disability (TPD). Individual insurance cover is usually allowed for all benefits, subject to medical and finan-cial requirements, with the need for cover usually in relation to mortgage protection or inheritance tax planning. One of the main barriers in risk acceptance can be where cover limitations have been established for professional athletes. Case management can also be a problem in establishing risk amounts, as player transfers may happen at any point throughout the year and it can be difficult to monitor changes in cover.
Group underwriting requirements usually include sight of a team medical certificate, along with a medi-cal examination and blood tests, urinalysis, treadmill EKG and an echocardiogram. The UEFA requires a standard 12-lead EKG and an echocardiogram on players under 21 years of age or at the earliest oppor-tunity, and include a treadmill EKG if medical history or new clinical events indicate otherwise. A profes-sional club’s own medical examination program is likely to be even more rigorous than any insurance-led screening, and this can help eliminate risks such as cardiovascular issues or drug use. A player’s contract also often precludes the athlete from partaking in hazardous pursuits. ConclusionsThe primary risks in insuring professional soccer players are:
• Sudden cardiac death.• ALS.• Murder or kidnap.• Group accidents.• Anxiety, depression and suicide.• Substance abuse.• Musculoskeletal injuries.• Concussions and consequences thereof.
Mandatory screening is no guarantee that players are not at risk of sudden cardiac death. Players may also be at risk of ALS and CTE, though neither are likely to impact players during their careers. Those with a history of concussion are twice as likely to sustain an injury and three to six times more likely to sustain an additional concussion. Two-thirds of all injuries sustained are to the lower limbs, with players three times more likely to sustain an injury during match play than in training. Two-thirds of all players return to play within 7 days of injury. Injuries are more likely in players under the age of 25, in higher levels of play and in those who play in a forward position. Those
ON THE RISK vol.33 n.4 (2017)46
with a history of a life stress event are two to five times more likely to suffer an injury. A quarter of all players report symptoms of anxiety and depression, and up to 45% of players report a history of drug use. All-cause mortality from road traffic accidents and ALS is higher in professional players but is lower from cancer and cardiovascular disease. While group catastrophe is a risk in insuring soccer teams, acci-dents are still rare given the amount of global travel undertaken each year. Nationality and residency of the player should be considered when underwriting group or individual benefits. Barriers to acceptance include restrictions in cover on professional athletes as well as case management of player transfers, which can make it difficult to establish the true amount of group cover. So are professional soccer players insur-able? Absolutely, following the right underwriting process and risk assessment. Notes 1. Belli, S. Vanacore, N. (2005), “Proportionate mortality of Italian soc-
cer players: is amyotrophic lateral sclerosis an occupational disease?”, European Journal of Epidemiology 2005; 20(3): 237-42, available from: www.ncbi.nlm.nih.gov/pubmed/15921041 [accessed 24 Jan 2017].
2. BMJ. (2016), “Screening young athletes to prevent sudden cardiac arrest not proven to save lives”, Science Daily, 20 Apr 2016, available from: www.sciencedaily.com/releases/2016/04/160420211128.htm [accessed 26 Jan 2017].
3. Brain Injury Alliance of Oregon (2017), “Sports – Prevention”, avail-able from: www.biaoregon.org/sports.htm [accessed 20 Apr 2017].
4. Chio, A. et al. (2009), “ALS in Italian professional soccer players: the risk is still present and could be soccer-specific”, Amyotrophic Lateral Sclerosis; 10(4): 205-9, available from: www.ncbi.nlm.nih.gov/pubmed/19267274 [accessed 24 Jan 2017].
5. Corrado, D. et al. (2011), “Risk of sports: do we need a pre-participa-tion screening for competitive and leisure athletes?”, European Heart Journal; 32: 934-944, available from: http://eurheartj.oxfordjourn-als.org/content/32/8/934.long [accessed 14 Mar 2016].
6. Deloitte (2017), “Planet Football – Football money league”, Deloitte Football Money League 2017, available from: www.deloitte.com/global/en/pages/consumer-business/articles/deloitte-football-mon-ey-league.html [accessed 25 Apr 2017].
7. Devantier, C. (2012), “Psychological predictors of injury among professional soccer players”, Sport Science Review, ISSN (online) 2069-7244¸available from: www.degruyter.com/view/j/ssr.2011.xx.issue-5-6/v10237-011-0062-3/v10237-011-0062-3.xml [accessed 11 Apr 2017].
8. FIFA (2007), “FIFA Big Count 2006: 270 million people active in football”, FIFA Communications Division, Information Services, 31 May 2007, available from: www.fifa.com/mm/document/fifafacts/bcoff-surv/bigcount.statspackage_7024.pdf [accessed 24 Jan 2017].
9. FIFPro (2016), “2016 FIFPro global employment report”, FIFPro World Players’ Union, available from: www.fifpro.org/news/2016-global-professional-football-players-survey/en/ [accessed 24 Jan 2017].
10. Gouttebarge, V. et al. (2015), “Mortality in international profession-al football (soccer); a descriptive study”, Journal of Sports Medicine and Physical Fitness 2015; 55(11): 176-82, available from: www.ncbi.nlm.nih.gov/pubmed/25289716 [accessed 20 Jan 2017].
11. Hawkins, RD. et al. (2001), “The association football medical research programme: an audit of injuries in professional football”, British Journal of Sports Medicine 2001; 35(1): 43-7, available from: www.ncbi.nlm.nih.gov/pubmed/11157461 [accessed 29 May 2017].
12. Jacob, JA. (2016), “Interassociation task force punts decision on universal ECG screenings for athletes”, Jama, 2016: 316 (1): 19-21, available from: http://jamanetwork.com/journals/jama/article-abstract/2528263 [accessed 7 Jul 2016].
13. Khodaee, M. et al. (2016), “Nine-year study of US high school soccer injuries: data from a national sports injury surveillance programme”, British Journal of Sports Medicine 2017; 51: 185-193, available from: http://bjsm.bmj.com/content/early/2016/12/28/bjsports-2015-095946.info [accessed 23 Jan 2017].
14. Kuss, O. et al. (2011), “Longevity of soccer players: an investigation of all German internationals from 1908 to 2006”, Scandinavian Journal of Medicine & Science in Sports 2011; 21(6): e260-5, available from: www.ncbi.nlm.nih.gov/pubmed/21435018 [accessed 20 Jan 2017].
15. NCAA (2012), “Men’s soccer injuries”, National Center for Cata-strophic Sports Injury Research, available from: www.ncaa.org/sites/default/files/NCAA_M_Soccer_Injuries_WEB.pdf [accessed 24 Jan 2017].
16. Östman-Smith, I. (2011), “Sudden cardiac death in young athletes”, Open Access Journal of Sports Medicine 2011; 2:85-97, available from: www.ncbi.nlm.nih.gov/pmc/articles/PMC3781887/ [accessed 19 Mar 2016].
17. Taioli, E. (2007), “All causes mortality in male professional soccer players”, European Journal of Public Health 2007; 17(6): 600-604, available from: https://academic.oup.com/eurpub/article/17/6/600/475352/All-causes-mortality-in-male-professional-soccer [accessed 11 Apr 2017].
18. UEFA (2009), “Euro 2008 injury study”, Medicine Matters Apr 2009; No.17, available from: www.uefa.org/MultimediaFiles/Download/Publications/uefa/UEFAMedia/81/31/06/813106_DOWNLOAD.pdf [ac-cessed 20 Jan 2017].
19. UEFA (2015), “Protecting the player – the primary objective of football medicine”, Medicine Matters Apr 2015; No.23, available from: www.uefa.org/MultimediaFiles/Download/MedicineMatt/uefaorg/Publications/02/23/37/40/2233740_DOWNLOAD.pdf [accessed 20 Jan 2017].
20. UEFA (2016), “Injury study report”, UEFA Euro 2016 France; Sept 2016, available from: www.uefa.org/MultimediaFiles/Download/uefaorg/Injurystudy/02/43/46/40/2434640_DOWNLOAD.pdf [accessed 20 Jan 2017].
21. Waddington, I. et al. (2005), “Drug use in English professional foot-ball”, British Journal of Sports Medicine 2005; 39(4): e18, available from: http://bjsm.bmj.com/content/39/4/e18 [accessed 29 may 2017].
22. Woods, C. et al. (2004), “The Football Association medical research programme: an audit of injuries in professional football – analysis of hamstring injuries”, British Journal of Sports Medicine 2004; 38: 36-41, available from: http://bjsm.bmj.com/content/38/1/36 [accessed 11 Feb 2017].
About the AuthorHilary Henly is Head of Underwriting (Ireland) and Director of Divisional Underwriting Research, RGA In-ternational Reinsurance Company dac based in Dublin. She is a Fellow of the Chartered Insurance Institute, with more than 20 years of experience in both underwriting and claims.
ON THE RISK vol.33 n.4 (2017) 47
CIU Annual General MeetingJune 3, 4 & 5, 2018
Toronto Marriott Bloor-YorkvilleAGM Program & Registration
Toronto info & much moreSpring of 2018 @: www.ciu.ca
CIU Winter Education SeminarJanuary 22 & 23, 2018
www.ciu.ca
Vantage Venues, Toronto2 Days of Excellent EducationRegistration & Program detailsVisit:
BE THE YOU WANT TO SEE … AND
CHANGEEVOLVE TRANSFORM
COME JOIN US!
ON THE RISK vol.33 n.4 (2017)48
THE UNIQUE CHALLENGES OF UNDERWRITING CHILDREN FOR LIFE INSURANCE
Executive Summary Following the previous two contributions on children’s brain disorders by Dr. Regina Rosace (see OTR June and September 2017 issues), this article examines further medical risk selection challenges when underwriting chil-dren, including the moral hazards and associated financial underwriting conundrum. Underwrit-ing children is not a task for the faint-hearted underwriter, given that underage applicants are financially fully dependent on their parents, have little track record about their own health, and very few underwriting clues if they present an added risk to the insurance company.
Philippe AusselDirector, UnderwritingSCOR Global Life (Canada)Montréal, [email protected]
IntroductionBroker World magazine’s contributor Robert Gold-stone summarizes in the August 2015 edition the challenges of underwriting children as one of the most difficult underwriter’s assignments. He wrote: “Besides the obvious task of determining the insur-able interest on individuals with no employment, no immediate financial need, little track record on health and few clues on the medical end, most underwriters have the least experience working on this age group. It is also the lowest risk reward for a company – smallest premium relative to policy face amount – so it raises caution flags at each step in the process.”1
Moreover, as Patrick D. Snow writes: “The relatively low amounts of coverage and relatively low death rates make it difficult to justify the same level of underwriting requirements as customarily obtained with adult application.”2
Most juvenile deaths occur during the first months from acute complications of the pregnancy or the delivery, severe congenital disorders and marked prematurity. Recent changes in the recommended sleeping position for infants has greatly reduced the risk for sudden infant death syndrome3. There are still almost twice as many deaths in the first year of life as there are in the next 13 years combined. Overall, unintentional injuries are the leading causes of death4 after the first year of life as shown in the table below.
