report on the lump sum experience investigation 1998 · • mortality for annuitants, durations 1...

REPORT ON THE LUMP SUM EXPERIENCE INVESTIGATION

1998-99

Prepared by The Life Risk Insurance Committee

G. Barn BSc(Hons), AIAA P. Berry Bec, ASIA, FIAA

A. Brien BEc GMQ FIAA FNZSA (Convenor) H. Bui BEc, FIAA F. Burgess FIA

P. Chan BSc FIAA S. Clarke BTech(Hons), FIAA

C. Hui BSc, FIAA R. Knight BSc(Hons), DipSM, FIA, FIAA

D. Longden BA(Hons), FIA, FIAA A.T. Mak MEc FIAA

D. Service FIA, ASA, FIAA S. G Turner BEc, FIAA

G. Whittaker MA FIA FIAA

October 2004

This paper has been prepared for issue to, and discussion by, Members of the Institute of Actuaries of Australia’s (IAAust). The IAAust Council wishes it to be understood that opinions put forward herein are not necessarily those of the IAAust and the

Council is not responsible for those opinions.

2004 Institute of Actuaries of Australia

The Institute of Actuaries of Australia Level 7 Challis House 4 Martin Place

Sydney NSW Australia 2000 Telephone: +61 2 9233 3466 Facsimile: +61 2 9233 3446

Email: [email protected] Website: http://www.actuaries.asn.au

2 1998-99 Lump Sum Experience Investigation

ACKNOWLEDGMENTS The Institute of Actuaries of Australia Life Risk Insurance Committee wishes to thank the following organisations for their contributions of data to the IAA Lump Sum Experience Investigation. AXA

Australian Casualty & Life AXA

MLC MLC Life Australian Eagle Life

AMP AMP Life Limited GIO Personal Investment Services

CommInsure The Prudential Assurance Company

Asteron Royal & Sun Alliance Life Assurance Tyndall Life Insurance Company

Tower Tower Life Australia Limited

ING Suncorp Insurance and Finance Norwich Union Life Australia

The production of an experience investigation takes both time and money and the Institute wishes to thank the various organisations and individuals for their financial and personal support of the IAA 1998-99 Lump Sum Experience Investigation. These financial and data contributions are in the public interest to support life insurance pricing and other practices. Finally, the Institute wishes to acknowledge and thank Macquarie University for the services provided as part of this Investigation.

1998-99 Lump Sum Experience Investigation 3

CONTENTS PAGE 1. EXECUTIVE SUMMARY.................................................................................................... 5

1.1. Scope of the report .............................................................................................................. 5 1.2. Key features: Non-annuitant mortality................................................................................ 5 1.3. Key features: Trauma .......................................................................................................... 5 1.4. Key features: TPD............................................................................................................... 5 1.5. Key features: Sums insured experience .............................................................................. 6 1.6. Key features: Annuities....................................................................................................... 6 1.7. Closing remarks................................................................................................................... 6

2. INTRODUCTION.................................................................................................................. 8 2.1. Basis for the report .............................................................................................................. 8 2.2. Previous reports and comparability..................................................................................... 9 2.3. Provision of data................................................................................................................ 10 2.4. Disclaimer ......................................................................................................................... 11

3. THE DATA.......................................................................................................................... 12 3.1. Death Only Cover.............................................................................................................. 12

3.1.1. Death Only: The data by policy type and age ............................................................. 12 3.1.2. Death Only data by policy type and year of investigation .......................................... 14 3.1.3. Death Only: The data by sex ....................................................................................... 15 3.1.4. Death Only: The data by underwriting basis............................................................... 16 3.1.5. Death Only: The data by HIV testing status ............................................................... 16 3.1.6. Death Only: The data by smoking status .................................................................... 16 3.1.7. Death Only: The data by duration ............................................................................... 18

3.2. Trauma Cover.................................................................................................................... 20 3.2.1. Trauma: The data by age............................................................................................. 20 3.2.2. Trauma: The data by year of investigation.................................................................. 20 3.2.3. Trauma: The data by sex ............................................................................................. 20 3.2.4. Trauma: The data by smoking status........................................................................... 20 3.2.5. Trauma: The data by duration ..................................................................................... 21 3.2.6. Trauma: The data by cause of claim ........................................................................... 21

3.3. Total and Permanent Disablement (TPD) Cover .............................................................. 22 3.3.1. TPD: The data by policy type and age ........................................................................ 22 3.3.2. TPD: The data by sex .................................................................................................. 23 3.3.3. TPD: The data by smoking status ............................................................................... 23 3.3.4. TPD: The data by duration .......................................................................................... 23

3.4. Immediate Annuities ......................................................................................................... 25 3.4.1. Annuitant data by age.................................................................................................. 25 3.4.2. Annuitant data by annuity type and sex ...................................................................... 25

3.5. Classification of the data for calculation of exposed-to-risk............................................. 27 3.6. Data integrity..................................................................................................................... 27

4. RESULTS OF THE INVESTIGATION.............................................................................. 29 4.1. Policies with Death Only cover......................................................................................... 29

4.1.1. Comparison of volume of data with earlier investigations ......................................... 29 4.1.2. Delay in notification and estimation of understatement of death claims for non-

annuity policies, Death Only cover ............................................................................. 30 4.1.3. Mortality differences between policy types ................................................................ 30 4.1.4. Trends in life insurance mortality ............................................................................... 32 4.1.5. Mortality experience by sums insured ........................................................................ 34 4.1.6. The effect of selection on mortality ............................................................................ 35 4.1.7. Range of mortality for the contributing offices........................................................... 36


4.1.8. Female vs male mortality for insured lives ................................................................. 37 4.1.9. Smoker and non-smoker mortality.............................................................................. 38

4.2. Trauma policies ................................................................................................................. 40 4.2.1. Volume of data ............................................................................................................ 40 4.2.2. The basis of the trauma analysis ................................................................................. 40 4.2.3. Trauma experience by calendar year........................................................................... 40 4.2.4. Effect of Selection on Trauma .................................................................................... 41 4.2.5. Experience by age ....................................................................................................... 41 4.2.6. Female vs male trauma experience ............................................................................. 42 4.2.7. Smoker and non-smoker trauma experience ............................................................... 42 4.2.8. Experience by major causes of trauma claim.............................................................. 42 4.2.9. Trauma experience by sums insured vs policy count.................................................. 44 4.2.10. Trauma experience by contributing offices................................................................. 44

4.3. Total and Permanent Disablement (TPD) policies............................................................ 45 4.3.1. Some comments on the data........................................................................................ 45 4.3.2. The effect of selection on TPD ................................................................................... 45 4.3.3. Female vs Male TPD Experience................................................................................ 46 4.3.4. Smoker vs non-smoker TPD experience..................................................................... 47

4.4. Immediate annuities .......................................................................................................... 49 4.4.1. Exposure...................................................................................................................... 49 4.4.2. Benchmark mortality................................................................................................... 49 4.4.3. Results by sex and duration......................................................................................... 49 4.4.4. Results by sex and age ................................................................................................ 50 4.4.5. Comparing against another benchmark mortality ....................................................... 51 4.4.6. Mortality trend............................................................................................................. 52 4.4.7. Qualifications .............................................................................................................. 52

5. BIBLIOGRAPHY ................................................................................................................ 53


1. EXECUTIVE SUMMARY

1.1. Scope of the report

This report, covering the calendar years 1998 to 1999, analyses the experience of Australian personal insurance business for both annuitant and non-annuitant mortality, and, for the second time, trauma benefits and total and permanent disability (TPD). As a result it has been renamed “Lump Sum Experience Investigation” from the previous title “Mortality Investigation”. Table 1: The volume of data included in the report by type of cover. Period of

investigation; 1998 and 1999. Type of Cover Policy Years Exposed-To-Risk Claims / DeathsDeath Only 3,500,000 16,390Trauma 493,000 794TPD 573,000 332Annuity 42,000 903 1.2. Key features: Non-annuitant mortality

• Mortality improvements of about 2.7% p.a. for males and 1.5% p.a. for females from 1990-92 to 1998-99, but with marked variation by policy type.

• Overall mortality for policies, durations 2 years and over, of 90% of IA95-97 M for males and 95% of IA95-97 F for females, again with marked variation by policy type.

• Some evidence of a 5-year selection effect for reviewable term insurance for females and more so for males.

• A smoker/non-smoker ratio of similar magnitude for males (193%) and females (191%) for the first time but with sparse data for female smokers.

• Wide variation in experience between offices. 1.3. Key features: Trauma

• Claim rates in respect of all traumas combined did not show any identifiable trends over the four years 1995-99.

• Unlike death cover, there is no evidence of selection for trauma cover. Higher than expected claim rates were observed for cancer claims in the early policy durations, and this is true especially among females. While heart attack claims were relatively fewer in number, there appears some anti-selection amongst males within the first policy year.

• In aggregate, females do not have significantly different claim rates for trauma to males • Of the four leading traumas (cancer, heart attack, bypass surgery, stroke) in the Australian

population, cancer continues to produce higher than the average rate of actual to expected results in insured lives experience

• The smoker to non-smoker ratio is 147% for males and 139% for females however these results are not statistically significant (standard error of 44% and 43% respectively), therefore it is not possible to conclude from this that smokers have heavier morbidity than non-smokers.

1.4. Key features: TPD

• The investigation does not consider the interaction of TPD and trauma riders. • A significant drop in the Actual/Expected ratios over the previous investigation


• Evidence of a 3-year selection period with the selection effect being much less than in the previous investigation as ultimate rates are much lower.

• Female morbidity, at durations greater than 2 years, is about 72% of male morbidity, but these results have not been standardized for occupation.

• Smoker/non-smoker ratio of 269% for males and 373% for females, with high standard errors due to the very small number of smoker claims for both sexes.

1.5. Key features: Sums insured experience

As with the previous investigation, actual to expected claim ratios by sum insured are lower than those by policy count for death, Trauma and TPD, possibly reflecting the more stringent underwriting procedures for larger sums insured policies. 1.6. Key features: Annuities

• Mortality for annuitants, durations 1 year and over, is 59% of IM80 and 56% of IF80 for males and females respectively with continued strong self-selection in the first policy year.

• The results by age suggest that a steeper mortality curve may be more appropriate but data is limited. IM80/IF80 base table is not a good benchmark, likely to revise in future investigations.

• Mortality trends show little change for males and modest improvement for females but again changes in data collection and the limited volumes of data available make these questionable.

1.7. Closing remarks

The collection and analysis of insured lives experience is increasingly important to the Australian life insurance industry as it comes under greater scrutiny and challenge to the appropriateness of its pricing practices and the right to underwrite. Application of such analyses is not limited to pricing and underwriting but also includes reserving, product design, solvency standards and international comparisons. In Australia the statistical justification for risk classification structures by common rating factors such as age, sex and smoker status may well depend on the adequacy of investigations such as this. In the last investigation the then Mortality Committee, from which this new committee has evolved, urged the Appointed Actuaries of all life offices to continue (or begin) to contribute data in order to maintain the credibility and usefulness of this investigation. It remains particularly important, firstly, to maintain consistent participation levels in order for meaningful time trends to emerge, and secondly, to achieve greater coverage of expanding markets, for example, annuities. The lower exposure in this report compared to the 1995-97 investigation is in part due to the shorter investigation period but also is a result of a change in the data being contributed, the new investigation data format and the withdrawal of a number of life offices from this investigation. The decreasing participation and the low priority put on the provision of data for this investigation is extremely disappointing and is a challenge that the newly formed Life Risk Insurance Committee has been contemplating. We are keen to find ways that increase the value of this and other investigations we conduct and to facilitate the provision of data in the easiest, timely manner. The changing nature of our industry means that the structure and format of this investigation needs to be under continuous review.


