Foreign RisksNEHOUAOctober 13,2017
Chris Regione, AVP UnderwritingKevin Glasgow, 2nd VP Claims
iStock by Getty Images
Key objectives for session
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Understanding the definition of a “foreign resident” is complex
Explain that fraud can happen at any time in a policy life cycle
Provide view of facultative and claim experiences
Discuss that there may be anti-selective reasons to purchase a U.S.-based policy
What is a foreign national?
U.S. citizen residing in another country
Non-U.S. citizen, “green card” holder, residing in U.S.(resident alien)
Non-U.S. citizen, not “green card” holder, not residing in U.S. (non-resident alien)
U.S. citizen, resident alien, or non-resident alien travelling outside the U.S.
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Treaty language
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2015 lawful permanent residents
www.dhs.gov/immigration-statistics/visualization/2015
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2015 nonimmigrant admissions
www.dhs.gov/immigration-statistics/visualization/2015© 2017 Munich American Reassurance Company. All Rights Reserved 6
Visa types – there are hundreds!
Insured with one of the following VISA types will generally be considered for coverage, based on the country of origin.
• H1 - B – Temp. Specialty Workers – Special Ability• H2 - A/B – Temp Workers – General Labor (Individual Consideration)• B1/B2 – Visitor Business/Tourist/Medical Treatment (Individual Consideration)• E1 / E2 - Treaty Trader/Treaty Investor • K1 / K2 - Fiancée or Fiancé of US Citizen / Child of K1 • L1 / L2 – Intra-company Transferee / Spouse or Child of L1 • O - - Temporary Worker with Extraordinary Ability • V1 / V2 - Spouse / Child of a Legal Permanent Resident
Intentions of insured must be to remain in the US for the foreseeable future, i.e. 24 months. If intention is to remain in US for less than 24 months, follow Residence Guides.
Student VISAS (F1,M1,J1) will be considered on a case-by-case basis. Illegal aliens or individuals in the US on asylum are generally not accepted.
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Why do foreign citizens want a U.S. policy?
Stable currency
Politically and economically stable
Privacy/confidentiality concerns
More competitive markets
More options/lower cost
More capacity
More product offerings
Options/benefits
Tax reasons
More open market
Anti-Selection??
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• Obtainment and verification of evidence
• Medical
• Financial
• Others (MVR, etc.)
• Pricing
• Regulatory
• Fraud
Where’s the risk?
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Foreign risk cases as percentage of all cases
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Total facultative foreign risk cases
3.0%2.8% 2.9%
3.5%3.3%
2.3% 2.3% 2.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2009 2010 2011 2012 2013 2014 2015 2016
Comparison of foreign risk cases to all cases
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Average face of foreign risks to all cases
2009 2010 2011 2012 2013 2014 2015 2016All Life Cases $1,693,247 $1,936,334 $1,695,258 $1,796,316 $1,709,633 $1,574,320 $1,680,116 $1,875,614Foreign Risk $2,772,336 $3,006,327 $2,652,239 $2,541,588 $1,904,161 $2,085,305 $2,828,858 $3,319,777
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Aver
age
Face
Am
ount
Ratings as a percentage of all foreign risk cases
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Foreign risk ratings
62.80% 65.38% 65.85% 63.93%70.24% 70.66% 70.59% 69.77%
3.33% 1.26% 2.00% 1.78%0.93% 1.22% 1.53% 1.41%
27.50% 29.19% 28.25% 30.79%26.45% 27.21% 26.80% 27.74%
6.37% 4.17% 3.90% 3.50% 2.38% 0.91% 1.08% 1.08%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014 2015 2016
Standard Rated Decline/Postpone Pending
Munich Re global presence
•Sydney•Melbourne•Auckland
•Munich•Milan•Malta•Madrid•London•Paris•Moscow
• Sao Paolo• Santiago• Mexico City• Buenos Aires• Bogotá• Caracas
•Singapore•Hong Kong•Beijing•Shanghai•Mumbai•Tokyo•Seoul•Kuala Lumpur•Taipei City•Calcutta•Dubai
Asia Latin America
AustraliaEurope
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Around the world
•Drug cartels / homicides•Ease of finding bodies•Documentation•Corruption
•Age discrepancies• Identification of bodies• Immature records system/ documentation
•Privacy laws•Large population of immigrants without documentation
•Human trafficking• Identification of bodies• Immature records system/ documentation
Asia Europe
LatinAmericaAfrica
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Frequently asked questions
Are we seeing an increase in foreign deaths?
Yes
What countries are we seeing associated with foreign deaths?
We have had deaths from over 150 countries since January, 2006.
Where in the world?
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Where in the world - count
Top 12 foreign death claims by lives
15
12
18
22
23
36
39
49
62
57
49
100
22
36
30
28
45
45
76
70
70
79
114
124
- 20 40 60 80 100 120 140
United KingdomVietnam
AfghanistanTaiwanGuam
Bahama IslandsIndia
CanadaHong Kong
ChinaPhilippine Islands
Mexico
2011-2016 2006-2010
2006-2010: 812 lives 2011-2015: 1,234 lives - an increase of 52%Count for 2016 is 250 lives
Largest increases: Vietnam 200% Philippines 133% Guam 96% India 95% Afghanistan 67%
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Location of death, by continent
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2016 U.S. non-natural deaths abroad(843 total deaths)
Americas60%
Australasia/Pacific3%
Africa4%
Asia17%
Europe13%
Middle East & Israel3%
Source: U.S. State Department
Causes of death
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2016 U.S. non-natural deaths abroad(843 total deaths)
Air Accident, 1.0%
Drowning, 19.0%
Drug-related, 2.0%
Homicide, 17.0%
Other Accident, 14.0%
Suicide, 17.0%
Terrorist Action, 2.0%
Undetermined/Unknown, 1.0%
Vehicle Accident - Auto, 17.0%
Vehicle Accident - Bus, 1.0%
Vehicle Accident -Motorcycle, 5.0%
Vehicle Accident - Other, 1.0%
Vehicle Accident -Pedestrian, 3.0%
Source: U.S. State Department
Foreign death claims by insured’s attained age
0
100
200
300
400
500
600
0 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 - 79 80 - 89 90 - 99
Munich Re Claims: 2006 - 2015
Age at Death
# D
eath
s
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Munich Re claims
Foreign death claims by cause of death
CIRCULATORY SYSTEM27%
NEOPLASMS23%
EXTERNAL INJURY POISON18%
ILL-DEFINED15%
RESPIRATORY SYSTEM5%
INFECTIOUS AND PARASITIC3%
DIGESTIVE SYSTEM2%
Other7%
Causes of Death
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Key takeaways
A foreign risk is complex can be viewed differently
Prevalence of foreign resident risks have remained stable, but the amounts are increasing
Understand “where the risk’ lies with these insureds
Fraud can occur at the time of application or many years later
The world is getting smaller but foreign deaths are still a challenge
Don’t automatically assume policies cannot be contested after two years
Fraudsters may have spent many years and significant money planning their schemes
Look beneath the surface facts—verify the information AND its sources
Understand why a US policy was desired if a foreign national is involved
Know the customs and practices of the areas involved
Secure knowledgeable resources to investigate and listen to their advice—a cursory investigation will only spot the obvious frauds
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Knowledge
Expertise
Expanding Insurability
EDGE
Competitive underwriting
Capacity
Turn to us first!
Foreign risk
Chris Regione, FALU, FLMI, FLHC
(312) 863-8252
Kevin Glasgow, FLMI, FLHC
(770) 350-3368