Brief considerations, listed in alphabetical order, of selected medical disorders affecting children’s under-writing are examined. Moral hazards and financial underwriting in the context of children’s applications are discussed thereafter before the conclusion.
Accidental DeathUnintentional fatalities are the leading cause of death for children after age 1. About 50% are caused by motor vehicle accidents, mostly because safety restraints have not been correctly in place, followed by drowning, poisoning, burns and suffocations. For infants and toddlers, most injuries occur at home. At adolescence, cultural and environmental (accidents,
ON THE RISK vol.33 n.4 (2017) 49
homicide, suicide) rather than organic factors are the main risk factors of premature deaths.
AsthmaAsthma is the most common chronic disease of childhood in industrialized countries. Most asthma episodes are successfully managed in the community or at home. However, status asthmaticus is a life-threatening stage of the disease requiring immediate emergency treatment. Admission into a hospital is usually not required if the asthma can be broken in the ER.
BronchiolitisBronchiolitis is a disease of the small bronchioles caused by viral infection of the lower respiratory tract with increased mucus production and occasional bronchospasm, which can lead to airway obstruction. It is a major cause of infant hospitalization. The illness most typically presents as benign cold symptoms. In very young infants and in former premature infants, it can present simply as apnea, which precedes the common runny nose and cough symptoms, in this population. In rare cases, treatment-resistant apnea, tachypnea and hypoxia may progress to respiratory failure from the damage to the bronchioles and tiring, secondary to the increased respiratory rates. While most cases will resolve completely, very infrequently, minor abnormalities of pulmonary function and bronchial hyperactivity may persist. Immunologic evidence shows that all children by the age of 3 years have evidence of exposure to the viruses that cause bronchiolitis.
Bronchopulmonary Dysplasia (BPD) Bronchopulmonary dysplasia is a chronic lung disease that develops in some newborns who have received respiratory support. Generally, low birth weight and longer duration of ventilation are impor-tant predictors for the development of chronic lung diseases in early childhood. Sequels and complica-tions may persist and cause higher susceptibility to reactive airway disease and obstruction. However, with the evolution and widespread use of surfactant5 in premature infants, the likelihood of seeing BPD has reduced greatly over the recent years.
CancersOverall, childhood cancer is rare, but is one of the main leading causes of children’s death between the ages of 5 and 14 years. Leukemia and lymphoma are the most common type of childhood cancer, followed by brain, CNS tumors and sarcomas. The overall survival rate has improved considerably with major advancement in combined modality therapies. Late effects of juvenile cancer treatment is one of the pri-
mary underwriting concerns, given that survivors will later present with a multitude of secondary health issues. The most common solid second malignan-cies are breast, thyroid tumors and gastrointestinal cancers.
Cystic Fibrosis (CF)Many infants are diagnosed based on newborn screening. Young children presenting symptoms of failure to thrive, cholestatic jaundice, chronic respiratory symptoms or electrolytes abnormalities are habitually evaluated for possible cystic fibrosis. Older undiagnosed children commonly present with a pulmonary manifestation such as poor or refrac-tory asthma and chronic respiratory infections. The median age of survival is currently up to the mid-30s.
Diabetes MellitusType 1 diabetes is the most common type of diabetes mellitus in children and adolescents. Furthermore, Type 2 diabetes is almost as common in children as the insulin-dependent Type 1. Childhood-onset diabetes carries a significant enduring disease bur-den. The long-term prognosis and life expectancy of children with Type 1 diabetes have tremendously improved over the previous decades, primarily due to improved education, stricter blood glucose control and advances in biotechnologies.
Failure to Thrive (FTT)When the child’s weight falls or remains below the 10th percentile, then failure to thrive should be considered. Recurrent infections exacerbate the malnutrition, which loops into a higher susceptibility to more infec-tions, perpetuating the cycle. Children who failed to thrive in infancy tend to have more cognitive issues, adverse intellectual outcomes and go on to have difficulties in adulthood, such as social problems, difficulties holding a job, interpersonal relationship issues and conduct disorders.
Growth and Development Growth typically refers to the increase in physical size following a predetermined trajectory (refer to CDC development chart6), while development is an increase in function of body and mind processes (refer to Denver II chart7). Developmental context and the environment in which children and adolescents grow up play a crucial role in their upbringing and well-be-ing. Their environments provide access to resources, relationships and supports, in addition to settings for learning, growth and development. Adverse experi-ences in childhood are linked to significant lifelong health or behavioral problems, lower quality of life and premature deaths. Mild developmental delays often go unnoticed until the child is of school age.
ON THE RISK vol.33 n.4 (2017)50
For children with speech-language difficulties, enroll-ment in therapy at an early age tends to have better outcomes than when therapy was initiated later.
Heart Diseases The spectrum of congenital heart defects ranges from asymptomatic to fatal. They are divided into two categories:
• Acyanotic congenital heart diseases are left-to-right shunts (patent ductus arteriosus, atrial or ventricular septum defects) and obstructive or stenotic lesions (aortic stenosis, pulmonary stenosis, coarctation of aorta).
• Cyanotic congenital heart diseases include right-to-left shunts causing some of the systemic venous blood returns to the body without going through the lungs for deoxygenation, most com-monly known as the five T’s: tetralogy of Fallot, transposition of great vessels, tricuspid atresia, truncus arteriosus, and total anomalous pulmo-nary venous return.
The presence of a heart murmur can be significant; however, 90% of all children at some point in their lives will have a heart murmur in all likelihood dur-ing an acute illness. Most of these will turn out to be benign flow murmurs.
Juvenile Idiopathic Arthritis (JIA)JIA is the most common chronic rheumatologic dis-ease of childhood. Girls are generally more affected than boys. The immediate complications are primar-ily from the loss of function of the involved joints. Prognosis is excellent with an overall 85% complete remission rate. Oligoarticular JIA tends to do much better than polyarticular disease. Poorer prognosis is hallmarked by systemic onset, positive rheumato-logical factor, poor response to treatment and early articular erosions.
Mood and Major Depressive Disorders (MDD)Mood swings are common in adolescents with gen-erally atypical onset of symptoms. A sudden drop in school grades is often present. Childhood onset has an unfavorable prognosis and is likely to lead to school and social difficulties with poor employment track record, particularly when the child or adoles-cent is from an underserved, low socio-economic background. Adolescents’ depressive disorders will tend to recur into adulthood.
MDD increases the risk for suicide, substance use and other psychiatric disorders, but milder symptoms of short duration in response to stressful life events may be more consistent with a diagnosis of adjust-ment disorders.
The onset of bipolar disorders is rare before puberty. However, subtle symptoms often begin to develop early which may initially be diagnosed as ADHD. The symptoms invariably create significant interference with academic learning and peer relationships. The poor judgement associated with a manic episode can lead to dangerous, impulsive, sometimes criminal activities. In adolescents, suicides surpass road ac-cident deaths, and the highest prevalence is among high school students.
ObesityOverweight and obese children have become preva-lent in North America. The main cause of youths’ obe-sity is environmental (sedentary, quality of nutrition, excessive caloric intake, urban or suburban living). The most common short-term morbidities for over-weight and obese adolescents are psychosocial, e.g., social marginalization, poor self-esteem, depression and overall poor quality of life. The physical and psy-chological comorbidities often carry into adulthood, whereby the long-term disease burden accelerates the incidence of significant cardiovascular disease and cancers at increasingly earlier ages. Increased mortality begins as early as the 5th decade of life and is strongly associated with other metabolic disorders.
Prematurity Early preterm newborns require highly specialized neonatal care. Prognosis depends on body weight, gestational age and complications. Premature infants are facing a variety of physiological handicaps, but with today’s advances in obstetric and maternal care, survival of infants born after the 28th week of gesta-tion or a birth weight as little as 1,000 gr (or just shy of 2.5 pounds) is above the 90% rate. However, these high rates of survival come with increased likelihood for morbidity due to cerebral palsy, cognitive delays, hydrocephalus and ultimately early mortality.
Even late preterm infants have a higher prevalence of acute neonatal problems with rehospitalization, jaun-dice, infections and failure to thrive more common than in term newborns. There is generally a higher incidence of cerebral palsy, development delays, and behavioral and emotional disorders compared to term infants.
Respiratory Distress Syndrome (RDS)Respiratory disease is the most common cause of mortality in premature infants. The incidence of RDS increases with decreasing gestational age, specifi-cally for infants born under 30 weeks of gestation. RDS may occur in the delivery room after the onset of breathing for very preterm infants (week 24 to 30 of gestation). It is associated with an insufficiency
ON THE RISK vol.33 n.4 (2017) 51
of pulmonary surfactant and results in cyanosis and tachypnea. Some more mature newborns (34 weeks of gestation) may only show RDS 3 to 4 hours after birth. Complications include pulmonary air leaks (pneumothorax) and bronchopulmonary dysplasia causing chronic lung disease, whereby PDA (patent ductus arteriosus) is a comorbidity of RDS.
Sleep ApneaThe peak prevalence of obstructive sleep apnea (OSA) is between the ages of 2 and 8 years, and is primarily caused by an upper airway obstruction during sleep. Adenotonsillar hypertrophy is the most common cause in young children, whereby other risk factors include obesity and, rarely, craniofacial malforma-tion, glossoptosis and neuromuscular diseases.
Moral Hazard and Financial Underwriting Concerns Typically, insurance is purchased in anticipation of future needs or to protect against the prospective insurability of the child. Applications on impaired children should raise concerns for a potential moral hazard.
Children’s insurance needs should be critically as-sessed in the context of the parents’ financial situa-tion. When juveniles are beneficiaries of very large estates and with proper estate conservation strategies in place on previous generations, or when the parents or grandparents have become medically uninsurable, larger insurance amounts may be allowed on a case- by-case basis. However, all children in the same fam-ily should be insured for either the same amount of premium or the same level of face amount to mitigate the potential for anti-selection.
The market for children’s coverage is evolving to more sophistication and the current trend is advancing into three distinct focused categories, as seen below:
ON THE RISK vol.33 n.4 (2017)52
ConclusionOver time, new technologies have steadily improved the early life of newborns. With improved prenatal and postnatal care, a greater percentage of premature newborns can survive, though potentially increasing the number of children with chronic medical condi-tions and developmental delays. On the other hand, medical impairments, previously only seen in adults, are being diagnosed during adolescence and are car-rying a significant disease burden in adulthood.