The need to be able to provide credible and reliable results on industry experience is critical to our industry’s ability to meet its obligations under Section 46 of the Disability Discrimination Act (“discrimination is based on actuarial or statistical data on which it is reasonable to rely”). This led to the production of the paper “Actuarial Statistics for Life Insurance” in November 1994 by an earlier incarnation of this committee, the Risk Classification Committee, and the production of a brochure “An Equitable System for All”. With the increasing focus by other interested groups on the basis on which insurance is priced, there is increasing need to be able to demonstrate the appropriateness of current practices. Voluntary participation of the full industry is our ideal and the timely production of valuable information is our goal. Without the support of all industry players however, both of these will fail to be achieved. Finally, as was commented on in the last report, the wide range of experience between offices and the low numbers of claims in some classes of business indicate that care is needed in using the aggregate industry results of this report.


2. INTRODUCTION

2.1. Basis for the report

This report presents the final results of the Institute's investigation into the experience of Australian “personal” (or “individual”) lump-sum and annuity business in the two calendar years 1998-1999. This period represents a trade off between wanting to provide an update to the previous investigation, indicating mortality and morbidity trends and the availability of data from which the results can be derived. The fluctuations that can occur from year to year in the claims from certain causes and the lack of credibility that results from the decreasing volume of data is clearly evident. Generally speaking, coverage of the investigation is of retail (as contrasted with wholesale) insured lives and annuitant business, and consequently most non-annuity policies have been subject to some form of underwriting. Unlike earlier investigations that covered only “death only” and annuity risks, this investigation, as the immediately previous one, covers:

• trauma risks • total and permanent disablement (TPD) risks • policies which only cover the death risk (“death only”) • immediate annuity policies (including those with or without a “guaranteed” period and also

joint life annuities, but excluding “term certain” policies). The areas that are not covered in this investigation, and which still remain to be considered as to how they should be treated in future investigations, are:

• the death element of policies with trauma risks • the death element of policies with TPD risks • the interaction of trauma and TPD risks.

With the changing nature of the business written in the industry these aspects may impact on the results of this investigation as payments for Trauma and TPD remove risks from the exposure before they become death claims and Trauma claims remove risks from the exposure before they become TPD claims. This is the second time the revised data specifications, which are attached as Appendix C, have been used. The Appendix includes descriptions of the various data codes and classifications used, for example, underwriting codes. As with the previous investigation, individual policy data have been collected. Prior to this contributing offices provided summarised policy tabulations and individual claims. A more powerful computer has been used to edit and analyse the much greater volumes of data. Both the expansion of the types of risk collected and the introduction of individual policy data, have allowed more comprehensive analyses. Detailed analyses have been included as appendices, for convenience, and are commented upon and summarised in the body of the report. Wherever possible, requests from Institute members at workshop seminars (particularly the November 1998 Life Insurance Forum) for new analyses have been included. However, more specific feedback is now sought from members so that the most useful analyses can be provided in future. This was done at the Financial Services Forum both in August 2000 and again in August 2004 and will be followed up with a participants’ workshop in November 2004.


We believe that the following are worth highlighting:

• Experience Investigations should be published in a timely manner if they are to be of value in pricing, valuation and product design. To achieve this data needs to be contributed in a ongoing process and given adequate priority as the report is subject to the slowest contributor.

• If the report is to have any credibility the data on which it is based must be complete, comprehensive and accurate. If adequate attention is not given to the provision of data to the investigation and errors are found only when reporting results back to the contributing offices then the results of the report are worthless.

• The industry investigations allow contributors to access comparative information about their experience relative to the industry and to request investigation into aspects of the business they consider important. The investigation is as much a tool for the industry as a summary of its performance.

The new Committee has only just commenced activity and this represents its first experience investigation report, with a Morbidity Investigation into Disability Income experience also underway. The previous Mortality Committee published an up-to-date insured lives graduated mortality table “IA 95-97” in 2001 to replace the previous table “IA 90-92”. Some consideration needs to be given as to what period and when the next updated table should be produced. There was also a desire expressed in the previous report to conduct a separate analysis of non-standard (medically loaded) lives when sufficient data have been collected but this has not yet been achieved and is something we will continue to strive for when the data allows. 2.2. Previous reports and comparability

The previous reports from the Mortality Committee, which are relevant to this report, are: REPORT RELEASE DATE Report on the Mortality Investigation 1990-1992 March 1994 Mortality Investigation IA 90-92 M and F, Release of Graduated Mortality Tables

March 1994

Report on the Mortality Investigation 1992-1994 June 1996 Sub-Standard Lives Experience Mortality Investigation 1990-1994

May 1997

Report on the Mortality Investigation 1995-1997 June 1999 TPD Experience by Occupation and Gender November 2000 Graduated Mortality Tables 95-97 M & F April 2001

The full publication details of each report are provided in the Bibliography. Analyses in this report have been prepared to provide results that can be compared with previous report analyses wherever possible, and thus indicate trends. However there are some limitations to complete comparability, and the following practical constraints should be noted.


• Product type popularity has waxed and waned (for example, whole life and endowment, unbundled, temporary insurances (premiums guaranteed), temporary insurances (premiums reviewable), trauma insurance). Because of this, selection effects differ for each product type, and comparisons between products require care.

• Contributing office data are not completely continuous as some offices have dropped out, others have commenced more recently and others have omitted some years of data (please refer to previous reports and §2.3 of this report).

• Underwriting policy (and standards) change over time, and the mix of business sold and in-force is changing with regard to underwriting classifications (e.g. non-medical, medical, limited underwriting, and so on).

• The 1998-99 aggregate experience by policies (including all policy types and underwriting classifications) is not comparable with that for 1990-92, 1992-94 or 1995-97. However, sub-classifications (for example, by product type) are reasonably comparable over time.

The graduated IA95-97 M & F mortality table (IAA Mortality Committee, 2001) has been used as a benchmark for measuring the current 1998-99 insured lives’ mortality experience. IM80/IF80 (Continuous Mortality Investigation, 1990) has been used for annuities. Comparability is facilitated by using these standard benchmarks. In addition, the scope of the investigation has been maintained to cover:

• Some analyses by sums insured have been performed. • The annuitant investigation, which has been kept quite separate, includes a small group of

joint life business.

Various product types and underwriting categories are included in the investigation, notably a range of new “underwriting” categories, including group continuation and guaranteed insurability options, conversions, and no underwriting, which were added from 31 December 1994, and master trust policies, which were added in November 1997. As the volume of data is still somewhat limited, no detailed investigation of results has been conducted. 2.3. Provision of data

The report is based on data provided by ten offices covering thirteen portfolios of business. Three of these portfolios consisted of only a small amount of claims data with no exposed-to-risk (one of these consisted of only three claims). In contrast five offices each had an average contribution exceeding 100,000 policies in force per census and two more provided over 100,000 policies for the one year of their contribution. Six offices provided data for the full two- year period, four offices for one of the two years. Table 2.3.1: Number of offices contributing data for each of the policy types in the report,

by calendar year and in total by year of investigation. Policy Type No of Offices by Year

1998 1999 1998-1999 (i) Whole of Life 7 7 7 (ii) Unbundled 7 7 7 (iii) Guaranteed term 5 5 5 (iv) Renewable term 10 10 10 (v) Annuities 4 4 5


It is hoped that in the future greater market coverage can be achieved, as this would improve the significance of the results. The results have been based on standard lives, where "standard" refers to the assessment basis. Standard lives represent around 95.3% of all the in force business. 2.4. Disclaimer

The Life Risk Insurance Committee and Macquarie University have endeavoured to ensure the accuracy of the data on which this report is based and to provide a useful interpretation of the results. Nevertheless, neither the Life Risk Insurance Committee or Macquarie University can accept any responsibility for errors or for the use or misuse of any information in this report. Actuaries and others using the results should exercise professional care and judgment in ensuring that they are suitable for the intended purpose.


3. THE DATA

In earlier reports the statement has been made that the investigation is based on policies, rather than on lives. This statement, originally referring to the ownership of multiple policies by one life, is now a little ambiguous. Today, a significant number of policies have multiple lives attached to them, for example, joint annuities which normally have two lives and also a number of life policies where family groups are recorded under the one policy number. The Investigation has, in the case of life policies since 1989 and for annuities since 1994, allowed for the exposure of multiple lives under a single policy, provided that sufficient detail was held on each such life. Under the specifications, offices submitted individual policy details, including policy type, sex, underwriting basis, sum insured, postcode, HIV testing status, smoking status, cover and loading for death, trauma and TPD risks, and occupation for TPD cover. Only one sum insured was collected for each policy; where more than one risk was covered, the sum insured collected was that for the first risk covered in order of death, trauma or TPD. This is a shortcoming, which may be corrected in future to provide an improved analysis by sums insured of trauma and TPD risks. For the purposes of this report, the data have been subdivided into the following risk categories:

• Policies with Death Only cover • Policies with Trauma cover • Policies with TPD cover • Immediate annuities.

While the first category excludes the second and third categories, the Trauma and TPD categories are not mutually exclusive. This report covers “standard” lives only. A “standard” life is defined within each risk category as having zero loading for that risk. For example, a policy with Death Only cover is “standard” if it has zero medical loading for death. Of course, the concept of a “standard life” does not apply to annuity data. The policy types used in the investigation include the following:

(i) Whole of life and endowment insurances, both with and without term insurance riders (ii) Unbundled policies, both of the capital guaranteed and investment-linked kinds,

carrying significant death risk (iii) Temporary insurances where premiums are fully guaranteed; the sums insured may be

level or reducing (iv) Temporary insurances where the premium rate may be reviewed (v) Immediate annuities.

