WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? Brice Salence, - - PowerPoint PPT Presentation

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WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? Brice Salence, - - PowerPoint PPT Presentation

Dec 30, 2023 336 likes •762 views

HOW MUCH WOOD WOULD A WOODCHUCK CHUCK, IF A WOODCHUCK COULD BE REASONABLY EXPECTED TO CHUCK WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? Brice Salence, Pedrie le Roux SCOR 1. INTRODUCTION-CASE STUDY ONE 46 year-old saleslady, repeated

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HOW MUCH WOOD WOULD A WOODCHUCK CHUCK, IF A WOODCHUCK COULD BE REASONABLY EXPECTED TO CHUCK WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE?

Brice Salence, Pedrie le Roux SCOR

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SLIDE 2
  • 1. INTRODUCTION-CASE STUDY ONE

ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

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46 year-old saleslady, repeated hernia complaints “inability to perform own or any other occupation for gain or reward to which the life assured would be reasonably suited by education, training, earnings, status or experience.”

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SLIDE 3

AGENDA

  • 1. Introduction
  • 2. Is There a Problem?
  • 3. Termination Experience
  • 4. Industry Guidance
  • 5. Survey Feedback and Results
  • 6. Possible Solutions
  • 7. Conclusion

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HOW MUCH WOOD WOULD A WOODCHUCK CHUCK, IF A WOODCHUCK COULD BE REASONABLY EXPECTED TO CHUCK WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE?

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SLIDE 4
  • 2. IS THERE A PROBLEM?

GROUP INCOME DISABILITY POLICY DEFINITIONS

  • Initial Period:

“inability to perform your own occupation with own/any employer”

  • Extended Period:

“inability to perform your own or any reasonably suited alternative

  • ccupation, given the member’s age, education, training and

experience (ETE) with any employer” “inability to perform any occupation with any employer”

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SLIDE 5
  • 2. IS THERE A PROBLEM?

GROUP INCOME DISABILITY POLICY DEFINITIONS

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F102 “When costing for different benefit definitions it is important to make allowance for

  • interpretation. Whilst a pricing actuary would regard the inability to perform “any”
  • ccupation as severe, in practice a more lenient interpretation is often made.”
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SLIDE 6
  • 3. TERMINATION EXPERIENCE

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  • 3. TERMINATION EXPERIENCE

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AUS SA

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SLIDE 8
  • 3. TERMINATION EXPERIENCE

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USA AUS SA

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SLIDE 9
  • 4. INDUSTRY GUIDANCE

APPLYING THE DEFINITION IN PRACTICE

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“inability to perform your own or any reasonably suited alternative

  • ccupation, given the member’s age, education, training and

experience (ETE) with any employer”

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SLIDE 10
  • 4. INDUSTRY GUIDANCE

LOA – GUIDELINES FOR ASSESSMENT OF IMPAIRMENT AND DISABILITY

  • Age

 Close to retirement age

  • Income

 Fall of more than 25%

  • Current Position

 Length time in position  Experience, level of education and qualifications

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SLIDE 11
  • 4. INDUSTRY GUIDANCE

ASISA GUIDELINES

ASISA issued assessment guidelines for various claim causes Ensure claims are dealt with according to TCF Principles

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SLIDE 12
  • 4. INDUSTRY GUIDANCE

PROF CHRISTIE – OCCUPATIONAL DISABILITY CLAUSES: OPINION FOR THE OMBUDSMAN (1998)

  • “No general test can be applied, but in the end the question must be whether it

is reasonable to expect this assured to pursue this occupation.”  Assures against disability, not unemployment  Occupation can’t be “fanciful”

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SLIDE 13
  • 4. INDUSTRY GUIDANCE

PROF CHRISTIE – OCCUPATIONAL DISABILITY CLAUSES: OPINION FOR THE OMBUDSMAN (1998)

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JAI-ALAI

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  • 4. INDUSTRY GUIDANCE

SUE MYRDAL – THE INTERPRETATION AND APPLICATION OF DISABILITY DE FINITIONS (2008)

  • Insurers must specify the particular occupations that it contends the insured can

follow.  Roof carpenter Bench Carpenter  Janitor Security Guard

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  • 4. INDUSTRY GUIDANCE

OMBUDSMAN FOR LONG-TERM INSURANCE

Ombudsman supported insurer decisions in 63% of disability cases Claims declined (policy terms or conditions not met) https://www.ombud.co.za/useful-information/topics-and-cases

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  • 5. SURVEY FEEDBACK AND RESULTS

INDUSTRY SURVEY

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Claims Assessors Pricing Actuaries Product Development Actuaries