For the outsider, life insurance for juvenile applicants is a simple contract. However, the lack of overall mortality data or underwriting studies, combined with limited medical history specifically for healthy
About the AuthorPhilippe Aussel has 40 years of facultative reinsurance underwriting experience and has worked for SCOR Global Life since 2003, having started at Munich RE in 1977. ON THE RISK published articles by Philippe on “Essentials of Financial Statement Analysis and Business Valuation” in September 2012, “Advanced Life Insurance Concepts at a Glance for Underwriters from a Canadian Perspective” in September 2013, “Essen-tials of Canadian Taxation in the Life Insurance Underwriting Framework” in March 2015, and “The Drivers of Future Mortality: An Underwriter’s Perspective” in September 2015. Philippe holds an insurance degree from the German Insurance Academy (Deutsche Versicherungsakademie) and in 1996 wrote his final study paper on “Financial Statement Analysis for the Non-Professional Reader.”
For further reading Cooper, Steven, in Pediatric issues in underwriting, J Insur Med 2005;37:129-135.CURRENT Diagnosis and treatment: Pediatrics, 23rd edition. Nelson’s Essentials of Pediatrics, K. J. Mardante, R. M. Klingman, 7th edition.Ringland, Kristin, Underwriting juveniles for large cases, SCORviews, September 2015.Rosace, Regina, MD, FAAFP, Preterm delivery case study, SCOR’s Housecalls, June 2016.Snow, Patrick D, Underwriting younger ages: Pediatric mortality risk evaluation, Brackenridge’s Medical Selection of Risk, 5th edition.
children, minimum underwriting evidence, unique causes of death and the opportunities for anti-se-lection, make the underwriting of children uniquely challenging. Insuring medically impaired pediatric applicants will remain a case-by-case decision and within each insurance carrier’s own risk appetite.
Notes1. www.brokerworldmag.com/upload_article_pdf/3809.pdf.2. Brackenridge's Medical Selection of Life Risks, 5th version, Chapter 8.3. www.ncbi.nlm.nih.gov/pmc/articles/PMC3268262/.4. https://medlineplus.gov/ency/article/001915.htm.5. www.cps.ca/documents/position/neonatal-surfactant-therpy.6. www.cdc.gov/healthyweight/assessing/bmi/childrens_bmi/about_
childrens_bmi.html.7. http://drhart.net/clinic/forms/Denver%2011%20Development%20
Milestones.pdf.
From the September 2017 Annual Meeting of the Academy of Life Underwriting in Seattle, WA - members of the ALU Execu-tive Group (left to right): seated - Norm Leblond, Swiss Re, AHOU representive; Jennifer Johnson, RGA Reinsurance, Presi-dent ALU; Frank Goetz, Pacific Life, Past President ALU; standing - Jodie Hofmaier, United of Omaha, Director of Meetings; Jean Everhart, Woodmen Life, ALU Trea-surer; Tanya Trachenko, Wawanesa Life, ALU Secretary; Donna Daniels, AXA, OTR representative; Selena Puttick, Manulife, CIU representative.
ON THE RISK vol.33 n.4 (2017)54
INVESTIGATING LIFE INSURANCE FRAUD AND ABUSE:UNCOVERING THE CHALLENGES FACING INSURERS
Executive Summary From criminal activity to misrepresentations and omissions, fraud costs the life insurance industry billions of dollars each year. The impact extends beyond quantifiable costs such as paying inappropriate claims and the expense of establishing fraud prevention and detection units. It also includes the opportunity cost to insurers from stifled innovation and lower sales due to higher premiums. RGA engaged insurers through conversations and survey analysis to better understand the impact of fraud within the life insurance industry. Dedicated fraud prevention teams using supplemental data can limit fraudulent claims and reduce rescission rates. Yet many life companies agree that the life insurance industry is falling behind in develop-ing tools to combat fraud. Advancements will require using data to create tools and models that detect fraud and, in turn, improve the trust and transparency between all parties involved in the insurance transaction.
Fraud costs the insurance industry billions of dollars every year. The Coalition Against Insurance Fraud estimates that US insurers lose $80 billion annu-ally to fraud, across all lines of business.1 However, the true cost of fraud is not quantifiable – it extends beyond payment of inappropriate claims and costs to establish fraud prevention and detection units; fraud stifles innovation and fraud costs consumers money and convenience.
To better understand the challenges fraud presents, RGA has reached out to life insurers. We surveyed insurance companies2, conducted informational in-terviews, held discussions at the 2016 RGA Annual Fraud Conference3, and conducted our own internal research of claims experience. TypesAn important first step in understanding fraud is to define it. In this analysis, we are using a broad defini-tion. Fraud in this context is not limited to criminal activity, but is expanded to include misrepresenta-tions and omissions, whether malicious or less than complete disclosure.
We discussed the types of fraud with insurers and the associated costs and challenges in detection. Al-though there was a wide range in responses, medical misrepresentation, agent fraud and criminal fraud were identified as the most concerning types of fraud. Paramed fraud and rebating were identified as the most difficult types of fraud to detect.
Survey respondents were asked to rate their level of concern, difficulty to detect and cost to detect various types of fraud on a scale from 1 to 5, with 5 repre-senting a high level (See Graph 1, next page). While insurers indicated the highest level of concern with medical misrepresentation, agent fraud and criminal fraud, there was considerable variation in responses (See Graph 2, next page).
Julianne Callaway, FSAStrategic Research ActuaryRGA Reinsurance Company
Chesterfield, [email protected]
Mark S. Dion, FALU, FLMIVP, Strategic Underwriting
Innovation RGA Reinsurance Company
Chesterfield, [email protected]
Leigh AllenDirector, Global Surveys & Distribution ResearchRGA International Corp.
Toronto, [email protected]
Nicholas KocisakActuarial Assistant
RGA Reinsurance CompanyChesterfield, MO
ON THE RISK vol.33 n.4 (2017) 55
Graph 1
Graph 2
ON THE RISK vol.33 n.4 (2017)56
Fraud Prevention and DetectionInsurers have practices in place to detect and limit the impact of fraud, often with dedicated teams in place that take advantage of fraud prevention tools and technological advances. TeamLife insurers tend to have small special investiga-tion units in addition to underwriters and claims staff dedicated to fraud prevention and detection. However, there is significant variation in the size and sophistication of these internal investigation units. The most common response from insurers we sur-veyed was to have a single person dedicated to fraud investigation and prevention (See Graph 3).
Graph 3
Q. Does your company have designated in-dividuals to investigate and prevent fraud?“We have individuals who investigate...this is often only a portion of what they do - not a full-time activity.”“We use a multi-tiered approach to investiga-tions.”“We have less than a handful of people in our Special Investigation Unit.”
ON THE RISK vol.33 n.4 (2017) 57
ToolsUsage of tools varies; however, many insurers in-dicated interest in new tools to combat fraud (See Graph 4).
Q. Is the life insurance inustry keeping pace with tools to combat fraud? How can this be improved?“No. There is a need for an industry database for suspected and proven fraud claims within the life insurance industry similar to the ISO database that exists with the P&C world.”“No. We need more tools to help us combat fraud on the front end before case is ever issued.”“For the most part - yes. But improvemnets are needed as we move to more simplified and non-verifiable processes.”“We need more cooperation with insurance de-partments.”“We are always looking for better tools...there are red flags periodically on the applications, but there are not a lot of tools to help with detection.”
Graph 4
ON THE RISK vol.33 n.4 (2017)58
TechnologyTechnology has enabled companies to leverage data and build predictive models. Companies generally do not have an algorithm in place to identify and flag questionable claims; however, many have plans to implement a program.
We asked insurers, on a scale of 1 to 5, how interested would you be in using modeling to detect fraudulent claims? (1= not interested through 5= very interested)
CostsWe asked attendees at the 2016 RGA Fraud Confer-ence the question, “How much do you think fraud costs the life insurance industry?” The majority of attendees estimated that fraud costs the life insurance industry $10-20 billion each year. To better under-stand the cost of fraud to the industry, we investigated inappropriate claim payments, costs associated with
fraud prevention and detection, as well as opportunity costs created by the potential of fraud.
Claims The Insurance Information Institute estimates that 10% of all claims paid by property and casualty (P&C)
insurers are fraudulent.4 In our survey of life insurance companies, respondents indicated that approximately 1-3% of claims are investigated for fraud or mis-representation or denied.
The contestability period, the time in which an insurer can deny a claim for material misrepresentation and fraud, varies by state, but is gener-ally 1 to 2 years. Based on internal RGA claims experience, during the contestability period, roughly 20%
of life insurance claims are rescinded. The rate is higher for simplified issue policies and those issued to younger insureds.5
Rescissions erode consumer confidence in the in-tegrity of insurance companies. At the same time, payment of inappropriate claims made after the con-testability period creates excessive losses for insurers, which can be considered a “fraud premium” paid by consumers. It is clear that insurance fraud is harmful to consumers as well as insurers.
Investigation, Prevention, Detection
Level of Interest in Modeling to Detect Fraudulent Claims
Min Average Max Mode1.0 3.6 5.0 4.0
Q. Are there any underwriting red flags your company would like to consider but lack data to investigate?“New immigrants - visa verification.” “All kinds of fraud - faked death claims, gaming the two-year contestability period, etc.”“Yes, to make up for a lack of boots on the ground for investigations.”“It would be helpful to be able to prove fraudulent activity.”“Current tools to investigate criminal history are inadequate.”
“We know from our protective value studies our processes and tools provide greater benefit than cost.”
Fraud costs the insurance industry billions of dollars each year, and prevention provides protective value to insurers. MIB states that its checking service saves the industry $1 billion per year from errors, omissions,
ON THE RISK vol.33 n.4 (2017) 59
misrepresentations and potential fraud.6 When asked to estimate the amount of money their company has saved using fraud detection and prevention for life insurance business, all insurers reported a savings relative to spending, though there was a wide range in responses. The minimum ratio of savings to spending was 3:1 and the highest was 100:1. The overall aver-age was just over $30 saved for every dollar spent on prevention and detection.
Opportunity CostThe risk of fraud limits insurers’ ability to innovate, resulting in an opportunity cost to the industry.
The insurer survey asked companies if the threat of fraud limited the number of simplified issue policies and/or the face amounts they were willing to issue. Of the companies offering simplified issue products, 87.5% said they limit the face amount on these prod-ucts, and all reported some level of concern with products that have less underwriting scrutiny.
OutlookWe asked Fraud Conference attendees, “What in-novations in fraud detection or prevention for life insurance do you see in the next 5 years?”
While data and analytics were top of mind for many attendees, our survey respondents indicated that 90% do not currently use algorithms to flag questionable claims or other modeling methods. However, most of the respondents also indicated that they are inter-ested in using modeling to predict fraudulent claims.
“We have very strict guidelines for simplified issue which limits our exposure.”“Simplified underwriting brings fewer under-writing tools that may uncover fraud.”“We do limit the face amount.”