Individual Master Trust data were submitted by only one office and for reasons of confidentiality cannot be included in this report. When three or more offices are able to submit this type of data, an analysis of the aggregated Master Trust data will be produced. 3.1. Death Only Cover

3.1.1. Death Only: The data by policy type and age Table 3.1.1 shows the proportions of exposed-to-risk and claims over the period 1998-99. Whole of life and endowment policies, or policy type (i), constitute about 60% of policies exposed-to-risk and 90% of claims by number. This is similar to the previous report and reduced from about two-


thirds of the exposed-to-risk in the 1992-94 period. These policies continue to be an ageing portfolio with an average age, weighted by the exposed-to-risk, of 47 years, compared with average ages of 39 to 43 years for policy types (ii), (iii) and (iv). Moreover, 17% of these whole of life and endowment policies are for lives aged 60 or more, compared with less than 2% of unbundled and term policies. This preponderance of older lives in policy type (i) is clearly seen in Figure 3.1.1 which shows the distribution of life policies by policy type and age. The other three life policy types are largely confined to the age range 15 to 65 years. The distribution by sums insured presents quite a different picture. Here, term insurances with reviewable premiums make up 71.5% of the exposed-to-risk and close to 60% of the claims, reflecting the relatively high level of sales of these policies in the last decade (and larger average sums insured). Whole of life and endowment policies reduce to only 14% of the exposed-to-risk and 31% of the claims by sums insured, largely an effect of the ageing portfolio, and the relatively small sums insured, dominating this type of business which has declined in popularity for many years. Table 3.1.1: Number and percentage of exposed-to-risk and claims for standard lives by

policy type for Death Only cover. POLICY TYPE EXPOSED-TO-RISK % CLAIMS %

Policies (i) 2,101,809 60.1 14,729 90.0 (ii) 442,355 12.6 451 2.7 (iii) 35,916 1.0 59 0.4 (iv) 920,657 26.3 1,133 6.9

Total 3,500,737 100.0 16,372 100.0 Sums Insured $ $

(i) 34,225,247,580 14.0 90,911,741 30.5 (ii) 33,371,737,598 13.6 27,280,461 9.2 (iii) 2,085,437,089 0.9 2,786,497 0.9 (iv) 174,966,940,195 71.5 176,887,025 59.4

Total 287,112,369,880 100.0 333,332,315 100.0


Figure 3.1.1: Numbers of policies exposed-to-risk, Death Only cover, by policy type and age in the period 1998-99

0

20000

40000

60000

80000

100000

120000

0-4 10-14 20-24 30-34 40-44 50-54 60-64 70-74 80-84 90-94

Age Group

Expo

sure

(Life

Yea

rs)

WoL/Endowment Reviewable Term Unbundled Gteed Term

Figure 3.1.2: Sums insured exposed-to-risk ($millions), Death Only cover, by policy type in

the period 1998-99

0 20000 40000 60000 80000 100000

120000

140000

160000

180000

200000

WoL/Endowment

Unbundled

Gteed Term

Reviewable Term

Exposure (Sums Insured) $m

The age distribution of the sums insured exposed-to-risk for policies with Death Only cover can be found in Appendix A.

3.1.2. Death Only data by policy type and year of investigation Table 3.1.2 shows the proportion of new policies by policy type for each year of the investigation. The change in mix between 1998 and 1999 is partly due to different companies providing data


between the two years and also an apparent trend away from stand alone death only risk policies (type (iv)) to those provided through unbundled products (type (ii)). Table 3.1.2: Number and percentage of new policies exposed to risk (curtate duration 0)

for standard lives, Death Only cover, by policy type and year of investigation 1998 1999

POLICY TYPE EXPOSED-TO-RISK % EXPOSED-TO-RISK %Policies

(i) 4,639.5 6.1 3,732.5 5.4(ii) 9,505.0 12.5 12,118.5 17.5(iii) 94.5 0.1 15.0 0.0(iv) 61,883.5 81.3 53,429.5 77.1

Total 76,122.5 100.0 69,295.5 100.0Sums insured

(i) 322,091,775 1.9 246,276,154 1.5(ii) 1,413,995,350 8.4 1,896,656,486 11.7(iii) 8,180,939 0.1 1,228,000 0.0(iv) 15,070,425,707 89.6 14,142,085,480 86.8

Total 16,814,693,771 100.0 16,286,246,120 100.0

3.1.3. Death Only: The data by sex Data were subdivided by sex (Male, Female, and Undifferentiated). Policies classified as “Undifferentiated” are almost entirely older policies on male lives. For the purpose of this report the “Undifferentiated” category has been included with “Males”. Table 3.1.3: Number and percentage of exposed-to-risk, Death Only cover, and death

claims for standard lives by sex and policy type POLICY TYPE EXPOSED-TO-RISK % CLAIMS %

Male Policies (i) 1,580,963.0 64.0 12,709 91.1 (ii) 296,631.0 12.0 351 2.5 (iii) 19,407.0 0.8 39 0.3 (iv) 571,872.5 23.2 852 6.1

Total 2,468,874 100.0 13,951 100.0 Female Policies

(i) 520,846.0 50.5 2,020 83.5 (ii) 145,724.0 14.1 100 4.1 (iii) 16,508.5 1.6 20 0.8 (iv) 348,784.5 33.8 281 11.6

Total 1,031,863 100.0 2,421 100.0 Male Sums insured

(i) 25,637,431,344 15.0 76,668,986 31.1 (ii) 23,669,613,941 13.9 22,465,614 9.1 (iii) 1,254,554,038 0.7 1,842,710 0.8 (iv) 119,987,546,495 70.4 145,492,651 59.0

Total 170,540,145,818 100.0 246,469,961 100.0 Female Sums insured

(i) 8,587,816,236 11.6 14,242,755 27.7 (ii) 9,702,123,657 13.1 4,814,847 9.4 (iii) 830,883,051 1.1 943,787 1.8 (iv) 54,988,393,700 74.2 31,394,374 61.1

Total 74,109,216,644 100.0 51,395,763 100.0


3.1.4. Death Only: The data by underwriting basis Data were also subdivided by underwriting basis (Minimum Evidence, Non-Medical, Medical, Para-Medical, Group Continuation Option, Guaranteed Insurability Option, Conversion, None, and Unknown). While most offices provided the underwriting basis for most policies, some offices were not able to provide the underwriting basis at all. This accounts for the large proportion of policies coded as “Unknown”. If we can assume these policies with “unknown” underwriting basis have much the same underwriting distribution as policies where the underwriting basis has been coded, the proportion of policies with either “Non-Medical” or “Medical” underwriting is over 95% by both numbers of policies and sums insured. The proportion in the “Unknown” category is lower than in the previous investigation and most likely reflects the difference in contributing companies between the two investigations. Table 3.1.4: Percentage of exposed-to-risk, Death Only cover for standard lives by

underwriting basis, policy type, and sex % EXPOSED-TO-RISK

UNDERWRITING POLICIES SUMS INSURED BASIS MALES FEMALES MALES FEMALES

Min Evidence 0.4 0.5 0.3 0.3 Non-Medical 64.6 68.5 55.4 62.4 Medical 11.7 7.3 14.2 7.6 Para-Medical 0.2 0.3 0.8 1.0 Group Cont 0.1 0.1 0.1 0.1 Guar Insurability 0.7 0.6 1.2 0.6 Conversion 0.4 0.2 0.5 0.3 None 0.1 0.2 0.1 0.1 Unknown 21.8 22.3 27.4 27.6 TOTAL 100.0 100.0 100.0 100.0

3.1.5. Death Only: The data by HIV testing status Data were not analysed by HIV testing status in this investigation.

3.1.6. Death Only: The data by smoking status Data were subdivided by smoking status (Smoker, Non-Smoker, and Aggregate Rating). Both Table 3.1.5 (by policy count) and Table 3.1.6 (by sums insured) provide clear evidence of the trend to smoker rating, particularly for term insurances (types (iii) and (iv)), but also for unbundled business (type (ii)). Traditional business and its term riders, however, are less commonly smoker rated. In comparison with the previous investigation the proportion of smokers has fallen in exposure at durations 0 to 4 (reflecting the population trend), however has increased for durations 5+. This could reflect the rewriting of old smoker business where the policyholder no longer smokes, but could also reflect changes in the mix of contributing companies.


Table 3.1.5: Numbers of policies exposed-to-risk, Death Only cover, and percentage by smoking status, policy type and sex, for both recent and older standard policies

POLICY TYPE

EXPOSED-TO-RISK

SMOKER NON-SMOKER

AGGREGATE TOTAL

% % % %

Males Durations 0 to 4 (i) 31,342.5 4.2 10.5 85.3 100.0 (ii) 48,627.0 23.5 69.5 7.0 100.0 (iii) 1,531.5 16.4 65.3 18.4 100.0 (iv) 340,051.0 19.7 80.0 0.3 100.0

TOTAL 421,552.0 19.0 73.5 7.5 100.0

Males Durations 5 and over (i) 1,549,620.5 0.2 0.6 99.2 100.0 (ii) 248,004.0 6.8 15.8 77.4 100.0 (iii) 17,875.5 8.6 33.5 57.9 100.0 (iv) 231,821.5 16.9 67.0 16.2 100.0

TOTAL 2,047,321.5 3.0 10.2 86.8 100.0

Females Durations 0 to 4 (i) 23,184.5 2.7 8.5 88.7 100.0 (ii) 22,979.0 16.9 75.9 7.2 100.0 (iii) 1,169.0 19.0 73.6 7.4 100.0 (iv) 204,117.0 15.9 83.9 0.2 100.0

TOTAL 251,449.5 14.8 76.2 9.1 100.0

Females Durations 5 and over (i) 497,661.5 0.3 0.9 98.8 100.0 (ii) 122,745.0 7.4 23.9 68.8 100.0 (iii) 15,339.5 6.1 31.0 62.9 100.0 (iv) 144,667.5 14.5 72.2 13.3 100.0

TOTAL 780,413.5 4.1 18.4 77.5 100.0


Table 3.1.6: Sums insured exposed-to-risk ($), Death Only cover, and percentage by smoking status, policy type and sex, for both recent and older standard policies

POLICY TYPE

EXPOSED-TO-RISK

SMOKER NON-SMOKER

AGGREGATE TOTAL

$ % % % %

Males Durations 0 To 4 (i) 2,426,805,244.5 3.9 17.5 78.6 100.0(ii) 6,522,562,197.0 20.9 74.1 5.0 100.0(iii) 127,037,866.5 16.2 65.7 18.1 100.0(iv) 81,831,686,926.0 14.2 85.7 0.1 100.0

Total 90,908,092,234.0 14.4 83.0 2.6 100.0

Males Durations 5 and over (i) 23,210,626,100 0.4 1.4 98.2 100.0(ii) 17,174,051,744 5.8 17.7 76.5 100.0(iii) 1,127,516,172 9.2 42.5 48.3 100.0(iv) 38,146,859,569 12.2 83.3 4.5 100.0

Total 79,632,053,584 7.4 44.7 47.9 100.0

Females Durations 0 to 4 (i) 1,256,804,206.5 2.7 10.4 86.9 100.0(ii) 2,688,826,151.5 14.9 80.5 4.6 100.0(iii) 87,257,092.5 17.7 76.9 5.5 100.0(iv) 37,057,731,415.5 12.3 87.5 0.1 100.0

Total 41,090,618,866.0 12.2 84.7 3.1 100.0

Females Durations 5 and over (i) 7,331,012,030 0.5 1.8 97.7 100.0(ii) 7,013,297,505 6.2 25.6 68.2 100.0(iii) 743,625,959 8.0 43.9 48.1 100.0(iv) 17,930,662,285 11.4 84.2 4.4 100.0

Total 33,018,597,778 7.8 52.6 39.6 100.0

3.1.7. Death Only: The data by duration The risk commencement date was supplied for each policy and claim and used to determine exposure at different policy durations. Table 3.1.7 clearly shows the changing mix of sales by policy type. While policy types (i), (ii) and (iii) have 75% or more of policies exposed-to-risk at duration 5 and over, less than 40% of policy type (iv) are at these longer durations. This reflects the shift to products with reviewable premiums in recent times.


