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2009 General Meeting ● Assemblée générale 2009Ottawa, Ontario ● Ottawa (Ontario)

2009 General Meeting ● Assemblée générale 2009Ottawa, Ontario ● Ottawa (Ontario)

Canadian Institute

of Actuaries

Canadian Institute

of Actuaries

L’Institut canadien desactuaires

L’Institut canadien desactuaires

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CRITICAL ILLNESS INCIDENCE STUDY UPDATE (PD-15)

Charlie Philbrook

Emile Elefteriadis

CIA General Meeting

19 November 2009, 2009

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Introduction – Emile Elefteriadis

Incidence Rate Development Overview-Charlie Philbrook

Incidence Rate Development Example-Emile Elefteriadis

Experience Study-Charlie Philbrook

AgendaAgenda20

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Introduction

• Living Benefits Subcommittee formed in late 2006

• Initial mandate to focus on Critical Illness (CI) and develop a base table and experience study.

– two reports; one for the table and its development and one for the experience study

– to assist the profession– a rich source of population based data to derive incidence

rates– display various methodologies of construction– it will be a table showing population adjusted incidence– collect and compare experience to a reference table

• Similar to Staple Inn reports on CI

• Report on table to be published before Q2 2010

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Introduction

• Current committee members– Alethea Lyn – Anke Roman– Banasha Shah– Charlie Philbrook– Chris Piper– Debra Shelley– Dominic Hains– Frederic Jacques– Geoff MacDonell– Graham Dixon– Ian Jack– Martin Vezina

• Former members: Cathy Shum-Adams, Saul Gercowsky

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Purpose and Scope of the Study

To develop a base table from Canadian data which can be used for benchmarking experience and determining appropriate pricing and valuation bases.

•There is differentiation by age and sex but not by smoking status.

•There is no adjustment for insured selection and underwriting impact (other than prevalence and first-ever adjustments).

•It’s a population based table.

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Illnesses Covered

• Cancer (Life-threatening, Benign Brain Tumour, Malignant Melanoma, Early Stage Prostate, Ductal Carcinoma in situ

• Heart (Heart Attack (AMI), Coronary Artery Bypass Graft (CABG), Coronary Angioplasty, Heart Valve Surgery, Aortic Surgery

• Stroke

• Kidney Failure

• Major Organ Failure/Transplant

• Multiple Sclerosis

• Alzheimer’s Disease

• Parkinson’s Disease

• Loss of Independent Existence

• Minor Conditions (Coma, Occupational HIV, Blindness & Deafness, Paralysis, Severe Burns, Loss of Limbs/Dismemberment, Loss of Speech, Bacterial Meningitis, ALS-Motor Neuron)

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Data SourcesMost sources cover the general population in Canada.

Major Sources•Canadian Institute for Health Information (CIHI) •Statistics Canada (StatsCan) •Canadian Cancer Statistics, 2007. •Institute for Clinical and Evaluative Studies (ICES)

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Development of Incidence Rates

Definition

Base source

Trending

First-ever adjustment

Sudden death adjustment

Overlap

Prevalence

31-day mortality

Summary

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General Process

• Identify the insurance definition for condition• Find applicable data useful for calculating incidence

rates• Make adjustments to the data to reflect definition,

gender and age, first occurrence, prevalence, etc. • Document the assumptions and process• Present to sub-group with peer review and once

final present to entire group

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CI Definition of Multiple Sclerosis

Benchmark Definition:

Multiple Sclerosis is defined as “a definite diagnosis of at least one of the following:– two or more separate clinical attacks, confirmed by

magnetic resonance imaging (MRI) of the nervous system, showing multiple lesions of demyelination; or,

– well-defined neurological abnormalities lasting more than 6 months, confirmed by MRI imaging of the nervous system, showing multiple lesions of demyelination; or,

– a single attack, confirmed by repeated MRI imaging of the nervous system, which shows multiple lesions of demyelination which have developed at intervals at least one month apart.

The diagnosis of Multiple Sclerosis must be made by a Specialist.”Thanks to

Chris Piper for this section!

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Possible MS Data Sources

Canadian MS Sources:– MS Society of Canada– Study on incidence and prevalence of MS

in Saskatoon.– Alberta study using Alberta Health Care

Insurance Plan dataInternational MS Sources:– European sources – Finland has high

rate of MS similar to Canada– Staple Inn Report (Exploring the Critical

Path)

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Saskatoon Study

• Why use Saskatoon study data? – Canadian source with best level of detail

– age and gender splits– Need to decide whether good

representative data for all of Canada

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Saskatoon Study Incidence Rates

Incidence of multiple sclerosis in Saskatoon, 1970 to 2004

  Men Women Total

Age Rate* Rate* Rate*

0-14 — 0.3 0.15

15-24 4.1 18.3 11.5

25-34 11.5 25.9 18.7

35-44 8.5 20.0 14.5

45-54 5.9 7.7 6.8

55-64 1.6 4.8 3.2

65-74 1.1 0.4 0.7

75 — — —

Total 4.7 11.2 8.1

•Incidence rate per 100,000 Saskatoon population, 2001.