Q. What innovations in fraud detection or prevention for life insurance do you see in the next 5 years?“More modeling, data use.”“Advancements in using analytics, in particular for the new business fraud detection.”“Needs to be easy and quick.”“Big data analytics.”“There are areas of fraud that will occur that we haven’t and can’t even think of. By the time we figure it out it’s potentially too late.”
There are many challenges to creating a solution to reduce the incidence of life in-surance fraud. Most solutions will require data usage, but insurers may have privacy and security concerns regarding the use of this data outside of its traditional uses. Additionally, insurance data is often tech-nically difficult to obtain from fragmented internal administration systems. Fraud, including fraud that is unknown to and undetected by insurers, is a costly and challenging problem facing the industry. Insurance innovations that focus on data
solutions may indirectly result in a lower incidence of fraud. The motivation for these advancements is more likely to stem from the development of fluidless underwriting solutions, improved tools to serve cus-tomers or improved online distribution capabilities.
ON THE RISK vol.33 n.4 (2017)60
The solution to the problem of fraud lies in creat-ing tools, using data, and developing products that enhance trust and transparency among all parties involved in the insurance transaction.
Notes1.Coalition Against Insurance Fraud,www.insurancefraud.org/statistics.
htm#1.2. RGA surveyed 13 insurance companies and analyzed responses from
the person most responsible for fraud detection and/or risk manage-ment at each company.
3. Discussions with the 130 attendees at the 2016 RGA Fraud Conference helped to inform the content in this white paper.
4. Insurance Information Institute, March 2015.5. Based on RGA claims experience.6. www.mib.com/facts_about_mib.html.
About the AuthorsJulianne Callaway, FSA, ACAS, MAAA, as a Strategic Research Actuary for RGA’s Global Research and Data Analytics (GRDA) team, researches emerging areas of interest to the insurance industry. Her insights on wellness, wearable technology, genetics and other strategic research initiatives are shared with clients in presentations, white papers and articles. Julianne joined RGA in 2013 as an Assistant Actuary in GRDA, where she oversaw research development for the department. Later she was part of RGAx, the wholly-owned innovation incubator subsidiary of Reinsurance Group of America, Incorporated, for 2 years where she de-veloped economic models for business concepts and market intelligence in support of innovative business initiatives. Julianne has BS and MA degrees in Economics from the University of Missouri–Columbia. She is a Fellow in the Society of Actuaries (FSA), an Associate in the Casualty Actuarial Society (ACAS) and Member of the American Academy of Actuaries (MAAA). Mark S. Dion, FALU, FLMI, is Vice President, Strategic Underwriting Innovation for US Facultative, at RGA Reinsurance Company. He is a subject matter expert regarding RGA’s underwriting innovations, facultative risk management in the US division, new underwriter training, critical thinking, underwriting manual creation, underwriting activities for simplified-issue and bancassurance products, and automated underwriting rules development. Mark has a BA in Biology and a Philosophy co-major from Creighton University in Omaha, NE. He is a Fellow of the Academy of Life Underwriting (FALU) and a Fellow of the Life Management Institute (FLMI). He is a member and a past subcommittee chair of the Society of Actuaries Life Insurance Mortality and Underwriting Survey Committee, a past member of the Association of Home Office Underwriters (AHOU) Program Committee, and an associate member of the Association of Certified Fraud Examiners.
Leigh Allen, Director, Global Surveys and Distribution Research, is responsible for research on topics related to insurance product development and distribution in support of RGA markets around the world. Working closely with RGA Managing Directors and local resources, she conducts and manages research projects to strategically enhance RGA client relationships and leverage RGA’s core expertises. She contributes to research related to bancassurance, group life, products, targeting market segments, underwriting, fraud and in-force management. A prolific author, Leigh has written and published several articles and white papers on a broad range of insurance topics. Leigh received a MSc degree from the London School of Economics and Political Science (UK), a Post-Graduate Certificate in Human Resource Management (CHRM) from Humber College (Canada) and an Hons BA from the University of Western Ontario (Canada). Nicholas Kocisak is an Actuarial Assistant on the New Data Initiatives Team within RGA’s Global Research and Data Analytics department. His role is to analyze new sources of data and assess their potential uses, as well as create internal tools that assist in achieving business goals. He joined the company in 2017. Nicholas received a BS in Business Administration with a major in Actuarial Science from Drake University.
ON THE RISK vol.33 n.4 (2017) 61
2018 MidwesternMedical DirectorsAssociationAnnual Meeting
May 10-11, 2018RGA Global Headquarters16600 Swingley Ridge Road, Chesterfield, MO 63017
A partnership between
Thursday, May 10, 20186:30 p.m.Cocktail Reception and Dinner
Friday, May 11, 20187:45 – 8:00 a.m.Welcoming Remarks
8:00 – 9:00 a.m.Risk Prognostication in InflammatoryBowel DiseaseMatthew Ciorba, MD, Associate Professor,Department of Medicine, Division ofGastroenterology, Washington UniversitySchool of Medicine
9:00 – 10:00 a.m.The Latest in Minimally InvasiveCardiac SurgeryAlan Zajarias, MD, Assistant Professor ofMedicine, Division of Cardiovascular Services,Washington University School of Medicine
10:15 – 11:15 a.m.Predicting Lifespan and AlternativeTrajectories of AgingZachary Pincus, PhD, Assistant Professor ofMedicine, Developmental Biology, WashingtonUniversity School of Medicine
11:15 a.m. – 12:15 p.m.The Pediatric BrainRegina Rosace, MD, Medical Director, SCOR
12:15 – 1:30 p.m.Lunch and Business MeetingRGA Headquarters
1:30 – 2:30 p.m.Updates in Myeloproliferative NeoplasmsStephen Oh, MD, PhD, Assistant Professor,Department of Medicine, Hematology Division,Washington University School of Medicine
2:30 – 3:30 p.m.Insurance Medicine Lessons from anInternational PerspectiveDan Zimmerman, MD, DBIM, VP & MedicalDirector, RGA
3:45 – 5:00 p.m.“The Speaker’s Corner” − Current Topics in Insurance MedicineAn open forum discussion of current andfuture issues pertinent to insurance medicine,risk assessment and Medical DirectorsModerator: Dave Rengachary, MD,Chief Medical Director, RGA
5:00 p.m.Final Comments & Adjournment
6:30 – 9:30 p.m.Tour and Dinner at Anheuser-Busch Brewery
ON THE RISK vol.33 n.4 (2017)62
IS PHYSICAL ACTIVITY THE STRONGEST PREDICTOR OF ALL-CAUSE MORTALITY AND MORBIDITY?
Executive Summary This paper uses the findings of available research studies to correlate physical activity with mortality and morbidity. Studies reveal that physical activity is a strong and in-dependent predictor of all-cause mortality and morbidity. Furthermore, the findings indicate that high-intensity interval training (HIIT) is better than moderate-intensity continuous train-ing (MICT) in improving health and wellness, as well as in preventing premature death. There are several ways of measuring cardiorespiratory capacity, such as the maximal and submaximal stress test as well as the NET-F method, but insurance companies have developed their own measurement methods. In conclusion, this paper advocates for the use of physical activity in the pricing of mortality and morbidity risks and in the underwriting process.
IntroductionIt is widely recognized that physical activity (PA) is inversely associated with chronic disease as well as overall mortality. Experts in the fields of science and medicine have determined that more exercise results in risk reductions in more than 25 diseases, leading to conclude that PA is good for one’s health. Metabolic equivalent of task, simply known as MET, is an index of activity intensity and is probably the gold standard in measuring cardiovascular capacity. On the other hand, muscular strength and endurance are also very important. The World Health Organization and the Physical Activity Guidelines for America recommend that adults engage in at least 150 minutes per week of moderate-intensity exercise or 75 minutes per week of vigorous-intensity exercise.1,2 However, it remains unclear whether intensity, duration or type of physi-cal activity (cardiovascular vs. muscular activity) can benefit health the most. Nonetheless, it is likely to play a bigger role in pricing risks and underwriting in the coming years as the industry finds new ways to improve underwriting effectiveness by incorporat-ing factors that have a real impact on mortality and morbidity. The goals of this article are to establish a clear and objective relationship between physical activity and mortality-morbidity using prior scientific research studies, as well as to propose a method of measuring physical activity for use in risk manage-ment.
Cardiorespiratory Fitness and MortalityWhile PA is known to have a beneficial effect on mortality, the lack of it is also known to contribute
to disease development which eventually causes premature death. For example, scientific evidence shows that every 1 MET increase in physical capac-ity results in a 15% reduction in all-cause mortality.3 Moreover, in patients with coronary artery disease (CAD), the level of cardiorespiratory fitness seems to be the greatest predictive factor for cardiac mortality.
Numerous other research studies also correlate cardiorespiratory fitness (CRF) with all-cause mortality:One study conducted on healthy men and women using a sample of 102,980 individuals followed from
Marcel PadillaTeam Lead, Brokerage Underwriting
iA Financial GroupQuebec City, QC
Raphaël Roy-BrunelleRisk Management Specialist
iA Financial GroupQuebec City, QC
ON THE RISK vol.33 n.4 (2017) 63
1966 to 2008 categorized the study participants into three groups based on their CRF level: low CRF (MET of less than 7.9), intermediate CRF (MET between 7.9 and 10.8) and high CRF (more than 10.8 MET). The results are enlightening: there is a relative risk (RR) for all-cause mortality of 1.56 for individuals with low vs. intermediate CRF, and an RR of 1.70 for individuals with low vs. high CRF.4
In another study involving 5,278 participants aged 65 years or older, it was found that the hazard ratio (HR) of the light, moderate and high PA groups com-pared to the sedentary groups were 0.64, 0.61 and 0.48, respectively. While the resulting lower HR for higher PA groups is expected, it is worthwhile to note the significant improvement in mortality hazard just by moving from the sedentary PA group to light PA group among older people.5
Yet another study demonstrated that low PA is a strong and independent predictor of both cardiovas-cular and all-cause mortality in men. This study ac-cumulated 258,781 man-years of follow-up, and men were categorized as normal weight, overweight and obese based on their body mass index (BMI). It was found that across all three build categories, low PA is comparable, sometimes even greater in importance compared to diabetes mellitus and other cardiovas-cular risk factors in predicting all-cause mortality.6
In a separate study among 11,335 women between 1970 and 2005, participants were classified as either low-fit, moderate-fit or high-fit based on CRF. The low-fit group of women was assigned a 1.0 hazard ra-tio (HR) and the study revealed that the moderate-fit group had a 0.60 HR, while high-fit women had a 0.54 HR. The study concluded that not only is low CRF a significant and independent predictor of all-cause mortality in women, but just becoming moderately fit from less fit results in a significant decrease in mortality risk.7
Another study exclusively for 9,777 men demon-strated that for every marginal increase in cardio-vascular capacity (MET), represented in the study with each minute increase in maximal treadmill time between examinations, there was a corresponding 7.9% decrease in risk of mortality. Therefore, men who maintained or improved adequate physical fit-ness were less likely to die from all causes and from cardiovascular disease than persistently unfit men.8
The following three tables drawn from other meta-analyses summarize and compare various forms of physical activity, intensity levels and activity duration with respect to their effect on mortality rates.9
Table 1: RRs of all-cause mortality for 60, 150 and 300 min/week of PA compared with intensity
The amount of PA for the lowest activity category (reference) was 11 min/week.