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SLIDE 17
  • 5. SURVEY FEEDBACK AND RESULTS

INDUSTRY SURVEY – INITIAL PERIOD DEFINITIONS

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  • 5. SURVEY FEEDBACK AND RESULTS

INDUSTRY SURVEY – EXTENDED PERIOD DEFINITIONS

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SLIDE 19
  • 5. SURVEY FEEBACK AND RESULTS

SOURCES OF ASSESSING ALTERNATIVE OCCUPATIONS

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SLIDE 20
  • 5. SURVEY FEEDBACK AND RESULTS

INDUSTRY SURVEY – REASONABLE ALTERNATIVE OCCUPATIONS GIVEN ETE

  • Actuary

Lecturer

  • Manufacturing at platinum plant with platinum allergy Other ore plants
  • Underground electrician Above ground electrician
  • Sales representative

Administrative work

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  • 5. SURVEY FEEDBACK AND RESULTS

MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION

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Percentage of respondents

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SLIDE 22
  • 5. SURVEY FEEDBACK AND RESULTS

MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION

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Percentage of respondents

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SLIDE 23
  • 5. SURVEY FEEDBACK AND RESULTS

MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION

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Percentage of respondents

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SLIDE 24
  • 5. SURVEY FEEDBACK AND RESULTS

“…disabled from carrying

  • ut

his

  • wn
  • ccupation or any other occupation which he

could reasonably be expected to follow, taken into account his age, education, training, knowledge, status, ability or experience.”

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MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION

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SLIDE 25
  • 5. SURVEY FEEDBACK AND RESULTS

SIGNIFICANT STAKEHOLDERS

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  • 5. SURVEY FEEDBACK AND RESULTS

NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION

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Number claims grouping

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  • 5. SURVEY FEEDBACK AND RESULTS

NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION

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Number claims grouping

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SLIDE 28
  • 5. SURVEY FEEDBACK AND RESULTS

NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION

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  • 5. SURVEY FEEDBACK AND RESULTS – CASE STUDY ONE

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46 year-old saleslady, repeated hernia complaints “inability to perform own or any other occupation for gain or reward to which the life assured would be reasonably suited by education, training, earnings, status or experience.”

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SLIDE 30
  • 5. SURVEY FEEBACK AND RESULTS

CASE STUDY ONE – INDUSTRY RESPONSES

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SLIDE 31
  • 5. SURVEY FEEBACK AND RESULTS

CASE STUDY ONE – INDUSTRY RESPONSES

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  • 5. SURVEY FEEBACK AND RESULTS

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Admin work

Cashier

Sales job

Accommodated

job

Limited alternatives

Seated job

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SLIDE 33
  • 5. SURVEY FEEBACK AND RESULTS

CASE STUDY TWO

“inability to perform own or any other suited occupation for which he is or could reasonably be expected to become qualified by his knowledge, training, education, ability and experience.”

  • 40 year-old bus driver
  • Suffered gunshot wound
  • Left leg amputated above the knee, wears a prosthesis

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SLIDE 34
  • 5. SURVEY FEEBACK AND RESULTS

CASE STUDY TWO - RESPONDENTS

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  • 5. SURVEY FEEBACK AND RESULTS

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Young Handyman

  • r

maintenance

Prior

  • ccupation

Drive

automatic vehicle

Not

incapable

  • f working

Office job

  • r admin work

No ‘office job’ training Limited alternative jobs Alternative job with company Can be reskilled Disabled – even prior jobs Foreman Teaching

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SLIDE 36
  • 5. SURVEY FEEBACK AND RESULTS

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  • 6. POSSIBLE SOLUTIONS TO CONSIDER

REGULAR TERMINATION BASIS UPDATES

  • Fewer claimants terminating at change of definition
  • Bases should reflect current experience
  • Impacts fully credible scheme pricing

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  • 6. POSSIBLE SOLUTIONS TO CONSIDER

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BENEFIT STRUCTURES

Definitions

  • “CI” type definitions
  • Functional Impairment hybrid
  • “Own” throughout definition
  • “Reasonable” throughout definition
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  • 6. POSSIBLE SOLUTIONS TO CONSIDER

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BENEFIT STRUCTURES

Motivations

  • Replacement ratio
  • Escalation options
  • Shorter initial periods

Other

  • Limited claim conditions
  • Employer benefits
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  • 7. CONCLUSION

IN SUMMARY

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Any Suited Own?

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  • 7. CONCLUSION

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SO much wood would a woodchuck chuck,

if a woodchuck could chuck wood!

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SLIDE 42

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QUESTIONS?

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