Session 063 PD - Mortality Hot Topics. Moderator: David N. Wylde, FSA, MAAA

Transcription

1 Session 063 PD - Mortality Hot Topics Moderator: David N. Wylde, FSA, MAAA Presenters: Edward Hui, FSA Robert B. Lau, FSA, FCIA Hezhong Ma, FSA, MAAA SOA Antitrust Compliance Guidelines SOA Presentation Disclaimer

2 Recent Mortality Trends by Cause of Death SOA Annual Meeting, Session 063PD, Mortality Hot Topics Ed Hui, VP, Actuary

3 Quick Question! What is the ratio of: # Ever Died in History # Currently Living a) >2.0 b) c) <0.5

4 Takeaways: Recent US Mortality Trends 1. Focus: Recent mortality trends One piece of a greater MI goal 2. Alarming recent trends a) Cause of Death: Heart Disease/Circulatory, Cancer, Opioids (Bob), Suicides, Dementia, nervous system, accidental death,.. Source data: CDC, NVSS, reinsurers,.. a) Socioeconomic differences (Bob): -Material Information: SSA, NAS, CDC, HRS, NHIS, SOA,.. a) Geographic differences (Bob): -Possibly material? Information: America s Health Rankings, CDC,..

5 Overview: Long Term Historic Experience US Population Heat Map - 5 year Rolling Average Overall positive trend, variable, with period and possibly cohort differences. However note the last few years.. Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at or (data downloaded on 9/25/2017).

6 Overview: Long Term Historic Experience US Population, Compressed and Age-Adjusted per 100,000 Age-Adjusted Death Rates Annual % Decrease ( ) Annual % Decrease ( ) M 1.01% 1.27% F 1.22% 1.10% % 1.41% % 1.24% % 1.37% 4.00% 3.00% Annual Percentage Decrease CMI 4 year lookback smoothing Male Female Total % 0.96% 2.00% 1.00% 0.00% % Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at or (data downloaded on 9/25/2017). Age-Adjusted with 2010 reference year Same data, compressed into different helpful perspectives. Again note the most recent period..

7 Overview: Recent Historic Experience US Population and Other Various Countries 4.00% 3.00% 2.00% Annual Percentage Decrease CMI 4 year lookback smoothing US UK CA AU GER FR JP US Pop. Annual % Decrease ( ) Annual % Decrease ( ) M 1.53% 0.66% F 1.24% 0.42% % -1.20% % -0.15% % 0.43% 1.00% US Total MI (1 yr) % 0.88% 0.00% % -0.95% Some countries seem to have a somewhat similar downturn trend Source: Human Mortality Database. University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at or (data downloaded on 9/25/2017). Age-Adjusted with 2010 reference year

8 Analysis by Cause Of Death: by UCD - ICD Chapter US Population Crude Death Rates Certain conditions originating in the perinatal period Certain infectious and parasitic diseases Congenital malformations, deformations and chromosomal abnormalities Diseases of the blood and blood-forming organs and certain disorders involving the immune mechanism Diseases of the circulatory system Diseases of the digestive system per 100, Diseases of the ear and mastoid process Diseases of the eye and adnexa Diseases of the genitourinary system Diseases of the musculoskeletal system and connective tissue Diseases of the nervous system Diseases of the respiratory system Diseases of the skin and subcutaneous tissue Endocrine, nutritional and metabolic diseases External causes of morbidity and mortality Mental and behavioural disorders Neoplasms Pregnancy, childbirth and the puerperium Symptoms, signs and abnormal clinical and laboratory findings, not elsewhere classified Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017.

9 Analysis by Cause Of Death: Proportion Summary (Selected) US Population and Hannover Re, 2015 US Population Age-adjusted insured distribution Hannover Re Others 35.1% Circulatory 28.3% Others 30.0% Circulatory 21.3% Dementia & Alzheimer's 2.7% Drugs 3.9% Suicide 3.1% Neoplasms 26.8% Alzheimer's 3.2% Drugs & Mental Disorders/ Addictions 3.6% Suicide 4.9% Neoplasms 37.0% Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-Adjusted by Hypothetical Insured Distribution

10 Analysis by COD:Heart Disease & Disease of Circulatory system US Population -Connecting the periods of time Chart 1: Age-Adjusted Death Rates, Chart 2: Age-Adjusted Death Rates, Heart Disease Has this top beneficial trend actually stalled?..future? Chart 1 Source: SOA, Literature Review and Assessment of Mortality Improvement Rates in the U.S. Population: Past Experience and Future Long-Term Trends, August Figure 3 Chart 2 Source: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-adjusted by 2010 reference year

11 TOP TAKEAWAY:Heart Disease & Disease of Circulatory system? Call for MUCH further exploration...if accurate & persists...big shoes to fill

