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South Africa a lifestyle time -bomb? Petro Appelo Business - - PowerPoint PPT Presentation
South Africa a lifestyle time -bomb? Petro Appelo Business - - PowerPoint PPT Presentation
South Africa a lifestyle time -bomb? Petro Appelo Business Development Actuary Hannover Re Actuarial Society 2015 Convention 17 18 November 2015 Lifestyle Factors Diet Stress Work Alcohol demands Sleep Smoking Drugs Actuarial
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Actuarial Society 2015 Convention 17 – 18 November 2015
Expectation vs Reality
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Mortality rates (qx)
Aggregate non-natural mortality rates (qx
A) for South African Insured population
Accidental Mortality rates (qx
A)
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* Based on Hannover Re mortality tables
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Actuarial Society 2015 Convention 17 – 18 November 2015
Expectation vs Reality
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65+ Accidental Mortality rates (qx
A)
Motor Vehicle Accidents Other non-natural
4
* Based on Hannover Re mortality tables
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Actuarial Society 2015 Convention 17 – 18 November 2015
South African Insured Mortality Rates
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Mortality rates (qx) Natural causes Non-natural causes
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* Based on Hannover Re mortality tables
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Actuarial Society 2015 Convention 17 – 18 November 2015
South African Insured Mortality Rates
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Breakdown of total mortality rate (%) Non-natural Natural
Breakdown of total mortality rate by Non-natural and Natural causes 6
* Based on breakdown of total claim amounts paid in market experience investigation
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Actuarial Society 2015 Convention 17 – 18 November 2015
Results relative to Other Markets
South Africa 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Mortality rates (qx) South Africa United Kingdom
Total mortality rates (qx) for Male Non-smokers 7
* Based on Ultimate rates used by Hannover Re in South Africa and the United Kingdom
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Actuarial Society 2015 Convention 17 – 18 November 2015
Results relative to Other Markets
0% 100% 200% 300% 400% 500% 600% 700% 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Relative mortality rates (SA: UK)
South African rates relative to United Kingdom rates for Male Non-smokers at Ultimate Durations 8
* Based on Ultimate rates used by Hannover Re in South Africa and the United Kingdom
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Actuarial Society 2015 Convention 17 – 18 November 2015
Non-natural causes
Motor vehicle accident Suicide Violent assaults Other non-natural 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 54 to 59 60 to 64 65+ Breakdown of non-natural mortality rate
Breakdown of total Non-natural Mortality rate by Detailed Cause
* Based on breakdown of total claim amounts paid in market experience investigation
9
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Actuarial Society 2015 Convention 17 – 18 November 2015
Risk Breakdown
Non-Natural Natural 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65+ Mortality rates (qx)
86% of exposure
Non-Natural Natural 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 Mortality rate (qx)
10
* Based on Hannover Re mortality tables
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Actuarial Society 2015 Convention 17 – 18 November 2015
How is this being taken into account in Life Insurance
Natural 42% Motor vehicle accidents 33% Violent assaults 10% Suicide 8% Other non- natural 5% Aviation 2%
Underwriting Requirements:
- HIV test
- 30 medical
questions
Average 40 year old male 11
Cardiovascular 10% Other Natural 32%
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Actuarial Society 2015 Convention 17 – 18 November 2015
How is this being taken into account in Life Insurance
‘Average’ Joe
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Actuarial Society 2015 Convention 17 – 18 November 2015
Potential cost reductions
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total cost 20% reduction Natural MVAs Suicide Violent assaults Other non-natural Aviation
Average 40 year old male 13
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total cost 50% reduction Natural MVAs Suicide Violent assaults Other non-natural Aviation
* Based on Hannover Re market experience investigation
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Actuarial Society 2015 Convention 17 – 18 November 2015
Potential Cost Reductions
20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 Mortality rates (qx) Revised Mortality rate Mortality rate
50% Reduction in Certain Non-natural Causes
45% 35% 30% 25% 20% 17% 14%
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* Based on Hannover Re market experience investigation
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Actuarial Society 2015 Convention 17 – 18 November 2015
Conclusion
Non-natural causes account for 43% of total claim amounts paid in industry Research of risk misaligned to emerging experience
- Better use of
information available
- Incorporating short-
term risk assessment techniques
Understand profile of factors that contributes towards risk aversion or risk taking behaviour
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