Source: Incidence and Prevalence of Multiple Sclerosis in Saskatoon, Saskatchewan

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Population Mix Adjustment• Are there significant differences in the

characteristics of the population in Saskatoon relative to Canada in general which could impact the incidence rates?

• MS incidence and prevalence has been shown to vary based on:

– Ethnicity– Country / Region – higher in Canada and within

specific regions in Canada (prairies)– Gender – higher in females (F:M – 2.1 to 3.6

depending on study)

Overall incidence adjusted to Canadian population is 102.8% for Male and 102.4% for Female

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Progressive Form Adjustment

• The insurance definition of MS pays out on a more progressive form of the condition – not initial diagnosis.

• This means that a method is needed to adjust the data to reflect when the payment would occur under the CI definition. Sources:– Staple Inn Paper– Kurtze Expanded Disability Status Scale– MS Society

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Progressive Form Adjustment

• Without further data the Modified Staple Inn approach is preferred approach:– Simple approach– Approach: 10% occur immediately with

90% occurring evenly over the next 14 years.

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Trending Adjustment

• Nothing conclusive to suggest an increase in incidence in the population since 2001. There was evidence of increases in the 50 years prior but could be due to advancements in medical technology and ability to diagnose.

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Recurrence Adjustment

• Not relevant for MS as it is a progressive condition with symptoms that change over decades of the diagnosed person’s lifespan.

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Overlap Adjustment

• The overlap adjustment is important for other conditions such as Stroke, Coronary Artery Bypass Surgery, etc. as there exists a strong correlation in the incidence of the conditions.

• No overlap adjustment was assumed for MS as there is no available evidence linking MS to any of the other critical illness conditions in the study.

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Prevalence Adjustment

• Same source as incidence rates – essentially zero adjustment by age and gender.

• Estimates are that 55,000 to 75,000 cases exist in Canada.

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30 Day Survival Adjustment

• General population mortality as initial mortality rate not known to increase significantly.

• More important for conditions such as heart attack and stroke.

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Final Incidence Rates

2008 Canadian MS Incidence Rates per 1000Age

Initial Rate With Adjustments Initial Rate With Adjustments20 0.042 0.015 0.187 0.065 30 0.118 0.069 0.265 0.208 40 0.087 0.102 0.205 0.237 50 0.061 0.079 0.079 0.161 60 0.016 0.046 0.049 0.076 70 0.011 0.017 0.004 0.034 75 - 0.010 - 0.016

Male Female

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Comparison to Other Sources

Source: Staple Inn Report (Exploring the Critical Path)

2008 Canadian MS Incidence Rates per 1000

0.0000

0.0500

0.1000

0.1500

0.2000

0.2500

0.3000

15 25 35 45 55 65 75 85

Male Female Male SI Female SI

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Canadian Individual Critical Illness Morbidity Study

• Purpose is to study CI experience relative to the reference tables and report results along dimensions that are of interest to actuaries

• Similar to individual mortality report, but tailored to Critical Illness

» by covered condition» by ROP vs non-ROP» by # of covered conditions» results presented in pivot table format

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Canadian Individual Critical Illness Morbidity Study

• Basis of Investigation– Canadian adult lives, individual, single life only– fully underwritten (nonmed, paramed, medical)– standard and substandard– stand-alone and acceleration– conversions and plan changes (original age and

duration)

• First study will cover claims and exposures for policies with policy anniversary years ending in 2003 – 2007

• 6 insurers have agreed to participate so far (with a 7th committed for next year) and a few others are still deciding

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Canadian Individual Critical Illness Morbidity Study

• Study contracted to Barbara Thomson of Thomson Data Analysis

• Three files required– Exposure File

– Coverage File

– Claims File

• Coverage File will permit analysis by impairment– will be able to capture full benefit and partial benefits

• Plan for publication of report is October of 2010– could be significant delays depending on timing and quality of

data submissions

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Canadian Individual Critical Illness Morbidity Study

• Coverage file may be time consuming to produce in the first year

– Requires knowledge of what conditions are covered under all contracts sold over time

– If not stored on system, could require manually pulling contracts

• Common link between three submission files is key• Submission request reflects the fact that there can

be partial benefit payments• Unsure of overlap impact

– A stroke followed by a coma… which one is reported?

• Expect to see higher proportion of litigated claims• Enough data is there to do a mortality or lapse

study as well, though not in scope for 2010