Table 3.1.7: Percentage of exposed-to-risk, Death Only cover, for standard lives by policy type, sex and duration

POLICY PERCENTAGE BY DURATION TOTALTYPE 0 1 2 3 4 5-9 10+ %

Male Policies (i) 0.3 0.3 0.4 0.5 0.5 7.9 90.1 100.0(ii) 5.0 3.7 2.6 2.2 2.9 44.8 38.8 100.0(iii) 0.3 0.9 1.4 2.0 3.3 34.9 57.2 100.0(iv) 12.6 12.8 13.1 11.6 9.4 25.7 14.8 100.0

TOTAL 3.7 3.6 3.6 3.2 2.9 16.7 66.3 100.0Female Policies

(i) 1.4 1.7 1.9 2.2 2.3 19.4 71.1 100.0(ii) 9.9 7.0 4.2 2.9 3.5 42.8 29.7 100.0(iii) 0.5 1.1 1.7 2.7 4.2 38.5 51.3 100.0(iv) 16.8 15.3 13.9 12.2 10.0 24.0 7.8 100.0

TOTAL 13.4 12.0 10.7 9.3 7.9 26.0 20.7 100.0Male Sums Insured

(i) 0.7 0.8 0.9 1.0 1.1 15.4 80.1 100.0(ii) 4.7 3.4 2.4 2.2 3.1 54.1 30.1 100.0(iii) 0.3 0.7 1.2 1.8 3.0 29.7 63.3 100.0(iv) 12.5 12.1 12.3 11.6 10.1 27.6 13.8 100.0

TOTAL 5.2 5.0 5.0 4.7 4.5 25.2 50.4 100.0Female Sums Insured

(i) 1.4 1.7 1.9 2.2 2.3 19.4 71.1 100.0(ii) 9.9 7.0 4.2 2.9 3.5 42.8 29.7 100.0(iii) 0.5 1.1 1.7 2.7 4.2 38.5 51.3 100.0(iv) 16.8 15.3 13.9 12.2 10.0 24.0 7.8 100.0

TOTAL 13.4 12.0 10.7 9.3 7.9 26.0 20.7 100.0


3.2. Trauma Cover

3.2.1. Trauma: The data by age Table 3.2.1 shows the proportions of exposed-to-risk in each age band. Table 3.2.1: Percentage of total exposed-to-risk by age. PERCENTAGE OF TOTAL EXPOSED-TO-RISK Ages attained Males Females Persons 0-16 0.2 0.2 0.2 17-24 1.9 2.2 2.0 25-34 26.3 32.4 29.1 35-44 46.4 47.2 46.8 45-54 22.9 16.9 20.1 55-64 2.3 1.1 1.8 65+ 0 0 0 TOTAL 100.0% 100.0% 100.0%

Not surprisingly, the exposed-to-risk is concentrated in the age range 17 to 65 years because there are restrictions on the minimum issue age and cover expiry ages in the products in Australia. There was a very small percentage exposed at ages 0 to 16, less than 0.5%. Some companies offer trauma policies insuring children. The majority of lives are aged 35-44 years.

3.2.2. Trauma: The data by year of investigation Table 3.2.2 shows the exposed-to-risk and number of claims for each year of the investigation period that are included in the analysis. This report covers the collective experience of nine companies. Three companies (with a total of 109 claims) have been excluded when reporting the results by cause of claim, because they did not record specific cause of claim. Otherwise, data from all companies are included in the following tabulated results. All companies provided data for both years of the investigation. Table 3.2.2 Number of policies exposed to risk and claims by year of investigation YEAR EXPOSED-TO-RISK CLAIMS FOR

4 MAJOR EVENTS*

CLAIMS FOR OTHER EVENTS

TOTAL CLAIMS

1998 244,326.0 185 187 372 1999 248,824.5 198 224 422 Total 493,150.5 383 411 794

* Includes Heart Attack, Cancer, Stroke and Bypass Surgery.

3.2.3. Trauma: The data by sex Of the total number of policy years exposed-to-risk, 54% are male and 46% are female. Claims are similarly distributed in number.

3.2.4. Trauma: The data by smoking status Smokers accounted for 13% of the total number of policy years exposed-to-risk.


3.2.5. Trauma: The data by duration Data were subdivided by the curtate duration at the census date for polices in force and at the date of the trauma event or the date of diagnosis where there is no clearly defined event. Table 3.2.3 shows the percentage of the exposed-to-risk at each duration. Trauma business first appeared in Australia from the mid-1980s and is showing tremendous growth in new business. Hence the business remains concentrated at the short durations. Table 3.2.3: Percentage of exposed-to-risk by sex and duration in years PERCENTAGE (%) OF EXPOSED-TO-RISK BY POLICY DURATION 0 1 2 3 4 5+ Male 20.7 20.1 18.2 15.9 12.6 12.6 Female 20.1 19.7 18.2 16.1 12.9 13.0 Persons 20.4 19.9 18.2 16.0 12.7 12.8

3.2.6. Trauma: The data by cause of claim At present analysis of experience by cause of claim is limited to the four major traumas (cancer, heart attack, stroke and bypass surgery) as these events are expected to produce the most credible numbers. It is disappointing that not all contributing offices can provide detailed cause of claim data. Of all trauma claims, 52% are of cause unknown or other than the four leading causes. This compares to 16% in the 1995-97 investigation. The offices with incomplete cause of claim information, which have been excluded from the cause of claim analysis, represent 27% of total exposure. It should be noted that death claims on a policy to which the trauma acceleration benefit is attached are not included in the statistics for “Other Events” and are also not counted in claims of the “Death Only” section. Similarly, TPD claims where TPD is included as one of the trauma events insured are not counted in “Other Events”, neither are they considered in the “TPD” section of this report. Until such time as a policy becomes a death claim it is part of the exposure for trauma or TPD as it has a trauma acceleration and/or TPD benefit. Note expected claims for trauma and TPD are calculated on the basis of trauma / TPD claims that are not also deaths. These policies would be excluded from the “Death Only” exposure due to the presence of the rider benefits and the claim is not counted in the “Death Only” section. The distribution of trauma claims by major event and sex, for those companies reporting cause of claim, is shown in Table 3.2.4. Table 3.2.4: Number of trauma claims by sex and major event Event ACTUAL NUMBER OF CLAIMS BY SEX AND EVENT Males Females Persons Cancer 124 143 267 Heart Attack 66 6 72 Bypass Surgery 22 0 22 Stroke 16 6 22 Total 228 155 383


3.3. Total and Permanent Disablement (TPD) Cover

3.3.1. TPD: The data by policy type and age Table 3.3.1 shows the exposed-to-risk with TPD cover and TPD claims for both policy count and sums insured by policy type. As with trauma cover, the analyses of TPD cover by sums insured should be treated with caution due to the death sum insured being used as a proxy for the actual TPD sum insured in those policies carrying both death and TPD risks. Figure 3.3.1 shows that the distribution of TPD policies by age is very similar to that for trauma cover. Table 3.3.1: Number, sum insured and percentage of exposed-to-risk, TPD cover, and TPD

claims for standard lives by policy type. Policies ETR % CLAIMS %

(i) 73,388.0 12.8 84 25.3(ii) 117,459.5 20.5 71 21.4(iii) 12,564.0 2.2 8 2.4(iv) 289,092.5 50.5 136 41.0

Other 80,105.5 14.0 33 9.9TOTAL 572,609.5 100.0 332 100.0Sums Insured

(i) 2,075,142,756.0 2.4 1,699,628 7.2(ii) 10,263,535,931.5 11.9 3,636,565 15.4(iii) 1,019,976,659.0 1.2 702,669 3.0(iv) 64,472,320,060.5 74.7 14,607,490 61.9

Other 8,455,874,502.5 9.8 2,964,075 12.5TOTAL 86,286,849,909.5 100.0 23,610,427 100.0 Figure 3.3.1: Total exposed-to-risk for standard lives, TPD cover, by age in the period 1998-

99.

0

5000

10000

15000

20000

25000

30000

0 10 20 30 40 50 60 70 80


3.3.2. TPD: The data by sex Table 3.3.2: Numbers, sum insured and percentage of exposed-to-risk, TPD cover, and all

TPD claims for standard lives by sex. ETR % Claims %

Policies Male 386,234.5 67.5 260 78.3Female 186,375.0 32.5 72 21.7TOTAL 572,609.5 100.0 332 100.0Sums Insured Male 62,881,639,547.5 72.9 18379651 77.7Female 23,405,210,362.0 27.1 5266776 22.3

TOTAL 86,286,849,909.5 100.0 23,646,427.0 100.0

3.3.3. TPD: The data by smoking status Data were subdivided by smoking status (Smoker, Non-Smoker, and Aggregate Rating). Like trauma cover, most new TPD sales are smoker rated. However, there is more longer duration business for TPD than for trauma cover, as TPD has been sold for many years, which is reflected in the higher proportion of Aggregate smoker status for longer duration TPD cover. Table 3.3.3: Percentage of exposed-to-risk, TPD cover, by smoking status and sex, for

both recent and older standard policies. Sex and Duration ETR SMOKER NON AGGREGATE TOTAL

Policies Males % % % % 0-4 208,397.0 14.1 66.9 19.0 100.05+ 177,837.5 4.7 24.8 70.5 100.0Policies Females 0-4 114,572.0 10.4 66.5 23.1 100.05+ 71,803.0 5.4 35.8 58.8 100.0Sums Insured Males 0-4 46,730,789,515.5 10.8 79.3 9.8 100.05+ 16,150,850,032.0 6.8 53.9 39.4 100.0Sums Insured Females 0-4 17,700,741,096.0 9.3 77.4 13.4 100.05+ 5,704,469,266.0 6.6 59.9 33.5 100.0

3.3.4. TPD: The data by duration The risk commencement date was supplied for each policy and claim. Table 3.3.4 shows that TPD cover remains a reasonably popular product.


Table 3.3.4: Percentage of exposed-to-risk, TPD cover, for standard lives by sex and duration.

Percentage by Duration Policies 0 1 2 3 4 5-9 10+ TOTAL %

Male 13.6 13.1 11.8 9.1 6.4 17.4 28.6 100Female 16.5 14.6 12.9 10.1 7.4 19.7 18.8 100Sums Insured Male 21.1 18.4 15.2 11.6 8.1 16.6 9.1 100.0Female 22.2 18.4 15.0 11.6 8.4 17.3 7.0 100.0


3.4. Immediate Annuities

3.4.1. Annuitant data by age As at the previous investigation, the age profile of the annuitants is heavily skewed towards the 60-80 age group, which accounts for 85% of total exposed-to-risk (see Figure 3.4.1 below). This is not too unexpected given that the rapid growth in the market for lifetime annuities only took place over the previous decade or so. However, the overall number of annuitants exposed-to-risk remains quite low at fewer than 50,000 (or less than 2% of the exposed-to-risk for death-only cover). It should be noted that only three offices contributed data for both years of this investigation with two others contributing to one year each. Table 3.4.1: Number of annuitants exposed-to-risk and deaths by count and annual

amount of annuity ($). POLICY TYPE Exposed to Risk DeathsAnnuitants 41,806 903Amount of annuity 322,701,427 7,336,800 Figure 3.4.1: Annuitants exposed-to-risk by age.