12 Analysis by Cause of Death: Disease of Circulatory System US Population and Hannover Re 300 Age-Adjusted Death Rates US Population US Pop. Annual % Decrease ( ) Annual % Decrease ( ) 250 Hannover Re M 2.23% 0.57% F 2.26% 0.23% per 100, % -0.13% % 0.39% % 0.59% % 0.86% Insurance experience should be considered in the additional context of UW wear-off and selection by COD -Applies to all remaining COD slides Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-Adjusted by Hypothetical Insured Distribution

13 Analysis by Cause of Death: Neoplasms US Population and Hannover Re 300 Age-Adjusted Death Rates US Population US Pop. Annual % Decrease ( ) Annual % Decrease ( ) 250 Hannover Re M 1.86% 1.91% F 1.65% 1.50% per 100, % 0.87% % 1.71% % 1.93% % 0.74% 50 Positive overall for US population. Promising pipeline Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-Adjusted by Hypothetical Insured Distribution

14 Analysis by Cause of Death: Dementia/Alzheimer's US Population and Hannover Re 25 Age-Adjusted Death Rates US Population - Dementia & Alzheimer's US Pop. Annual % Decrease ( ) Annual % Decrease ( ) Hannover Re - Alzheimer's M -4.30% -1.41% 20 F -5.43% -2.96% per 100, % -0.71% % 1.06% % -1.85% % -2.52% Apples Oranges, but both increasing How much is from new awareness? Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-Adjusted by Hypothetical Insured Distribution

15 Analysis by Cause of Death: Suicides US Population and Hannover Re 25 Age-Adjusted Death Rates US Population US Pop. Annual % Decrease ( ) Annual % Decrease ( ) 20 Hannover Re M -1.88% -0.41% F -3.06% -3.33% % -1.23% per 100, % -0.92% % -2.35% % -3.62% Great Recession impact, but it hasn t reverted Monitor high ages. Changing public policy and perception? Source of US Population: Centers for Disease Control and Prevention, National Center for Health Statistics. Multiple Cause of Death on CDC WONDER Online Database, released December, Accessed on 10/2/2017. Age-Adjusted by Hypothetical Insured Distribution

16 Final Takeaways: Recent US Mortality Trends Overall Population Trend and by Cause of Death 1. Overall Population Trend Slowdown since around Negative in 2015 Disproportionately younger / working ages 2. By Cause of Death Heart Disease/Circulatory: Largest trend benefit for population has stalled after ~40 years? Other notable material COD s: Deteriorated. Opioids, suicide, dementia, accidents, nervous sys.. Cancer: bright spot, even more meaningful for insurance

17 Session #63 Mortality Hot Topics Mortality / Improvement News at 11 Facts Sometime Thereafter Image: used under license from shutterstock.com

18 Overview What Makes Headlines Headlines = Facts? Do the same facts apply to your business? Use what data? SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 2

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20 . a marked increase in the all-cause mortality of middle-aged white non-hispanic men and women between 1999 and Although all education groups saw increases in mortality.those with less education saw the most marked increases Case & Deaton (Princeton University) SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 4

21 Are All Facts Created Equal? How do these facts relate to your business? Do you have your own data to compare? What other data better represents your business? SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 5

22 US Population Mortality Trend: Ages Deaths per 100, Ages Annual Trend Overall -0.61% Males -0.96% Females -0.06% Overall population Male Female Centers for Disease Control and Prevention, National Center for Health Statistics. Compressed Mortality File. (accessed Jan. 3, 2017) U.S. Bureau of Economic Analysis, Local Area Personal Income and Employment table (accessed Nov. 15, 2016) 6

23 US Population Mortality by CSAI Deaths per 100, Male Annual Trend Overall -0.96% Top 25% -1.88% Bottom 25% 0.04% CSAI County Specific Average Income Overall population Bottom 25% PCI Top 25% PCI Centers for Disease Control and Prevention, National Center for Health Statistics. Compressed Mortality File. (accessed Jan. 3, 2017) U.S. Bureau of Economic Analysis, Local Area Personal Income and Employment table (accessed Nov. 15, 2016) 7

24 US Population Mortality by CSAI Deaths per 100, Female Annual Trend Overall -0.06% Top 25% -1.41% Bottom 25% +1.30% CSAI County Specific Average Income Overall population Bottom 25% PCI Top 25% PCI Centers for Disease Control and Prevention, National Center for Health Statistics. Compressed Mortality File. (accessed Jan. 3, 2017) U.S. Bureau of Economic Analysis, Local Area Personal Income and Employment table (accessed Nov. 15, 2016) 8