Table 2: Modifying effects of physical activity on risk for all-cause mortality
ON THE RISK vol.33 n.4 (2017)64
Based on the above studies, we can draw the following conclusions regarding PA and mortality:
• PA is a strong and independent predictor of car-diovascular and all-cause mortality.
• The intensity of PA plays an important role in determining relative risk: the more vigorous the PA, the lower the mortality risk. Research find-ings consistently showed a negative correlation between fitness level and relative mortality risk.
• There is a significant mortality improvement just by moving from the sedentary group to the mild PA group. These findings have profound implications for both clinicians and insurance underwriters.
• Finally, it is widely known that the traditional risk factors of lipids, build, blood pressure and family history are altogether considered in determining premiums for preferred underwriting classes. According to the findings mentioned above, the use of PA alone in determining preferred under-writing classes seems to have at least the same, if not a better, association with mortality than the combined use of the traditional risk factors.
Cardiorespiratory Fitness and MorbidityInactivitySedentary time is not only associated with cardiovas-cular and cancer mortality, but is also highly corre-lated with the incidence of cardiovascular disease and cancer (morbidity). Fewer than 8 hours of sitting time per day has 14% lower risk for potentially prevent-able hospitalization (HR: 0.86)1. In contrast, if one just does small changes in sitting behavior, studies found an improvement of HDL-cholesterol, triglyc-erides, glucose and BMI.10 In a study that compared adherence to guidelines for PA and diet with cancer incidence, the study participants belonging to the “high adherence” group showed a decrease of 10% to 61% overall cancer incidence and mortality, especially for breast, endometrial and colorectal cancer.11 This means that even little changes in habits can have big changes on health and wellness. Table 4 highlights the various effects of high sedentary time on mortal-ity and morbidity.1
Table 3: RRs of all-cause mortality associated with an increment of 2,4 and 7 MET-hours in total PA per day
The level for the lowest activity category (reference) was 27.3 MET-hours/day, and 24 MET-hours corresponds to sitting quietly for 24 hours.Example: If a person does a 4 MET activity for 30 minutes, he or she has done 4 x 30 = 120 MET-minutes (or 2.0 MET-hours).
Table 4: Association between high sendentary time health outcome
ON THE RISK vol.33 n.4 (2017) 65
Physical Activity: Intensity vs. VolumeAs previously mentioned, increased volume of PA gradually decreases mortality risk. However, does “quality” of PA make a difference in one’s health? Low doses of vigorous-intensity PA seem to be extremely efficient at reducing the risk for adverse cardiovascular events.12 But studies do show that high-intensity interval training (HIIT) is more ben-eficial than moderate-intensity continuous training (MICT) on symptomatic and non-symptomatic indi-viduals with respect to improving cardiorespiratory fitness (measured by VO2peak or MET) and overall myocardial function. This finding affirms that HIIT is more effective in the prevention and management of cardiovascular disease (CVD), including coronary artery disease (CAD), heart failure, stroke and hy-pertension compared to MICT.13 In a meta-analysis conducted on vascular function, researchers found that compared to MICT, HIIT resulted in a significant decrease of diastolic blood pressure and a significant improvement in flow-mediated dilation (reflecting the quality of vascular endothelial function).14
We already know that exercise can improve mus-cular insulin sensitivity, but one interesting study highlighted the difference between HIIT and MICT in this respect. Of the 66 individuals who underwent 16 weeks of training, eight were no longer diagnosed with metabolic syndrome. Of these eight individu-als, seven were from the HIIT group.15 To further support the assertion that exercise improves insulin sensitivity, a separate study sample of individuals having diabetes mellitus showed that the HIIT group demonstrated better glucose control, and this without increasing the risk of hypoglycemia.16
While various research evidence supports HIIT as having more health benefits than does MICT,13 some studies found that cardiac dysfunction and atrial fibrillation risk were associated with very prolonged vigorous exercise. Despite this finding, mortality risk did not seem to increase.12 Other unfavorable health effects that were found to be associated with intense endurance exercise were mild bronchial epithelial cells injury and inflammation of the airways.17
Our research did not include scientific literature to determine if there are differences between HIIT or MICT and their effect on various other medical condi-tions. But there is clear evidence from many research studies that PA generally improves the following conditions and biomarkers: osteoporosis (principally through strength training), COPD, mood disorders, lipids, hypertension, inflammatory biomarkers, anthropometric measures and obesity, elderly fall prevention, sleep apnea, Alzheimer’s disease, rheu-
matoid polyarthritis, multiple sclerosis, asthma, Type 1 and 2 diabetes, polycystic ovarian syndrome, osteoarthritis, and so on.
Disability, Hospitalization and Sick LeaveIn one review of PA and its association to disability on worker populations, the following interesting findings were described:18
• High preoperative level of PA was linked to good 1-year results of surgery for lumbar intervertebral disc herniation.
• Participation in sports can also have a positive influence on rehabilitating workers with muscu-loskeletal disorders.
• There were more low back symptoms if individu-als did not participate in sports, carrying an odds ratio (OR) 1.31.
• There was prolonged sick leave due to low back symptoms (OR: 2.71) as well as neck-shoulder symptoms (OR: 2.12) if they reported more sed-entary leisure time activities.
• Workers with physically strenuous work tended to have a higher incidence of lower-extremity symptoms (OR: 1.40) and associated sick leave (OR: 1.38) if they did not participate in sports.
Such findings are relevant in underwriting disability, hospitalization and sick leave benefits.
New Underwriting ToolBased on what we have so far established, there is a clear need to develop a simplified tool to measure PA and incorporate it in insurance underwriting. As the traditional age and amount underwriting require-ments continue to decline in importance over time, it will be necessary to find a practical way to measure PA. Some insurance companies are using trendy fit-ness gadgets like the Fitbit to measure PA. Another way would be to develop “non-exercise” testing meth-ods where clients are asked to declare information in the application. One such method is NET-F, or non-exercise testing cardiorespiratory fitness. This has proven to be strongly associated with all-cause and cardiovascular mortality. It is calculated as:
NET – F = [sex coefficient x 2.78–(age x 0.11) – (BMI x 0.17) - (RHR x 0.05)+(physical activity level coefficient)+21.41]
where sex coefficient is 1 for men and 0 for women, BMI is the body mass index, RHR is the resting heart rate, and the physical activity level coefficient is de-termined through a PA questionnaire.
ON THE RISK vol.33 n.4 (2017)66
Here is an example of the NET-F concept at work: A life insurance company could ask three or four specific questions about physical activity, i.e., What type of physical activity do you do? How many minutes per week do you exercise? What is the intensity of your exercise? Based on the answers, the underwriter could determine the physical activity level coefficient. For example, a male, 40 years old, having a build of 6 feet and 200 lbs (BMI of 27.18), 70 beats per minute at rest, reports working out twice a week, 30 minutes of strength training, and 45 minutes of jogging or cycling. This moderate-to-vigorous activity level gives us a coefficient of 0.64. (Note to the reader: Based on the study, each of several levels of physical activity is assigned a specific coefficient.) If we put all these data together, the individual will have a score of 12.3 MET. The underwriter then uses this value to evalu-ate the file based on the life insurance company’s own underwriting guidelines with respect to different MET values (determined by the NET-F method), as well as the type, intensity and duration of physical activity as determined by the above-mentioned questions. Not only has the NET-F method been shown to have good validity with respect to exercise testing-estimated CRF, it is also a cost-effective method. On the contrary, its major limitation lies in the fact that it is self-reported by the proposed insured; therefore, it is exposed to antiselection. The NET-F method can, however, be improved by adding simple tests like pe-dometers or accelerometers to objectively assess PA. This would result in a NET-F method that serves as a more powerful predictor of mortality.19 It is interest-ing to note that the sensitivity and specificity of this method is about 47% and 81%, respectively. These are figures similar to those of the EKG!20 In the end, there is really no perfect way to assess and manage risk, but new methods such as these are a more interesting means that move us closer to reflecting “true” risks.
ConclusionThe main challenge lies in comparing PA between different studies with respect to terms like “vigorous activities” or “high PA” – how these are defined and measured vary from study to study. And it is not al-ways easy to distinguish between what is really high intensity and high duration in these cases.In general, however, several interesting conclusions can be de-rived from our survey of available research:
• Being sedentary has a huge adverse impact on mortality and morbidity.
• HIIT training is more effective than MICT in increasing cardiorespiratory fitness capacity (MET), which in turn is closely associated to reductions in mortality and morbidity across all population segments.
• Increased PA probably has a bigger impact on morbidity than mortality, but the benefits are nonetheless enormous on both.
• Even if general recommendation of PA is at least 150 minutes per week of moderate-intensity exercise or 75 minutes per week of vigorous-intensity exercise, the maximum health benefits on morbidity and mortality is about 5 times this general recommendation. No additional benefits on health can be derived between 5 and 10 times the recommendation.1,21,22 And finally, “extreme” physical activity, in terms of duration rather than intensity, seems to have a slightly unfavorable effect (or no more beneficial effect) on health.
It is therefore evident that using measures of physical activity has clear advantages in underwriting both life and living benefits insurance, although PA’s beneficial effect on morbidity (living benefits) is demonstrated to be stronger. PA information is purposeful only if it can be measured in a practical way and incorporated in the pricing of insurance products and underwrit-ing. In this article, we discussed a few methods but there are many other possible options. Other considerations should also be taken into account in order to better reflect the pricing of risks: the type of PA (cardiovascular or strength training), intensity vs. volume, the overall duration of PA, the levels of improvement of cardiorespiratory fitness over time, the duration of inactivity time at any given day, and so on. We recognize that obtaining such information may entail a great deal of effort. But overall, given the immense predictive value of cardiorespiratory fitness on mortality and morbidity, it is no surprise that the life insurance industry is moving in the direction of using physical activity as a tool in offering dynamic and competitively priced products that better reflect the risks.
Notes1. Biswas A., Oh P., Faulkner G., Bajaj R., Silver M., Mitchell M.,
Alter D., Sedentary Time and Its Association With Risk for Disease Incidence, Mortality and Hospitalization in Adults, Annals of Internal Medicine, downloaded from http://annals.org on March 10, 2017.
2. Office of Disease Prevention and Health Promotion, https://health.gov/paguidelines/pdf/paguide.pdf.
3. Kodama S., Saito K., Tanaka S., et al. Cardiorespiratory fitness as a quantitative predictor of all-cause mortality and cardiovas-cular events in healthy men and woman: a meta-analysis. JAMA. 2009;301(19):2024-35.