0500

100015002000250030003500

20 40 60 80 100

3.4.2. Annuitant data by annuity type and sex The data can also be subdivided by annuity type: Single Life, Joint Life Last Survivor and Joint Life Reversion. Table 3.4.2 clearly shows that the majority of annuitants have a Joint Life rather than Single Life policy. Within the Joint Life annuities, there are more females exposed-to-risk than males because females have a lower mortality than males. While this is also the case for Single Life annuities, the proportion of females there is even higher because life offices tend to sell more of them to females


than males. This suggests that females have a greater inclination to insure against their own longevity than males despite having to pay a higher insurance price. Table 3.4.2: Annuitants and annual amount of annuity ($) exposed-to-risk by annuity type

and sex. Annuity POLICIES AMOUNT OF ANNUITY Type Male % Female % Male % Female %Single Life 6,577.0 34.3 9,208.0 40.7 54,561,178.5 34.8 55,935,596.0 33.8Joint Life Last Survivor 11,638.5 60.7 12,475.0 55.1 91,058,449.2 58.0 98,286,265.9 59.3Joint Life Reversion 944.0 4.9 963.5 4.3 11,353,926.5 7.2 11,506,011.0 6.9TOTAL 19,159.5 100.0 22,646.5 100.0 156,973,554.2 100.0 165,727,872.9 100.0


3.5. Classification of the data for calculation of exposed-to-risk

Offices supplied individual claims notified each quarter with date of birth, risk commencement date and date of decrement. The In Force was supplied in the form of a census of individual policies in force at the close of business on 31 December. One office supplied in force data as at 30 June and this was taken into account when calculating the exposed-to-risk. Care has been taken in allowing for late notifications of claims. Claims have been recorded by age attained at the date of decrement and where a census intervened between the date of decrement and the date of notification the in force has been adjusted appropriately. 3.6. Data integrity

It is of utmost importance to ensure that the data are credible and as free from error as possible. As with the previous investigation numerous checks have been applied to the data to this end. a) A validation program was issued to all contributing offices to allow them to remove any gross

errors before submitting the data to the Mortality Investigation. The program produces an error listing and also a set of tables summarising the data by each major categorisation.

b) The supervising actuary for each office was required to certify the summary tables produced by the validation program as being materially accurate and representative of the office's data.

c) A policy identifier was included in each individual policy record to allow duplicate records to be detected and referred back to the contributing office for checks on, for example, possible misclassification.

d) Policies appearing for the first time at a census which, according to the risk commencement date, should have appeared at an earlier census are referred back to the contributing office. This has proved to be a valuable check on understatement of policies at duration zero. It has also been useful in identifying blocks of business which appear in a census for the first time, without having been included in a previous census.

e) As the Experience Investigation is based on first claims only, policies which are reported as in force after a claim has occurred are removed from the in force.

f) Claims which, according to the risk commencement date, should have an earlier in force record, but do not, are checked. If necessary, the missing in force records are reinstated at the appropriate census(es).

g) Claims are also checked for possible misclassification against the previous in force. h) In each census of annuities the classification of joint annuitant records is checked. Any

inconsistencies are referred back to the contributing office. i) The computer system devised for the Experience Investigation tracks the history of each

office's data, recording the details of each submission, including the policy types represented at each census. This history is used by the computer system to control the calculation of the exposed-to-risk and total claims for a given period of investigation. The period is divided into its component calendar years and the exposed-to-risk and claims are calculated for each year individually. An office is included in the calculation for the calendar year, if a census has been submitted for both the census date beginning the year and the census date ending the year and claims have been submitted for all quarters in between. For each office included in a calendar year, policy types not represented at both census dates are excluded from the calculation of both the exposed-to-risk and the total claims for that year.

j) A strategy was developed to manage the problems posed for the Experience Investigation by company mergers. This same strategy was also applied to situations where a company wished


to add a class of business to their submission which had not been included in past submissions. The company concerned was requested to submit two sets of in force data for the census date at which the changeover would take effect, one in force to end the old year and the other to start the new.

k) Standard Individual Office Reports in spreadsheet form have been compiled for each contributing office on receipt of each year’s data. These have proved to be valuable feedback to the contributors and also provide a further opportunity for offices to check their data.

An error was found in the reporting of trauma claims for one office and this was corrected by a further submission of data. Overall, the change to the submission of in force data individually rather than in summary form and the provision of analyses back to contributing offices have produced an improvement in the data integrity of the investigation. Further improvements are expected in the future.


4. RESULTS OF THE INVESTIGATION

4.1. Policies with Death Only cover

4.1.1. Comparison of volume of data with earlier investigations Table A.1.1 and Table A.1.2, in Appendix A show the volume of exposed-to-risk and claims for all standard policies in the IA1998-99 investigation. Table 4.1.1 compares the volume of non-annuity data, Death Only cover, for standard male lives at durations 2 and over in the 1990-92, 1992-94, 1995-97 and 1998-99 investigations. At the 1992-94 investigation there were 5.32m life years exposed. At the 1995-97 investigation, exposure years had reduced to 2.88m life years (54% of 1992-94 investigation). The 1998-99 investigation has further reduced exposure of 2.29m life years (43% of 1992-94 investigation). The reduction in exposure is due to a number of factors. Firstly, this investigation has been limited to two years rather than the usual three. Secondly, a number of life offices have withdrawn from the investigation or have not provided data for some years. Thirdly, the increasing popularity of Trauma/TPD rider cover has reduced the volume of death only policies. It is worth noting however that the total exposure for all durations measured on a per annum basis has actually increased over the previous investigation. Changes in the exposure at early durations and ultimate exposure probably reflect the change in the participation in the investigation and the adaptation of systems to the new requirements as well as growth in the market and possibly the level of replacement business being written. It is generally desirable to draw claim cost conclusions from more recent experience, which is closer to current conditions as it more accurately reflects any trends in mortality improvement, recent policy conditions and underwriting etc. However, with the reduction in the number of contributing life offices and some difference in the mix of insured lives, there are also disadvantages in using the most recent data. This is also compounded by the exclusion from the investigation of death cover under policies that include Trauma and TPD benefits. The adequacy and appropriateness of the results of this investigation for pricing, valuation or internal analysis purposes is thus a matter of judgement for the user of the information.


Table 4.1.1: Numbers and percentages of life policies exposed-to-risk and claims, Death Only cover, for standard male lives at durations 2 and over in the 1990-92, 1992-94 1995-97 and 1998-99 periods of investigation.

POLICY TYPE EXPOSED- TO-RISK

% CLAIMS %

IA 1990-92 (i) 3,943,597.5 78.2 27,793 94.6 (ii) 720,016.5 14.3 1,020 3.5 (iii) 204,423.0 4.1 359 1.2 (iv) 174,915.0 3.5 223 0.8

Total (i)-(iv) 5,042,952.0 100.0 29,395 100.0 IA 1992-94

(i) 3,865,721.0 72.6 29,193 93.3 (ii) 1,048,860.0 19.7 1,444 4.6 (iii) 118,316.0 2.2 230 0.7 (iv) 288,528.5 5.4 413 1.3

Total (i)-(iv) 5,321,425.5 100.0 31,280 100.0 IA 1995-97

(i) 2,003,476.0 69.6 15,811 92.7 (ii) 421,007.5 14.6 544 3.2 (iii) 46,416.5 1.6 127 0.7 (iv) 408,027.5 14.2 583 3.4

Total (i)-(iv) 2,878,927.5 100.0 17,065 100.0 IA 1998-99

(i) 1,571,164.0 68.7 12,694 92.3 (ii) 270,731.0 11.8 321 2.3 (iii) 19,171.5 0.8 38 0.3 (iv) 427,063.5 18.7 706 5.1

Total (i)-(iv) 2,288,130.0 100.0 13,759 100.0

4.1.2. Delay in notification and estimation of understatement of death claims for non-annuity policies, Death Only cover

Death claims are counted in the investigation and allocated to periods based on the date claim incurred. Therefore, to the extent that claims have not been notified by the time data is collected, mortality rates may be understated. Mortality rates reported as actual in the rest of this report makes no allowance for late reporting, such adjustment may need to be made by the user of the report over and above the figures shown in the report. Having said that, as the data is collected many months after the end of the relevant period, late reported claims have in many cases been included in the data submission. The 1995-97 investigation considered the possible extent of understatement of death claims for non-annuity Death Only policies due to late reporting, and estimated that claims were understated by 1.3%. No further work has been done to update this estimate for the period 98-99.

4.1.3. Mortality differences between policy types Table 4.1.2 shows the ratios of actual to expected claims for standard non-annuity, Death Only policies for durations 0 to 4 combined and for durations 5 and over by policy type. Expected claims have been calculated using IA95-97 M for males and IA95-97 F for females. The experience mortality is derived from the data in Appendix A, Table A.3.1 to Table A.6.6.


Table 4.1.2: Ratio (%) of actual to expected claims for standard lives for each non-annuity, Death Only policy type by sex, for durations 0 to 4 combined and 5 and over. Estimated standard errors are shown in parentheses.

RATIO (%) OF ACTUAL TO EXPECTED DEATHS BY POLICY TYPE FOR POLICY MALES FEMALES TYPE DURATION 0-4 DURATION 5+ DURATION 0-4 DURATION 5+

(i) 96 (15) 91 (1) 86 (22) 96 (2) (ii) 84 (12) 86 (5) 60 (19) 80 (8) (iii) 133 (67) 87 (15) 95 (95) 115 (26) (iv) 75 (4) 90 (4) 75 (6) 90 (7)

Actual to expected ratios vary by policy type. Relative average sums insured are shown in Table 4.1.3. Commentary on experience by policy type is as follows: Temporary insurances where the premium rate may be reviewed (type (iv)) Renewable term has significant volumes of recent new business and established existing business. Average sum insured is higher than other categories. Claim costs are relatively good, consistent with the results of previous investigations. This is believed to result from relatively stricter underwriting and favourable socio economic factors (both associated with higher sums insured) Renewable term is used as the benchmark for assessing other categories. Whole of life and endowment policies (type (i)) Traditional business continues to have higher mortality experience than reviewable term (the other large category). However the difference has significantly narrowed since the previous investigation. Possible reasons for the differences in mortality may be:

• A different socio-economic mix of lives and a higher proportion of smoking lives • Lower average sum insured, resulting in • Less stringent underwriting

Unbundled policies, both capital guaranteed and investment-linked (type (ii)) In comparison with reviewable term, unbundled male experience is 12% worse in the first 5 years and broadly similar after 5 years. Relative results are similar to the 1995-97 experience. Unbundled 0-4 experience may be relatively worse due to lower average sum insured and reduced underwriting. Female unbundled experience is difficult to assess due to high standard errors. However, the results do indicate relatively favourable unbundled female experience (similar to the 1995-97 investigation). Temporary insurances where premiums are fully guaranteed (type (iii)) Observed results for fully guaranteed temporary insurance policies are subject to high standard error, particularly duration 0-4, and so only limited conclusions can be drawn. The main factor of note is that male duration 5+ experience is now more consistent with other categories.