25 US Population Mortality by CSAI Deaths per 100, Male Annual trend Overall -1.31% Top 25% -2.01% Bottom 25% -0.63% CSAI County Specific Average Income Overall population Bottom 25% PCI Top 25% PCI Centers for Disease Control and Prevention, National Center for Health Statistics. Compressed Mortality File. (accessed Jan. 3, 2017) U.S. Bureau of Economic Analysis, Local Area Personal Income and Employment table (accessed Nov. 15, 2016) 9

26 US Population Mortality by CSAI Deaths per 100, Female Overall population Bottom 25% PCI Top 25% PCI Annual trend Overall -1.51% Top 25% -2.37% Bottom 25% -0.72% CSAI County Specific Average Income Centers for Disease Control and Prevention, National Center for Health Statistics. Compressed Mortality File. (accessed Jan. 3, 2017) U.S. Bureau of Economic Analysis, Local Area Personal Income and Employment table (accessed Nov. 15, 2016) 10

27 Making Cents of the Facts Do see a flattening of mortality in Population (mid-age) See a different pattern by income (education?) Segment representative of Insured mortality? Male vs. Female Attained Age Varying Mortality Improvement assumption Effectively predicting the MI pattern for your business Profitability (Dollars or Cents?) SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 11

28 In the news 2017 Munich American Reassurance Company. All Rights Reserved 12

29 Are All Facts Created Equal? How does this relate to your business? Do you have your own data to compare even less data What other data better represents your business? SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 13

30 Opioids Hard to deny the facts Concerning societal trend overall SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 14

31 Substance abuse death rate trend in the US Opioid vs non-opioid Substance Abuse Population Deaths Rates (Ages 0-84) Death per 100,000 Population All Substance Abuse Opioid Abuse Non-Opioid Substance Abuse > 460,000 substance abuse deaths > 250,000 opioid abuse deaths Data Source: Mortality Multiple Cause-of-Death Public Use Record from the CDC

32 Opioids Hard to deny the facts Concerning societal trend overall Looking from the Insurers perspective How to investigate with Limited Data SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 16

33 Substance abuse death rate trend in the US Education Level Death per 100,000 Population Substance Abuse Death Rates by Education Level High School or Less Some College BA/BS Graduate Work Data Source: Mortality Multiple Cause-of-Death Public Use Record from the CDC Are Drugs Abusing Insurance? Guzman/Morant 13 Sep 2017

34 Substance abuse death rate trend Compare population to insurance experience - Year Deaths per 100, Drug Abuse Death Rate Insured Population Population College Educated (Population) Insurance - Durations 16+ Insurance - Durations 1-15 Population Data: Mortality Multiple Cause-of-Death Public Use Record from the CDC (> 460,000 substance abuse deaths) Insurance Data: Munich Re Internal Data (~300 claims in durations 16+, > 1,400 in all durations)

35 Substance abuse death rate trend Compare population to insurance experience Attained age 25 Drug Abuse Death Rate Deaths per 100, Population - All Population - College Educated Insurance - Duration16+ Insurance - Durations 1-15 Population Data: Mortality Multiple Cause-of-Death Public Use Record from the CDC (> 460,000 substance abuse deaths) Insurance Data: Munich Re Internal Data (~300 claims in durations 16+, > 1,400 in all durations)

36 Opioids q x Pop > q x Insured (substance abuse) Historical Underwriting has been an effective screen so far Substance abuse mortality in the college educated subset of the population may be a reasonable proxy for insured mortality in the ultimate period. SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 20

37 Geographic Not news Need to Consider SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 21

38 All COD Annual Mortality Change: Male & Female, Age-Standardized State Annual Change US Avg -1.03% CA -1.44% NY -1.54% FL -1.07% Positive long-term trend for all states but level of improvement varies by state and county Source: Institute for Health Metrics and Evaluation (IHME). US Health Map. Seattle, WA: IHME, University of Washington, (Accessed [July 28, 2017]) 22

39 All COD Annual Mortality Change: Male & Female, Age-Standardized State Annual Change US Avg -0.44% CA -1.38% NY -1.01% FL -0.39% Short-term trend is less favorable significant reduction from the period; negative trend in some states Source: Institute for Health Metrics and Evaluation (IHME). US Health Map. Seattle, WA: IHME, University of Washington, (Accessed [July 28, 2017]) 23

40 Considerations Today and Future Your Business Today (Geographic, Income, Education, etc.) New Underwriting Credit, consumer data, etc. Wearables value of initial UW. Continued tracking promoting well-being Profile vs. actual individual characteristics miss individual characteristics Mid-Market Business Distribution changes Streamlined move to new geographic, socio-economic, etc. Lapses deterioration from frequent lapses? Genetics / Medical Advancements SOA Annual Conference 2017 Sessions #63 Mortality Hot Topics 24

41 Questions? Thank you! Image: used under license from shutterstock.com