4. Kodama S., Saito K., Tanaka S., Maki M., Yachi Y., Asumi M., Sugawara A., Totsuka K., Shimano H., Ohashi Y., Yamada N., Sone H., Cardiore-spiratory Fitness as a Quantitative Predictor of All-Cause Mortality and Cardiovascular Events in Healthy Men and Women: A Meta-Analysis, Journal of the American Medical Association, vol. 301, no. 19, May 20, 2009.
5. Llamas-Velasco S., Villarejo-Galende A., Contador I., Pablos D., Hernandez-Gallego J., Bermejo-Pareja F., Physical activity and long-term mortality risk in older adults: A prospective population based study, Preventive Medicine Reports, 4: 546-550, 2016.
6. Wei M., Kampert J., Barlow C., Nichaman M., Gibbons L., Paffenbarg-er R., Blair S., Relationship Between Low Cardiorespiratory Fitness and Mortality in Normal-Weight, Overweight and Obese Men, JAMA, vol. 282, No. 16, October 27, 1999.
ON THE RISK vol.33 n.4 (2017) 67
7. Farrell S., Fitzgerald S., McAuley P., Barlow C., Cardiorespiratory Fitness, Adiposity and All-Cause Mortality in Women, Official Journal of the American College of Sports Medicine, 2010.
8. Blair S., Kohl H., Barlow C., Paffenbarger R., Gibbons L, Macera C., Changes in Physical Fitness and All-Cause Mortality, JAMA, vol. 273, no. 14, April 12, 1995.
9. Samitz G., Egger M., Zwahlen M., Domains of physical activity and all-cause mortality: systematic review and dose-response meta-analysis of cohort studies, International Journal of Epidemiology, 40: 1382-1400, 2011.
10. Healy G.N., Winkler E.A., Owen N., et al. Replacing sitting time with standing of stepping: associations with cardio-metabolic risk biomarkers. Eur Heart J, 2015; 36:2643-2649.
11. Kohler L., Garcia D., Harris R., Oren E., Roe D., Jacobs E., Adher-ence to Diet and Physical Activity Cancer Prevention Guidelines and Cancer Outcomes: A Systematic Review, American Association for Cancer Research, June 23, 2016.
12. Eijsvogels H., George K., Thompson P., Cardiovascular benefits and risks across the physical activity continuum, www.co-cardiology.com, volume 31, number 5, September 2016.
13. Hussain S., Macaluso A., Pearson S., High-Intensity Interval Training Versus Moderate-Intensity Continuous Training in the Prevention/Man-agement of Cardiovascular Disease, Cardiology in Review, Volume 24, Number 6, November/December 2016.
14. Ramos J., Dalleck L., Tjonna A., Beetham K., Coombes J., The Impact of High-Intensity Interval Training Versus Moderate-Intensity Continuous Training on Vascular Function: a Systematic Review and Meta-Analysis, Sports Med, 45:679-692, 2015.
15. Ramos J., Dalleck L., Borrani F., Mallard A., Clark B., Keating S., Fassett R., Coombes J., The effect of different volumes of high-inten-sity interval training on proinsulin in participants with the metabolic syndrome: a randomised trial, Diabetologia, 59:2308-2320, 2016.
16. Terada T., Wilson B., Myette-Coté, E., Kuzik N., Bell G., McCargar L., Boulé N., Targeting specific interstitial glycemic parameters with high-intensity interval exercise and fasted-state exercise in type 2 diabetes, Metabolism Clinical and Experimental, 2016.
17. Morici G., et al. Endurance training: is it bad for you? Breathe, 140-147, No 2, Volume 12, June 2016.
18. Hildebrandt V., Bongers P., Dui J., van Dijk F., Kemper H., The re-lationship between leisure time, physical activities and musculoskel-etal symptoms and disability in worker populations, Int. Arch Occup Environ Health, 2000.
19. Stamatakis E., Hamer M., O’Donovan G., Batty G., Kivimaki M., A non-exercise testing method for estimating cardiorespiratory fitness: associations with all-cause and cardiovascular mortality in a pooled analysis of eight population-based cohorts, European Heart Journal, 34.750-758, 2013.
20. The Academy of Life Underwriting, Advanced Life Insurance Under-writing (301), Chapter 6: An Underwriter’s Guide To Cardiac Diagnostic Testing, page 2, 7th Edition, 2015.
21. Loprinzi P., Dose-response association of moderate-to-vigorous physical activity with cardiovascular biomarkers and all-cause mortal-ity: Consideration by individual sports, exercise and recreational physical activities, Preventive Medicine, 81.73-77, 2015.
22. World Health Organization: www.who.int/dietphysicalactivity/physical-activity-recommendations18-64years.pdf.
About the AuthorsRaphaël Roy-Brunelle, BSc, FALU, FLMI, ARA, ACS, has worked for the iA Financial Group for several years as an underwriter where he has brought new perspectives on health issues in various projects. In his new role as Risk Management Specialist, the primary focus of his work is in continuously improving the company’s underwriting risk evaluation process in close collaboration with various other functions of the company. He is a Director of AQTV (Association des Tarificateurs-Vie du Québec) and Co-President for the 2018 congress. Raphaël holds a bachelor’s degree in Kinesiology and is currently pursuing a master’s degree in Insurance Medicine at the University of Montreal. His strong dedication to his profession and continuing education ini-tiatives demonstrate his long-term commitment to underwriting development and the life insurance industry.
Marcel Padilla, MBA, FALU, FLMI, FLHC, ARA, ACS, is currently the Team Lead of the Brokerage Under-writing Team of the iA Financial Group where he has worked for more than 12 years. His responsibilities include the management of brokerage underwriters in the French and English teams, the development of relations with iA’s brokerage partners, the underwriting of VIP large cases, as well as participation in various underwriting projects. He previously held the positions of Manager of iA’s Individual Annuities Division and operations manager of a life insurance brokerage in Vancouver, Canada. Marcel is an MBA degree-holder with extensive corporate finance and entrepreneurial experience through his work with various multinational companies and his own private businesses. He is a current and active member of the ALU 202 examination group and the AQTV.
The ALU Curriculum Group at the 2017 ALU Annual Meeting (left to right): seated - Jeanne Hollinger, Mass Mutual; Jodi Mc-Donald, Hannover Life Re; Vicky Sheehan, Lincoln Financial; standing - Margaret Taff, Vantis Life Insurance; Peter Trivella, John Hancock Life; Lori Ammons, Self-Employed; Joanne Lackenbauer, Sunlife Financial.
ON THE RISK vol.33 n.4 (2017)68
FOREIGN TRAVEL: THE HIDDEN RISKS
Executive Summary This article explores the complexity of underwriting foreign travel. Un-derwriting an applicant who travels to foreign countries involves more than evaluating the government’s watch list for the country in ques-tion. Considerations often involve activities at the destination which may include avocation risks such as scuba diving and mountain climbing. This article offers several examples. Other travel risks include areas of the world that have substantial tropical diseases and poor medical facilities. There are websites and other references that are provided as an example. It is not just specific countries that represent a risk. Oftentimes there are instances where one area of a country offers a different risk from another area. The underwriter must pay attention to that detail as well and question the applicant on the specifics of travel. The world situation is always changing. There are countries that used to be acceptable but are no longer insurable and the reverse is also true. There are many things the underwriter should look for on cases involving foreign travel.
George Fulton, FLMI, ACSLife Underwriting AssociateRaymond James Insurance GroupTampa, [email protected]
Underwriting foreign travel can, at times, be just as complex as underwriting medical conditions. For example, underwriters may see a case from the safest of destinations that can become quickly uninsurable. Within a particular country, there may be areas that are acceptable and other areas in the same country that are uninsurable. Included in the bibliography are websites with useful information on various countries throughout the world that this article will be referencing. Many carriers use a letter guide to classify countries and use the state department’s travel warnings. For the sake of this discussion, an “A” country may be one that is acceptable for travel up to 6 months. A “D” country may represent an unacceptable risk. In between “A” and “D” are countries that are classified with the letters “B” and “C”, which might represent countries that are intermediate or changing risks. Evaluating the reasons that a specific travel risk is uninsurable can be challenging. It should be noted that the examples presented here are based on the situation at the time of the writing of this article. Even the best of destinations can carry unfore-seen risks.Let’s examine a hypothetical situation. An under-writer encounters a prescreen inquiry from an advisor about a specific country, Nepal. When the underwriter reviews his carrier’s guidelines, it is noted that it is on its “A” list. A brief look at information that is read-ily available about Nepal reveals that it is a peaceful country with no current involvement in wars and does not have any unrest or disease epidemics. An advisor might be notified that this situation was indeed sat-isfactory. However, a good follow-up question would be to ask about the purpose of travel. In this situation the purpose of traveling was for mountain climbing. Nepal is the home of the Himalaya Mountains. They
are the tallest, steepest and most dangerous moun-tains to climb including the infamous Mt. Everest. In this situation, that was the destination. At 29,000 ft. tall, this peak has claimed the lives of numerous climbers who have attempted to reach the summit. In addition to the landslides and other dangers, any climbs above 10,000 feet require the use of oxygen.1 It is clear that this risk is now uninsurable. Asking what activities the applicant plans to participate in is important in determining an applicant’s insurability.
In the evaluation of travel risk, there are many other hazardous activities to consider. Here are some ex-amples: Travel to the Caribbean or parts of Australia near the Great Barrier Reef could be complicated by
ON THE RISK vol.33 n.4 (2017) 69
a scuba diving risk.2 Also travel to South America could be for purposes of climbing the Andes Moun-tains3 or through the forests of the Amazon basin.4 Even popular vacation destinations throughout the Pacific Ocean include the hazard of diving exploration through shipwrecks from WW2.5 Although it may seem that an applicant is traveling to what are thought to be the safest countries in the world, the underwriter should be aware that there may be inherent risk that requires further development.
A country may appear on the “D” or uninsurable list for more than just the reasons of wars and violence. Outbreaks of tropical disease and poor medical fa-cilities/opportunity for medical treatment also play a factor in determining a country’s rating. The World Fact Book6 and the World Health Organization’s web-sites7 provide useful information about the situations in countries around the world, and it is most helpful in risk evaluation. One example of a country where medical facilities and disease outbreak may affect the overall rating is Liberia. Outbreaks of malaria, dengue fever, yellow fever and, most recently Ebola, have been critical factors in considering the insurability of travel to Liberia. Medical facilities are scarce, with only one doctor for every 100,000 of the population. With an average life expectancy at age 60, the country has both a maternal and an infant mortality rate that are among the highest in the world. It is apparent that a lack of access to regular medical care, for both local residents and visitors alike, is a significant risk factor for an applicant’s insurability.