Table 4.1.3: Exposed to risk by amount ($) and number of policies, and average sum insured, for males and females of durations 0 to 4 combined and durations 5 and over, by policy type.

AVERAGE SUM INSURED ($) BY POLICY TYPE FOR POLICY MALES FEMALES TYPE DURATION 0-4 DURATION 5+ DURATION 0-4 DURATION 5+

(i) 77,429 14,978 54,209 14,731 (ii) 134,135 69,140 117,012 57,137 (iii) 82,950 63,076 74,643 48,478 (iv) 240,645 164,553 181,551 123,944

4.1.4. Trends in life insurance mortality Table 4.1.4 shows the ratios of actual to expected claims at durations 5 and over and 2 and over for standard, non-annuity, Death Only policies for males aged 10 years and over, and for females aged 20 years and over. Ratios are shown for each calendar year from 1990 to 1999 and also for periods 1990-92, 1992-94, 1995-97 and 1998-99. Expected claims have been calculated using IA90-92 M for males aged 10 years and over, and using IA90-92 F for females aged 20 years and over. IA90-92 M and F are based on whole of life and endowment policies of durations 2 years and over. Table 4.1.4: Ratio (%) of actual to expected claims for standard lives for all non-annuity

policy types combined, Death Only cover, by sex and curtate duration. Ratios are shown for calendar years 1990 to 1999 and for periods 1990-92, 1992-94, 1995-97 and 1998-1999. Estimated standard errors are shown in parentheses.

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS FOR STANDARD CALENDAR LIVES BY SEX AND CURTATE DURATION (in years) YEAR(S) MALE FEMALE 5 years and

over 2 years and

over 5 years and

over 2 years and

over Policy types (i)-(iv): All non-annuity policies combined 1990 103 (1) 103 (1) 102 (4) 100 (4) 1991 101 (1) 101 (1) 99 (3) 99 (3) 1992 97 (1) 97 (1) 104 (3) 103 (3) 1993 98 (1) 97 (1) 105 (3) 103 (3) 1994 96 (1) 96 (1) 104 (3) 103 (3) 1995 103 (3) 101 (3) 112 (7) 113 (6) 1996 94 (1) 94 (1) 92 (3) 93 (3) 1997 90 (1) 89 (1) 97 (3) 97 (3) 1998 81 (1) 81 (1) 94 (3) 93 (3) 1999 83 (1) 83 (1) 88 (3) 88 (3) 1990-1992 100 (1) 100 (1) 102 (2) 101 (2) 1992-1994 97 (1) 97 (1) 104 (2) 103 (2) 1995-1997 93 (1) 92 (1) 96 (2) 97 (2) 1998-1999 82 (1) 81 (1) 91 (2) 90 (2)

On an all policy combined basis, improvements since 90-92 period are:

• Males: around 1.5% p.a. up to 95-97 or around 2.7% p.a. up to 98-99 • Females: around 1.0% p.a. up to 95-97 or around 1.5% up to 98-99


Table 4.1.5 shows the ratios of actual to expected claims with standard errors for each of the four policy types separately. Table 4.1.5: Ratio (%) of actual to expected claims for standard lives for each non-annuity

policy type, Death Only cover, by sex and curtate duration. Death Only cover, by sex and curtate duration, and by period of investigation. Estimated standard errors are shown in parentheses. Expected claims based on IA90-92 M & F

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS FOR STANDARD LIVES BY SEX AND CURTATE DURATION (in years) YEAR(S) MALE FEMALE 5 years and

over 2 years and

over 5 years and

over 2 years and

over Policy type (i) Whole of life and endowment policies 1992 98 (1) 97 (1) 103 (3) 102 (3) 1993 99 (1) 98 (1) 105 (3) 104 (3) 1994 97 (1) 96 (1) 106 (3) 105 (3) 1995 108 (3) 110 (3) 116 (9) 127 (8) 1996 95 (1) 95 (1) 92 (3) 94 (3) 1997 90 (1) 91 (1) 96 (3) 96 (3) 1998 82 (1) 82 (1) 94 (3) 94 (3) 1999 82 (1) 82 (1) 90 (3) 90 (3) 1990-1992 100 (1) 100 (1) 100 (2) 99 (2) 1992-1994 98 (1) 97 (1) 105 (2) 104 (2) 1995-1997 94 (1) 94 (1) 96 (2) 98 (2) 1998-1999 82 (1) 82 (1) 92 (2) 92 (2) Policy type (ii) Unbundled policies with significant death risk 1992 103 (5) 98 (4) 103 (12) 103 (10) 1993 90 (5) 89 (4) 106 (12) 98 (10) 1994 82 (4) 83 (4) 70 (9) 76 (8) 1995 75 (8) 73 (7) 98 (19) 80 (15) 1996 82 (7) 81 (6) 81 (15) 73 (13) 1997 77 (5) 77 (5) 107 (12) 104 (11) 1998 67 (5) 66 (5) 79 (11) 77 (11) 1999 85 (1) 85 (1) 74 (11) 73 (11) 1990-1992 102 (4) 99 (3) 102 (9) 99 (7) 1992-1994 91 (3) 90 (2) 91 (6) 92 (5) 1995-1997 78 (4) 77 (3) 99 (8) 91 (7) 1998-1999 84 (1) 84 (1) 76 (8) 75 (8) Policy type (iii) Term with guaranteed premiums 1992 86 (11) 91 (10) 124 (23) 115 (21) 1993 83 (11) 84 (10) 98 (20) 92 (19) 1994 112 (13) 110 (12) 107 (22) 103 (20) 1995 118 (22) 124 (25) 148 (41) 147 (38) 1996 120 (18) 122 (17) 62 (22) 58 (20) 1997 102 (17) 106 (17) 104 (29) 120 (30) 1998 66 (16) 63 (15) 109 (34) 105 (33) 1999 76 (18) 82 (18) 101 (34) 99 (33) 1990-1992 90 (7) 94 (7) 146 (16) 142 (15) 1992-1994 93 (7) 95 (6) 110 (13) 103 (11) 1995-1997 113 (11) 117 (10) 100 (17) 104 (17) 1998-1999 71 (12) 73 (12) 105 (24) 102 (23)


RATIO (%) OF ACTUAL TO EXPECTED CLAIMS FOR STANDARD LIVES BY SEX AND CURTATE DURATION (in years) YEAR(S) MALE FEMALE 5 years and

over 2 years and

over 5 years and

over 2 years and

over Policy type (iv) Term with reviewable premiums 1992 74 (9) 72 (7) 91 (19) 91 (14) 1993 90 (9) 75 (7) 87 (17) 76 (12) 1994 90 (8) 86 (7) 108 (17) 108 (14) 1995 65 (10) 64 (8) 74 (20) 74 (13) 1996 80 (7) 68 (5) 95 (15) 89 (10) 1997 74 (6) 67 (4) 101 (13) 94 (9) 1998 77 (5) 54 (3) 97 (10) 93 (8) 1999 66 (4) 67 (4) 73 (9) 74 (7) 1990-1992 89 (7) 77 (5) 97 (16) 87 (10) 1992-1994 85 (5) 78 (4) 97 (10) 93 (8) 1995-1997 75 (4) 67 (3) 95 (9) 89 (6) 1998-1999 72 (3) 60 (2) 86 (6) 84 (5)

Whole of life and endowment policies (Policy type (i)) Improvements since 90-92 period are:

• Males: around 1.2% p.a. up to 95-97 or 2.6% up to 98-99 • Females: around 0.5% p.a. up to 95-97 or 1.0% up to 98-99

Temporary insurances where the premium rate may be reviewed (Policy type (iv)) Improvements since 90-92 period are:

• Males: around 3.0% p.a. up to both 95-97 and 98-99 • Females: close to no change up to 95-97 or 1.0% up to 98-99

Unbundled policies, capital guaranteed & investment-linked reviewed (Policy type (ii)) Apparent improvements since 90-92 period are:

• Males: around 5.0% p.a. up to 95-97 or around 2.5% up to 98-99 • Females: around 1.0% p.a. up to 95-97 or 4.0% improvement up to 98-99

Note: Experience results are subject to relatively high standard errors and so apparent trend results need to be viewed with great caution. Temporary insurances where premiums are fully guaranteed reviewed (Policy type (iii)) Only very limited inferences can be drawn from this data, as the standard errors are high.

4.1.5. Mortality experience by sums insured Table 4.1.6 shows the ratios of actual to expected claims for all standard non-annuity, Death Only policies combined, by sex and duration, by sum insured and by policy count. Expected claims have been calculated using IA 95-97 M for males and IA 95-97 F for females. The experience mortality for the analysis is derived from the data in Appendix A, Table A.2.1to Table A.2.12.


Table 4.1.6: Ratio (%) of actual to expected claims for standard lives for all non-annuity, Death Only policy types combined, by sex and duration, by sum insured and policy count. Estimated standard errors are shown in parentheses.

RATIO (%) OF ACTUAL TO EXPECTED DEATHS FOR CURTATE MALES FEMALES DURATION (in years)

BY SUM INSURED

BY POLICY COUNT

BY SUM INSURED

BY POLICY COUNT

0 47 69 45 60 1 70 74 32 50 2 83 85 77 93 3 65 78 70 74 4 74 81 102 105

5 and over 86 (4) 91 (1) 103 (6) 95 (1) 2 and over 83 (4) 90 (1) 84 (6) 95 (1)

The actual to expected ratios by sum insured are lower than the corresponding ratios by policy count except for female duration over 5 years. At the previous 1995-95 investigation the sum insured ratio was lower in all cases. Policies with higher sums insured may experience lighter mortality through more stringent underwriting or because of the link between mortality and socio-economic status.

4.1.6. The effect of selection on mortality Table 4.1.7 shows the ratios of actual to expected claims for standard non-annuity, Death Only policies for each of durations 0 to 4 and for durations 5 and over and 2 and over. Expected claims have been calculated using IA 95-97 M for males and IA 95-97 F for females. As IA 95-97 M and F are based on non-annuity policies of durations 2 and over, the actual to expected ratios for select durations compare select actual with ultimate expected claims. The experience mortality is derived from the data in Appendix A, Table A.3.1to Table A.6.6. Table 4.1.7: Ratio (%) of actual to expected claims for standard lives for each non-annuity,

Death Only policy type by sex and curtate duration. Estimated standard errors are shown in parentheses.

