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AvocationsMaintaining our Competitiveness

Sue Haviland, CLU, ChFC, FALUManaging Senior Underwriting Director

Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02116 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. © 2013 John Hancock. All rights reserved. MLINY051313080

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Agenda

• Approach to Avocations• Mountain Climbing• Scuba Diving• Aviation• Motor Vehicle Racing• Avocation Questionnaire• Questions

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Our Approach to Avocations

• Staying abreast of changes in avocations, e.g., new activities, popularity of various avocations, etc.

• Maintaining our competitiveness

• Adjusting our underwriting guidelines to address safety improvements, experience, industry trends

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What’s New?

• Recently made changes to:– Mountain Climbing

– Scuba Diving

– Aviation

– Motor Vehicle Racing

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Mountain Climbing

• New guidelines:– Rock climbing any difficulty:

• Possible Standard, to Yosemite Decimal System (YDS) class 5.9

– Ice/snow climbing:• Reduced ratings in North America

– Cliff and rope climbing:• In several categories over 100 feet,

possible Standard to YDS class 5

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Mountain Climbing (cont’d)

• Continued improvements:– More competitive guidelines in some areas

– Shift in the underwriting focus more to elevation and difficulty including climbing grades, locations, peak elevations

– Consider health and other co-morbid risks

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Case Study #1

• 38-year-old female • $2,000,000 VUL• Medically Super Preferred• Climbing for 20 years • Plans to attempt Mt. Rainier this year• Member of climbing club• Attempts one climb every 2 years

• How do we now see?

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Case Study #1 (cont’d)

• Mt. Rainier – 14,411 feet• YDS – 5.8• Preferred, with a $3.50 per thousand flat extra

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Scuba Diving

• Now possible Standard to greater depths

• Improved ratings for wreck diving for divers who do not penetrate the wreck

• Added a “free diving” category to reflect this growing sport

• Technical diving is now more accurately stratified, resulting in lower ratings for some divers and higher for others

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SCUBA (cont’d)

• Experience counts

• To better reflect mortality risk, John Hancock’s approach now driven by certification rather than by focusing primarily on depth

• Also recognizing “vacation only” participation

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Case Study #2

• 56-year-old male • $5,000,000 Term• Medically Preferred • Certification – Advanced Open Water Diver • Belongs to diving club• Dives per year – 35, maximum depth 65 ft.• Participates in night diving and non-penetration

wreck diving

• How do we now see?

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Case Study #2 (cont’d)

• Medically Preferred• Would not rate for scuba diving avocation

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Aviation

• For student pilots, possible Preferred with flat extra for aviation, if regular criteria are met

• Super Preferred with an aviation exclusion

• Ages 21-74

• Consideration given to co-morbid medical and non-medical risks that may impact ultimate underwriting decision

• Our guidelines now reflect industry approach to aviation risk while still maintaining our competitive position

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Case Study #3

• 48-year-old male• $2,500,000 UL• Medically Preferred due to cholesterol levels• Airplane – Cessna 172• Student Pilot – 50 hours of instruction• Clean MVR, no CAD, CVA

• How do we now see?

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Case Study #3 (cont’d)

• We would offer Preferred with a $3.00 flat extra per thousand

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Motor Vehicle Racing

• Updated guidelines to more accurately reflect mortality

• Examples of safety improvements:– Track safety – better barriers, expanded run-off areas

and increased regulations– Driver safety – e.g., HANS (Hand and Neck Support)

device, 5/6 point harnesses, fire suppression, etc.– Car design – crumple zones, fuel cells, seats, roll cages

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Case Study #4

• 41-year-old male • $5,000,000 of UL• Medically Preferred due to family history• Avocation Questionnaire• Member – Sports Car Club of America (SCCA)• Amateur – 8 race weekends yearly• Closed course – max speed 90 mph, average 52 mph• Car – Sports 2000

• How do we now see?

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Case Study #4 (cont’d)

• We would now offer Preferred with no flat extra• Previously $2.50 per thousand flat extra

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Avocation Questionnaire

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Questions?