Within a country, the risk can change.In a lot of cases, the risk is not uniform throughout
a country and will change depending on where the applicant plans to visit. The most common example of this is the coun-try of Israel. The prospects of insurability will be different depending on whether the applicant is traveling in Israel proper, the West Bank, the Gaza Strip or even the Golan Heights. Another example is Turkey. The southern provinces of Turkey border Syria, Iraq and Iran. That includes areas controlled by ISIS (Islamic State of Iraq and Syria). Travel to those areas of Turkey represent an obvious risk as confirmed by a State Department travel warning that is in effect at the time of the writing of this article.8
A common travel destination is Japan.
However, the damaged nuclear reactor in Fukushima, Japan, is not far from Tokyo. Some carriers may have travel restrictions for this situation as part of their underwriting guidelines. Because different areas of a country can have different guidelines, up to and including being uninsurable, it is important to obtain additional details. In addition to the names of countries to be visited, be sure to get details for the specific destinations within a country since that may make a difference in evaluating the risk.
Risks and ratings for countries can change over time. A country which was acceptable a few years ago may be uninsurable today, or vice versa. An example of this is Venezuela. While thought of previously as a peaceful and prosperous country without much con-cern for undue risk to travelers, the socio-economic situation in the country has deteriorated. In addition to riots and other violence, there have been shortages of food, water and medicine. Venezuela is now under a Department of State travel warning due to the risk of travel. Conversely, an example of a country in the op-posite situation is Cuba, which has been on multiple travel warning lists for decades. Diplomatic relations were only recently restored and the travel ban has been lifted, which has caused the country to become a new tourist destination. A good underwriter should always be aware of the news and global events.
Did you know? Both Florida and Georgia have passed legislation that forbids insurance companies from taking ad-verse action based on an applicant’s travel plans. California, Connecticut, Colorado, Illinois, Maryland,
ON THE RISK vol.33 n.4 (2017)70
Massachusetts, New York and Washington state have also banned any adverse action based upon any past travel. An underwriter should always be aware of this as well as keeping an eye on any future changes.9
ConclusionUnderwriting foreign travel should be done with the same attention to detail and due diligence as medical, financial or occupational risk factors. There are many hidden risks to foreign travel. While traveling, an applicant might engage in risky avocations he would not otherwise be involved in. In addition to avocations presenting risk, there are disease outbreaks and poor medical facilities in some parts of the world. Within a specific country, the risk can change based on the location of the planned travel. The world is constantly
changing and those changes can affect the risk both in a positive and negative manner. The important thing to be aware of is the purpose of the applicant’s travel, world events, and the terrain and environment of the destination country. Each of these factors can change the risk profile, sometimes dramatically.
Notes1. www.cnn.com/2016/05/22/asia/everest-climbing-deaths.2. www.australia.com/en/places/great-barrier-reef.html.3. www.andes.org.uk.4. www.britannica.com/place/Amazon-River.5. www2.padi.com/blog/2015/01/26/3-incredible-wwii-wreck-dives.6. www.cia.gov/library/publications/the-world-factbook/geos/xx.html.7. www.who.int/countries/en/.8. www.travel.state.gov/content/passports/en/alertswarnings.html.9. Information about state regulations on foreign travel are from the
ALU 202 textbook 5th edition chapter 11.
About the AuthorGeorge Fulton, FLMI, ACS, has over 20 years of experience in the insurance industry, and has experience in both the carrier underwriting as well as brokerage underwriting environment. He previously worked at MetLife, including more than 10 years as a life underwriter at its Tampa home office. During that time he also worked with other MetLife associates across the country to implement User Acceptance Testing for upgrades to the systems that underwriters used. He also worked on a Middle Market project that dealt with simplified issue for term policies. He now works for Raymond James Insurance Group, a part of Raymond James Financial, as a Life Underwriting Associate. As part of a large financial services firm, he works with financial advisors in helping their clients obtain life coverage with many different insurance carriers. He has recently completed his FMLI designation and continues with his education in the industry.
(Left) The ALU Marketing Group at the ALU Annual Meeting (left to right): Director of Marketing Jen-nifer Dahl, RBC Insurance; Sheri Boyda, RGA; Carla Martin, ExamOne; Angela Read, Mass Mutual.
(Right) Members of the ALU Board (left to right): Donna Daniels, AXA; Tanya Trachenko, Wawanesa Life; Jennifer Johnson, RGA Reinsurance; Frank Goetz, Pacific Life, hard at work.
ON THE RISK vol.33 n.4 (2017) 71
11th AnnualMidwestern Underwriting Conference
September 12-14, 2018
Join us at the Omni Interlocken Hotel/Broomfield in beautiful Denver, Colorado.
Visit our website for more exciting details at: www.midwesternunderwritingconference.com.
PROFESSIONALS,SAVE THIS DATE!!
ON THE RISK vol.33 n.4 (2017)72
A BOOK REVIEW: ZAPP! THE LIGHTNING OF EMPOWERMENT
Executive Summary This article is a review of the book, Zapp! The Lightening of Empowerment by William C. Byham, PhD, with Jeff Cox. The authors tell the story of a dysfunctional team in an imaginary company and how one manager changes by learning about empowerment. The book is not exclusively about empowerment, however, as it shares how the manager’s journey impacts his leadership style.
Marv Reber, FALUOTR Contributing [email protected]
IntroductionI remember “empowerment” as a buzz word of the 1990s. Sure enough, the copyright on this book, writ-ten by William C. Byham, PhD, and Jeff Cox is 1988. So why are we talking about empowerment here in 2017? Perhaps the answer is simple. I have read this book multiple times and loaned it out to more manag-ers or individuals interested in management than any other book I have. I believe the message is timeless, as it is about more than just empowerment, really how one might want to lead a team of employees. The book weaves its message into a story, really a fable complete with dragons, where employee Ralph Roscoe works at a fictional company, the Normal Company. Ralph invents a machine which allows him and his boss, Joe Mode, to venture into a different dimension, where they can observe from above the interactions that take place between employees and managers and within teams. They discover a team that works really well together. When a positive situ-ation or interaction is created between manager and employee, an electrical charge or Zapp is witnessed. In his own team, Joe finds situations or interactions that create negative energy. Here, a hissing sound, Sapp, is heard as the employee is Sapped of his energy. The story follows Joe’s quest to figure out how to Zapp his team. Joe keeps a notebook that he uses to update and summarize his findings. The book provides great insight on the role a manager might take to empower a team or to give feedback to other managers or a superior on how an organization might best prosper. While the story and the topics are quite simple, perhaps common sense to some, the manner in which the story is presented and the summaries make this book very informative and easy to read, especially for new managers.
Identifying What Doesn’t WorkManager Joe’s work first finds him evaluating prior departmental programs that have been tried over time. These include quality circles, job enrichment programs, reorganizations that flattened or created participative styles, suggestion systems, additional training or simple pep talks. He finds that some of these prior programs have met with limited success or have been confusing or even counterproductive. Joe attempts to figure out what Sapps people. He develops a long list which includes lack of trust, confu-sion, not being listened to, no time to solve problems, too many rules, the boss taking credit, not enough re-sources and people treated like interchangeable parts. Then Joe works to differentiate where individuals are Zapped vs. where they are Sapped. Things that Sapp include:
• Your job belongs to the company.• You do whatever you are told.• Your job doesn’t matter.• You don’t know how well you are doing.• You keep your mouth shut.• Your job is something different from who you are.• You have little or no control over your work.
Conversely, he discovers that individuals who have been Zapped feel differently. These include:
ON THE RISK vol.33 n.4 (2017) 73
• Your job belongs to you.• You are responsible.• Your job counts for something.• You know where you stand.• You have a say in how things are done.• Your job is part of who you are.• You have some control over your work.
Maintain or Enhance Self-EsteemManager Joe has listed a number of items that he feels can create the Zapp on his team. These include giving responsibility, creating trust, listening, solving problems as a team, giving praise and recognition, and numerous other positive ideas. His new chal-lenge is how to make these all happen. For example, creating trust on a team is a journey and cannot be accomplished without some long-term effort.
He identifies his first step as maintaining or enhanc-ing the self-esteem of individuals. Joe had some trouble with this at first as he felt that telling someone he was a snappy dresser or a good softball player would make him feel good about himself. He found that his comments need to be work-related, to build the person up and not put him down. The key to his success was saying specific and constructive state-ments related to specific job situations. This feedback also develops behaviors that will be repeated.
Listen and Respond with EmpathyNext, manager Joe makes an attempt to look people in the eye and listen to them. He finds it is difficult for him to listen well. His mind is moving faster than the speaker and his own thoughts are getting in the way. He finds that listening takes practice. Joe finds that he needs to summarize a conversation when complete, to respond with understanding and what he plans to do. Listening to an employee’s problem is not enough, it had to include his action to address the problem or get help for the employee.
Ask for Help in Solving ProblemsPerhaps my favorite chapter of the book involves a make-believe dragon laying eggs all over the company creating havoc. As this occurs, the managers push employees out of the way, followed by more senior managers pushing them out of the way. Finally, an outside “hero” is brought in. This outsider’s effort to swoop in and save the day Sapps the entire workforce. The managers fail to understand that the employees may have more knowledge about the specific chal-lenges and problems that arise in their work area. Joe learns there is great value in including the entire team in problem solving and resolution. He should seek ideas, suggestions and information from within the group.
Offer Help Without Taking ResponsibilityManager Joe has now learned that when there is a crisis, to allow the team to approach the problem, keeping everyone engaged. But when he really starts putting it together, he realizes he cannot leave the team to solve a problem themselves. He needs to stay involved, but not take over, offering to help, but keep-ing the responsibility with the team. Brainstorming with the team will find a solution to a problem, and allow the team to stay with the issue through comple-tion. Avoiding the “I’ll take it from here” attitude, Joe allows the team to own the problem, the idea for solving it, and the challenge of making it succeed. Offering to help without taking responsibility is identified as the soul of Zapp. To accomplish this, manager Joe needed to learn to delegate responsibil-ity where appropriate, share responsibility or keep responsibility. He learned he had several choices:
• Refer a task to the proper person.• Delegate authority to a task or decision.• Delegate a task without decision authority.• Keep a task.
He learns that too many controls or abandoning control Sapps people, whereas situational control Zapps. Sharing control does not mean abandoning responsibility. Manager Joe learns that he needs to continue to:
• Know what is going on.• Set direction for the team.• Make decisions the team cannot.• Ensure team members are on track.• Offer a guiding hand.• Assess performance.
Putting It All TogetherThe book continues as it takes these concepts and expands on them, while staying with the storyline. Eventually Joe finds that to make Zapp work, people need direction, knowledge, resources and support. In addition, Zapped individuals can become Zapped teams, which can become an entire Zapped organi-zation. The importance of the immediate manager is emphasized as having the greatest impact on the individual. Finally, the book encourages the reader to review the materials again and again, just as I have. I hope you will consider reading this wonderful and fun book on empowerment.