CURTATE RATIO (%) OF ACTUAL TO EXPECTED DEATHS FOR DURATION POLICY TYPE (in years) (i) (ii) (iii) (iv)

Males 0 96 (43) 82 (21) 65 (8) 1 161 (51) 105 (27) 64 (7) 2 52 (26) 87 (29) 87 (8) 3 86 (30) 64 (29) 78 (8) 4 99 (28) 72 (27) 80 (9)

5 and over 91 (1) 86 (5) 87 (15) 90 (4) 2 and over 91 (1) 85 (5) 89 (14) 87 (3) Females

0 80 (56) 21 (21) 66 (14) 1 70 (50) 55 (39) 46 (11) 2 59 (41) 111 (64) 89 (15) 3 101 (51) 0 (0) 77 (14) 4 104 (42) 124 (62) 100 (17)

5 and over 96 (2) 80 (8) 115 (26) 90 (7) 2 and over 96 (2) 81 (8) 109 (25) 89 (6)


For policy type (iv), reviewable term insurance, there is evidence of a selection effect of possibly five years for males, and some evidence of a similar selection effect for females. The data for policy types (i) to (iii) are too scanty to enable any conclusions to be drawn about the effects of selection. The effect of selection may be indicated by expressing a select actual to expected ratio as a percentage of an ultimate ratio. For example, for policy type (iv) the ratio for duration 0 to durations 2 and over is, for males, 75%, i.e. 65% ÷ 87%. Table 4.1.8 shows the ratios of select to ultimate experience for policy type (iv) for the current investigation and the previous 1995-97 and 1992-94 investigations. A ratio of less than 100% indicates the presence of selection. These results should be used with caution, as the estimated standard errors of the ratios are high. Table 4.1.8: Actual to expected ratio for durations 0 and 1 as a percentage of the actual to

expected ratio for durations 2 and over (%) for standard lives, policy type (iv), by sex and period of investigation. Estimated standard errors are shown in parentheses.

CURTATE DURATION

SELECT ACTUAL TO EXPECTED RATIO AS A PERCENTAGE OF THE ACTUAL TO EXPECTED RATIO FOR DURATIONS 2 AND OVER (%) FOR

(in years) 1998-1999 1995-1997 1992-1994 Males

0 75 (9) 91 (9) 63 (9) 1 74 (9) 92 (9) 92 (12)

Females 0 74 (16) 88 (15) 57 (15) 1 52 (13) 82 (14) 78 (19)

4.1.7. Range of mortality for the contributing offices Table 4.1.9 shows the range of actual to expected ratios (as percentages) for standard male lives by office, curtate duration and policy type. In presenting the highest and lowest office ratios, only those offices with at least twenty expected claims at the given duration were considered. Ratios are shown only where at least four offices met the above criterion at the given duration. Policy type (iii) did not meet the above criteria at any duration combination, and so is not presented separately. In addition, durations 0 and 1 for individual policy types (i) and (ii) did not meet the above criteria and are also not shown. The wide variation in individual office experience should be taken as a warning to offices to exercise caution and professional judgment in using the aggregate industry results in this report.


Table 4.1.9: Ratio (%) of actual to expected claims for standard male lives, Death Only cover, by policy type and curtate duration, for all offices combined and for individual offices with the highest and the lowest mortality. Estimated standard errors are shown in parentheses.

CURTATE RATIO (%) OF ACTUAL TO EXPECTED CLAIMS DURATION FOR STANDARD MALE LIVES (in years) ALL OFFICES HIGHEST OFFICE LOWEST OFFICE

Policy type (i) Whole of life and endowment policies

2 and over 91 (1) 101 (5) 74 (8) 5 and over 91 (1) 101 (5) 73 (8)

Policy type (ii) Unbundled policies

2 and over 85 (5) 117 (30) 61 (14) 5 and over 86 (5) 113 (12) 61 (14)

Policy type (iv) Term with reviewable premiums

0 65 (8) 181 (34) 34 (34) 1 64 (7) 292 (146) 23 (23)

2 and over 87 (3) 124 (21) 53 (8) 5 and over 90 (4) 116 (24) 67 (14)

Policy types (i)-(iv) combined

0 84 (11) 219 (109) 32 (19) 1 74 (7) 214 (96) 68 ( 21)

2 and over 90 (1) 135 (8) 68 (6) 5 and over 91 (1) 141 (8) 71 (7)

4.1.8. Female vs male mortality for insured lives Male and female experience for all Death Only cover policy types are shown in Appendix A, Sections A.2 to A.6. Female mortality is compared with male mortality in Appendix A, Table A.7.1, by expressing actual to expected female claims as a percentage of actual to expected male claims where the expected claims for both males and females are calculated using IA95-97 M. The overall ratio of female to male mortality at durations 2 and over for all non-annuity insurances with Death Only cover is 68%. The equivalent ratio was 62% in the Mortality Committee report (1999) for the 1995-97 period. Figure 4.1.1 below compares the ratio of female to male mortality by age, from Appendix A, Table A.7.1, with the ratio of female to male qx in the Australian population for the period 2000-2002 (ABS, 2004). While the shape of the insured lives’ ratios broadly follows that of the Australian population ratios, the insured lives’ ratios are generally higher over the age range 35 to 70 years. A similar result was found for the 1995-97 insured data when compared with the Australian Life Tables 1995-97 (IAA Mortality Committee, 1999).


Figure 4.1.1: Female vs male mortality for the 1998-99 period in five-year age bands, i.e. ratio (%) of actual to expected female claims (based on male mortality) divided by ratio (%) of actual to expected male claims for durations 2 and over, compared to population life tables 2000-2002, qx (female) ÷ qx (male).

0%20%40%60%80%

100%120%140%160%180%200%

0 10 20 30 40 50 60 70 80 90Population 2000-2002 Insured lives 1998-99

4.1.9. Smoker and non-smoker mortality Smoker and non-smoker experience for males and females is shown in Appendix A, Table A.8.1 to Table A.8.9 for all non-annuity insurances with Death Only cover combined, and Table A.9.1 to Table A.9.9 for policy type (iv), temporary insurances with reviewable premiums, Death Only cover. As shown in §3 of this report, the proportion of smoker-rated lives is generally higher for policy type (iv) than for the other policy types. Table 4.1.10 summarises smoker and non-smoker mortality and compares the two by expressing smoker mortality as a percentage of non-smoker mortality. The comparison of smoker to non-smoker mortality is calculated as the ratio of the smoker to non-smoker actual to expected ratios based on IA95-97 M and F. The overall ratio of smoker to non-smoker mortality for all non-annuity insurances with Death Only cover of durations 2 and over is, for males, 193% with an estimated standard error of 18% and, for females, 191% with an estimated standard error of 21%. The overall ratio of smoker to non-smoker mortality for temporary insurances with reviewable premiums, Death Only cover of durations 2 and over is, for males, 191% with an estimated standard error of 18% and, for females, 210% with an estimated standard error of 24%. There is insufficient data to indicate any trend in the smoker to non-smoker ratios by age or duration. The results continue to show a significant difference between non smokers and smokers mortality which is in line with results from the previous investigation taking into account the variability of the ratios. The IAA Mortality Committee (1999) reported smoker to non-smoker ratios of 208% for males and 138% for females for all non-annuity policies of durations 2 and over, and 214% for males and 160% for females for reviewable term insurance policies of durations 2 and over. In this


investigation, the ratio of smoker to non-smoker actual to expected ratios for males and females are of the same magnitude for the first time. Given the volume of smokers data, especially female smokers, care needs to be taken in interpreting these results. Table 4.1.10: Ratio (%) of actual to expected claims in the 1998-99 period for standard

smoker rated lives, Death Only cover, of durations 2 and over by sex, for all non-annuity policy types combined and for reviewable term insurance. A comparison of smoker vs nonsmoker mortality is also shown. Estimated standard errors are shown in parentheses.

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS POLICY TYPE FOR STANDARD LIVES MALES FEMALES Smoker experience (i)-(iv) 137 (8) 79 (15) (iv) 136 (9) 64 (17) Non-smoker experience (i)-(iv) 71 (3) 71 (5) (iv) 71 (3) 66 (5) Smoker mortality as a percentage of non-smoker mortality (i)-(iv) 193 (18) 191 (21) (iv) 191 (18) 210 (24)


4.2. Trauma policies

4.2.1. Volume of data The investigation includes trauma benefits covered by:

(i) riders to term insurances whereby the death sum insured is paid on a trauma event satisfying the policy conditions, if occurring earlier;

(ii) standalone contracts whereby the death sum insured is not affected by prior payment of a benefit on the occurrence of a trauma event or where there is no death cover.

While it is not possible to identify which records in the data are acceleration benefits and which are standalone benefits, the latter are generally less popular in the Australian market. In 1998-99 a total of 493,000 policies were exposed-to-risk and there were 794 claims in respect of trauma events. Throughout this section the analysis has been carried out on the basis of policy count. The design of the investigation allowed only one sum insured to be collected (typically set equal to the amount of death sum insured which can exceed the trauma sum at risk).

4.2.2. The basis of the trauma analysis Only those claims that have either been settled or where the insurance company has accepted liability are included in this investigation. In other words, claims that have been notified but rejected or denied and claims notified but not yet admitted are excluded from the investigation. Numbers of expected claims in this report are based on incidence rates for the Australian population as published in Appendix Z of Fabrizio and Gratton (1994). These are graduated gender-specific population incidence rates for each specified trauma event. While the published rates are now outdated given; continuing advances in medical screening and diagnosis (which has the effect of increasing diagnostic incidence rates); improvements in disease treatment and prevention, and; changes in the important risk factors, they nevertheless serve as a means of standardising results over time in order to identify trends. In the calculation of expected claims for each trauma event, deduction is made for the chance of death within the first 28 days following occurrence of the trauma. The base population incidence rates refer to all incidence of that trauma event regardless of survivorship after that event. This recognises that deaths related to trauma events are more likely to be claimed against the death cover component of the insurance contract than against the trauma component. No allowance has been made for the deferment period typically required on major trauma events (usually three months from policy commencement). The effect on the results is to overstate the exposed-to-risk at curtate duration 0 and hence to understate the actual to expected ratios.

4.2.3. Trauma experience by calendar year Table 4.2.1 and Table 4.2.2 show separately for males and females the ratios of actual to expected claims for each policy duration. Given the reduced level of reporting cause of claim information in the 1998-99 investigation, temporal trends in the experience are only examined at the all-cause level. Ratios are shown for each calendar year. Expected claims have been calculated using the described population incidence rates.


Table 4.2.1: Ratio (%) of actual to expected claims for Male policies by curtate duration. Estimated standard errors are shown in parentheses.

CURTATE DURATION

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS BY CURTATE DURATION

Male 1995 1996 1997 1998 1999 1995-97 1998-99 0 54 41 42 45 59 44 53 1 53 75 42 54 80 57 66 2 25 65 56 56 68 56 62 3 134 60 61 60 57 64 59 4 129 43 56 60 57 58 5-9 34 57 53 29 54 10+ 65 82 75 5+ 30 (12) 58 (11) 54 (7) 26 (10) 55 (6) 2+ 47 (14) 66 (8) 53 (5) 57 (4) 60 (4) 56 (4) 59 (3)

Table 4.2.2: Ratio (%) of actual to expected claims for Female policies by curtate duration.

Estimated standard errors are shown in parentheses. CURTATE DURATION

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS BY CURTATE DURATION

Female 1995 1996 1997 1998 1999 1995-97 1998-99 0 76 69 55 54 84 65 68 1 93 122 80 66 68 98 67 2 45 59 61 71 64 59 68 3 64 58 107 61 57 84 4 25 42 77 20 61 5-9 77 47 73 63 49 67 10+ 0 84 53 5+ 67 (67) 43 (19) 70 (16) 64 (10) 44 (18) 66 (9) 2+ 31 (18) 56 (11) 53 (7) 75 (7) 66 (6) 53 (6) 70 (4)

At the 5% significance level, there is no evidence of a deterioration in claims experience having occurred between the 1995-97 and 1998-99 investigations for males. For females, prima facie evidence does suggest an increasing claims trend. However, it is not clear if it is a genuine trend or is due to other factors such as different composition of business between the two periods of investigation.