ON THE RISK vol.33 n.4 (2017)74
INTERVIEW WITH A LEADER: ROD BOGGS
About the Subject Rod is currently Corporate Vice President at New York Life Insurance Com-pany responsible for Underwriting Operations in its Direct Life business. He has worked in the insurance industry for just over 30 years, with experience in life and disability underwriting and disability claims. Prior to New York Life, Rod spent 17 years with MetLife in various leader-ship positions within the Individual Disability Income Underwriting and Claims departments. He started his career in insurance as a disability claims examiner at Paul Revere Life Insurance Company. Rod has a bachelor’s degree in Political Science from Trinity College, Hartford, CT, and an MBA from the University of South Florida. He lives with his wife Lori in Tampa, FL.
Rod BoggsCorporate Vice PresidentNew York LifeTampa, [email protected]
OTR What was your very first job? What were some of your responsibilities? Did you learn any skills or lessons that you still use today? RB My first job was a summer job insulating houses and commercial buildings. Nothing beats being in an attic surrounded by fiberglass in the middle of the summer. It may sound cliché but I learned what it was to work hard all day. It was physically draining, whereas today the work is more mentally exhausting. However, the work ethic that I developed during those early days insulating houses is the same I apply when grinding through a day full of meetings, e-mails and problems in an office environment. It also taught me the basics of being an employee, such as being on time, putting in an honest day’s work, and who FICA was and why he was taking my money. There was also value in seeing tangible results at the end of the day, which in our current line of business can be difficult. Cases come in and cases go out and at the end of the day there are always more waiting and more to come.
OTR How did you first get into insurance? RB I think most of us don’t grow up thinking we want to work for an insurance company. In fact, most uni-versities don’t even address the insurance industry. I was no different; for me it came down to the insurance company was one of the biggest and best employers in my hometown area, and after 4 years in college, I was excited to start earning a paycheck. OTR When you first started in insurance, at the time, did you imagine you were going to be an executive? RB No, and frankly, I didn’t think I would be working in the insurance industry for my entire career. Cer-tainly, during the first 2 years I wasn’t sure that sitting behind a desk was what I wanted to do with my life.
OTR What was your favorite job in this industry?
RB Looking back, it was my first job as a disability claims examiner. Every day was a new experience and I was able to learn from some of the most talented and respected people in the industry. The job also had a noble purpose, as you had the ability to help people in one of the most difficult times of their lives and that was meaningful to me. OTR What is the most meaningful piece of advice you have received during your career? RB To always bring solutions to a problem and not be afraid to share your opinion even if it goes against the grain. And most importantly, if the ultimate deci-sion is not the direction you suggested, it is still your job to make it happen. It is OK to disagree, but once a decision is made, you must put all your efforts into moving everyone forward together. OTR Tell us who has influenced you and how they influenced you.
ON THE RISK vol.33 n.4 (2017) 75
RB My parents influenced me quite a bit. Everything from the basics of being on time and responsible for your actions, to being a good person that people could depend on. They always set a good example both personally and professionally. Over the years, I was able to observe how they handled themselves in their respective careers and cannot overstate the value of what I picked up during dinner table conversations. (My mom was a teacher and I’d like to add here that no one should have to try to teach 8th grade boys.) Unfortunately, conversations over the dinner table are becoming rare and more challenging because of all the technology constantly creeping into the dinnertime space. Even today, my parents are great sounding boards for questions and issues that arise, and their experience is something I am grateful to be able to access. OTR What is the biggest challenge you faced as a leader? How did you work to overcome it? RB Companies go through cycles of growth and contraction for various reasons. It is during those periods of contraction that I believe a leader faces his toughest challenges and it is the most critical time to demonstrate strong leadership. I have been through a few of these changes over the last 30 years and I’m sure most reading this article have had similar ex-periences. One of the biggest challenges for me was announcing to a large and successful department, we were exiting a line of business. There were many emo-tions involved; people’s livelihoods were impacted not only internally with the employees, but also with the field force we serviced. We dealt with the decision by providing honest and frequent communication to all (internal and external). We established timelines that allowed for a smooth transition to get us through our peak season so we could be there for our customers. In addition, it provided our employees time to identify other job opportunities and producers time to estab-lish themselves with other carriers. We also were able to work with others in the industry to identify new job opportunities for our employees. Finally, we tried to keep the focus on maintaining service standards and commitments to our customers. OTR What is your favorite vacation destination? RB Italy. It has something for everyone. The food is some of the best in the world. The ancient buildings are engineering marvels, not just because they are still standing but because of the design and creativity involved. Museums are full of stone carvings that you just do not see being made anymore. OTR What advice would you give someone just start-ing out in a leadership position?
RB It is OK to not know everything and be sure not to pretend you do. The key is to surround yourself with a team of good people and help them to be suc-cessful. If you do that then their success becomes your success. Some of the most rewarding aspects of my career involve looking back at the success others have had and knowing I played a small part in their development.
OTR What is your best advice for succession plan-ning within an underwriting organization? RB It all starts with the recruiting process and hiring the best candidates. Do not settle; each time I have done so, I have regretted it. You know best what is required to do the job well, not the candidate. In the long term, you both will be better off. If you maintain high standards for the entry-level positions, you will have a deeper and richer talent pool to pull from as they develop. I would also advise that developing your replacement is beneficial. Especially, if you have a desire to move upward or onward to new challenges. You want to avoid the trap of being so valuable in your current position that the company does not want to risk moving you to new position for fear of negative downstream impacts. This is especially true in the un-derwriting and claims roles. It helps to demonstrate that you have developed a person or persons to take over in your absence. Along that line, it is also helpful to give your possible replacements opportunities to demonstrate their capabilities in front of senior lead-ership so that they are familiar with their skill sets.
OTR Great answer. Thank you, Rod. Now it is time for some quick-fire questions.
OTR Coffee or tea? RB Dunkin Donuts Coffee!OTR Filet or salmon? RB FiletOTR Book or e-book? RB Book, I need to see my progress.OTR Cake or pie? RB Anyone who has worked with me knows this an-swer, CAKE!OTR Football or basketball? RB Football – it requires 11 people to work in synchrony to accomplish a goal. Football is the best sports example of how working together as a team is the only way to accomplish your goal. OTR Jazz or rock? RB Rock, I was raised on AC/DC and Zeppelin.OTR Phone call or text? RB Text, no one answers his or her phones anymore.OTR Underwater or up in the air? RB Scuba diving is a new adventure for me. Being un-derwater requires your total focus and clears your mind.
ON THE RISK vol.33 n.4 (2017)76
(Left) Clockwise from head of table: Tim Ranfranz, President; Amy Prestegaard, EVP; Jamie Reynolds, Treasurer; Dawn Boitnott, VP Technology; Bill Moore, VP Membership; Richard Odom, AVP Tech-nology; Carrie Hoffman, Executive Director; Traci Davis, Past President; Pam Bergsten, VP Program; Scott Corbett, AVP Program, Carolyn Goshorn, VP Publications/Secretary.
(Right) Clockwise from head of table: Tim Ranfranz, President; Dawn Boitnott, VP Technology; Bill Moore, VP Membership; Ann Hittle, Meeting Planner; Sandra Nichols, VP Conference; Bill Tilford, VP External Relations; Carrie Hoffman, Executive Director; Traci Davis, Past President; Pam Bergsten, VP Program; Scott Corbett, AVP Program, Carolyn Goshorn, VP Publications/Secretary.
FROM THE 2018 AHOU PLANNING COMMITTEE IN CHICAGO
(Left) Pam Bergsten, VP Program and Scott Corbett, AVP Program chair the Program Committee session at the AHOU Planning Meeting for the 2018 Confer-ence in Chicago.
Program Committee session at the AHOU Planning Meeting for the 2018 Conference in Chicago – Left to right: Jennifer Richards (New York Life), Susan Hennis (Country Financial); Bob Morris (ExamOne); Kim Lancaster (RGA); Brad Gable (Protective); Jeannine DuPlessis (Fidelity Life); Shawn James (Sun Life); Mary Hanson (Swiss Re); Sonya Ostling (Farm Bureau); Kim Anderson (Turning Tides); Steve Stanley (Catholic Order of Foresters); and R. Dale Hall, Society of Actuaries.
ON THE RISK vol.33 n.4 (2017) 77
FALU Quiz Answer Key:
1. d2. a 3. a 4. a5. a - True
SCENCES FROM THE 2017 ALU ANNUAL MEETING IN SEATTLE
Even with all the hard work being done they still find time to smile!
ON THE RISK vol.33 n.4 (2017)78
From time to time, ON THE RISK makes its subscriber list available to advertisers. If any subscriber prefers to have his or her name removed from such lists, please submit your written request in writing via letter, fax or e-mail to OTR Publishing Services, 218 Harmony Drive, Delaware, OH 43015; e-mail: [email protected].
ADVERTISE IN For information contact:
Deb Wesenberg, Advertising ManagerPhone (309) 278-2520
E-mail: [email protected] Web advertising to your marketing strategy.
Visit the OTR web pages for online advertising rates and information.
www.ontherisk.com
OTR
INDEX TO ADVERTISERS
PLEASE TELL THESE ADVERTISERS HOW MUCH YOU APPRECIATE THEIR SUPPORT OF ON THE RISK!
APPS....................................................................................................................................................80AURA / RGA.........................................................................................................................................11Clinical Reference Laboratory.........................................................................................................40ESP................................................................................................................................................... 7ExamOne..........................................................................................................................................41First Financial Underwriting Services........................................................................................... 34Hank George, Inc.............................................................................................................................35Hannover Re ..................................................................................................................................17HOVIN Underwriting Partners, Inc................................................................................................79IBU*...................................................................................................................................................37Innovative Underwriting Solutions...................................................................................................25IUSolutions..........................................................................................................................................19Lexis Nexis...........................................................................................................................................9MIB.................................................................................................................................................15,43Milliman............................................................................................................................................21Parameds.com............................................................................................................................... 2,3RGA .................................................................................................................................................13Scor.....................................................................................................................................................31Tilford Consulting........................................................................................................................... 39
CHECK OUT THEIR ADS AND CALL THEM TODAY!
* These companies are also ON THE RISK website advertisers. Visit www.ontherisk.com (OTR Online) and link directly to their sites.
ON THE RISK vol.33 n.4 (2017) 79
Professional Life Underwriting SolutionsOur underwriting experience and quality service yields client satisfaction. Contact us or visit our website for full service information.
Partner with HOVIN to reach the top faster!Let us help you exceed your life underwriting time service standards.
Startegic partner of MIB
QUICK QUOTES | INFORMALS/FORMALS | APS SUMMARIES | AUDITS
Happy holidays and best wishes throughout 2018
Jan Vincent, President [email protected]
[email protected] Toll free 866-454-6846
www.hovinpartners.com