4.2.4. Effect of Selection on Trauma In Table 4.2.1 and Table 4.2.2 the experience is also summarised for policy durations 2+ years and 5+ years. Normally we would expect lighter claims experience in the first few years of a policy due to the effect of underwriting. This select pattern is not evident in the trauma experience. The actual to expected ratio at curtate duration 0 would have been higher than those shown had allowance been made for the deferment period, further accentuating the absence of selection in trauma.

4.2.5. Experience by age Apart from some uncertainty at the younger ages, the shape of the assumed population incidence rates for the four major trauma events would appear to provide a reasonable fit to actual experience given the fairly stable ratio of actual to expected claims observed by age.


Table 4.2.3: Ratio (%) of actual to expected claims for the four major trauma events combined by sex and age for durations 2 and over in 1998-99. Estimated standard errors are shown in parentheses.

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS BY SEX AND AGE Age Group Males Females 25-34 47 (13) 42 (13) 35-44 13 (2) 15 (2) 45-54 17 (2) 20 (2) 55-64 12 (4) 20 (4)

4.2.6. Female vs male trauma experience Female versus male experience for all standard rated trauma coverages combined is shown in Appendix A, Table A.11.1. Female morbidity is compared with male morbidity by expressing actual to expected female claims as a percentage of actual to expected male claims where the expected claims for both males and females are calculated using male population incidence rates. The analysis relates to all causes of claim combined. The overall ratio of female to male morbidity at durations 2 and over is 98% with an estimated standard error of 9%. The ratio at duration 0 is 101% and at duration 1 is 84%.

4.2.7. Smoker and non-smoker trauma experience Smoker and non-smoker experience for males and females is shown in Appendix A, Table A.12.1 to Table A.12.8. Table 4.2.4 below summarises smoker and non-smoker morbidity and compares the two by expressing smoker morbidity as a percentage of non-smoker morbidity where expected rates are sex-specific population incidence rates. The analysis relates to the four major trauma events combined. At durations 2 and over, the smoker to non-smoker ratio is 147% with an estimated standard error of 44% for males and 139% with an estimated standard error of 43% for females. Table 4.2.4: Ratio (%) of actual to expected claims for four major trauma events combined

in 1998-99 for smoker and non-smoker policies of durations 2 and over by sex, and a comparison of smoker vs non-smoker morbidity

RATIO (%) OF ACTUAL TO EXPECTED CLAIMS FOR DURATIONS 2 AND OVER

Male Female Smoker experience 22 (6) 25 (9) Non-smoker experience 15 (2) 18 (2) Smoker experience as a percentage of non-smoker experience

147 (44) 139 (43)

4.2.8. Experience by major causes of trauma claim Analysis of the experience by each of the four major causes of claim produces significantly different actual to expected ratios. Table 4.2.5 shows the actual to expected ratios by sex, for durations 2 and over, and for all durations, for each of the four major trauma events. As alerted above in the discussion of data, 52% of total claims are of cause unknown or other than the four leading causes. Thus, the analysis here, based on 383 claims, only represents a subset


(48%) of the total data under investigation. Other than cancer, the actual number of female claims is too scanty to allow any credible analysis. Table 4.2.5: Ratio (%) of actual to expected claims by sex and major cause of trauma event

in 1998-99. Estimated standard errors are shown in parentheses. RATIO (%) OF ACTUAL TO EXPECTED CLAIMS BY SEX AND

TRAUMA EVENT Event Males Females All Durations Duration 2+ All Durations Duration 2+ Cancer 45 (4) 44 (5) 47 (4) 43 (5) Heart Attack 23 (3) 19 (3) ** ** Bypass Surgery 32 (7) 32 (8) ** ** Stroke 16 (4) 18 (5) ** ** Four Major Events Combined

31 (2) 30 (3) 38 (3) 33 (4)

** too few claims For males, cancer claims have been much worse than expected relative to the average experience for all four events combined. Conversely, stroke claims have been much better than expected relative to the average for all four events. In females, cancer is the most common cause of claim. Whilst specific sites of cancer are not identifiable in the data, anecdotally the majority of female cancer claims are related to cancer of the breast. There are very few claims for heart attack, stroke and bypass surgery for females. Table 4.2.6 shows the actual to expected ratios for cancer claims by sex and policy duration. Table 4.2.6: Number and ratio (%) of actual to expected claims, cancer only, by sex and

curtate duration. Standard errors are shown in parentheses. CANCER CLAIMS BY SEX AND CURTATE DURATION Males Females Duration (in years) Number A/E ratio (%) Number A/E ratio (%) 0 26 57 (11) 33 66 (12) 1 20 40 (9) 25 45 (9) 2+ 78 44 (5) 85 43 (5)

There is anti-selection evident in the first policy year, and this is more pronounced among females than males. These results suggest that the underwriting process has not been as effective in detecting those applicants for trauma insurance who have a high propensity to developing cancer within a short duration as it has been for other types of trauma. Given that there is a 90-day deferment period for cancer claims in the first policy year, which is not reflected in the calculation of expected claims, this anti-selection is much more significant than indicated in the table. While detailed cause of claim information is not available, the majority of these early female claims are suspected to be due to breast cancer. Widespread community awareness and encouragement of breast cancer screening programs in Australia during the second half of the 1990s are likely to have contributed to the rise in observed female cancer incidence rates. Table 4.2.7 shows the actual to expected ratios for bypass surgery claims for males by policy duration. The actual to expected ratios at each duration for bypass surgery claims are higher


compared to the overall result for all four major events combined. The number of female claims for bypass surgery is too small to allow any meaningful analysis. Again the 90-day deferment period for bypass surgery claims in the first policy year is not reflected in the calculation of expected claims. Table 4.2.7: Number and ratio (%) of actual to expected claims, bypass surgery only, for

male policies by curtate duration. Standard errors are shown in parentheses. BYPASS SURGERY CLAIMS BY CURTATE DURATION Duration (in years) Number A/E ratio (%) 0 3 29 (17) 1 4 33 (17) 2+ 15 32 (8)

Table 4.2.8 shows the actual to expected ratios for heart attack claims by sex and policy duration. There appears some anti-selection in male heart attack claims again considering that the 90-day deferment period for heart attack claims in the first policy year is not reflected in the calculation of expected claims. Table 4.2.8: Number and ratio (%) of actual to expected claims, heart attack only, for male

policies by curtate duration. Standard errors are shown in parentheses. HEART ATTACK CLAIMS BY SEX AND CURTATE DURATION Duration (in years) Number A/E ratio (%) 0 16 34 (8) 1 13 25 (7) 2+ 37 19 (3)

4.2.9. Trauma experience by sums insured vs policy count In respect of the four major trauma events combined, the experience has been lighter when weighted by claim amounts vis-à-vis number of policies. For durations 2 and over, the actual to expected ratio weighted by amounts is 23% for males (30% by number) and 30% for females (33% by number). As noted earlier as the data collected only includes one sum insured there may be some distortion of the results due to the death sum insured being used.

4.2.10. Trauma experience by contributing offices All offices had at least twenty expected claims in total at policy durations 2 and over in the following comparison of results of individual contributors. For males, at durations 2 and over, the highest actual to expected ratio is 78% and the lowest ratio is 40%. For females, at durations 2 and over, the highest actual to expected ratio is 111% and the lowest ratio is 40%. The same office had the lowest actual to expected ratio for both males and females. The standard errors are too large at durations 5 and over to produce statistically confident results for individual contributors. The wide variation in individual office experience for trauma risks should be taken as a reminder to offices to exercise caution and professional judgment in using the aggregate industry results in this report for the purpose of setting assumptions.


4.3. Total and Permanent Disablement (TPD) policies

4.3.1. Some comments on the data Table A.13.1to Table A.13.4 in Appendix A of this report show the volume of exposed-to-risk and claims for all standard non-annuity policies with a TPD rider attached in the IA 1998-99 investigation. Special care should be exercised in interpreting the results given the nature of this rider benefit involves a significant delay, sometimes up to two or three years, to finalisation of claims. It should also be noted that the data includes all TPD rider benefits, regardless of whether or not a trauma rider is also present. For a number of conditions, trauma is likely to be an acceleration of TPD, as there is no 6-month duration requirement, but this is not accounted for in the analysis of experience. Table 4.3.1 compares the volume of non-annuity data for both male and female lives at all durations, at duration 2 and over and duration 5 and over in this investigation. Table 4.3.1: Numbers of non-annuity policies exposed-to-risk, TPD cover, and TPD claims

for standard lives DURATION EXPOSED-TO-RISK TPD CLAIMS MALE FEMALE MALE FEMALE All durations 386,234.5 186,375.0 260 72 2 and over 283,399.6 128,369.0 277 64 5 and over 177,837.5 71,803.0 155 46

Although some occupational coding has been collected, it is limited in volume so it has not been practicable in this report to provide analyses by occupation group. The co-operation of contributing offices in providing this important detail for future investigations will be much appreciated. From other studies, it is well known that TPD incidence varies greatly by occupational group and this must be borne in mind when attempting to interpret the analyses in this report. All of the comparisons will be biased due to the different occupational mixes of the groups being compared. For example, there may be a larger proportion of the male lives that is blue collar, compared with females.

4.3.2. The effect of selection on TPD Table 4.3.2 shows the ratios of actual to expected claims for standard non-annuity policies for durations 0 to 4, durations 5 and over and durations 2 and over, based on both policies and sums insured. Expected claims have been calculated using the TPD rates for males and females published in Martin’s Group Life Experience Study (1995). This study is based on group life data, which could be quite different from individually underwritten risks. Care should also be taken when considering the sum insured ratios given that only the first sum insured on a policy was collected and the Death cover sum insured could be greater than the TPD cover sum insured.


Table 4.3.2: Ratios (%) of actual to expected TPD claims for standard lives, TPD cover, by sex and curtate duration. Standard errors (%) for durations 5 and over and 2 and over are given in parentheses

CURTATE RATIO (%) OF ACTUAL TO EXPECTED TPD CLAIMS DURATION BY POLICY COUNT BY SUMS INSURED (in years) MALES FEMALES MALES FEMALES

0 20 36 10 44 1 36 21 18 4 2 41 27 15 13 3 45 95 22 60 4 56 21 32 38

5 and over 41 (3) 66 (10) 27 (11) 61 (21) 2 and over 42 (3) 60 (8) 24 (9) 48 (17)

Observed ultimate claim cost rates are considerably lower than the previous 1995-97 investigation. Male policy count Actual/Expected rates have reduced from 96% to 41% for the 5+ category and from 85% to 42% for the 2+ category. Comparable ultimate rate reductions are evident for female lives and based on sum insured. Experience results for the first four durations are broadly comparable with the previous investigation. There is evidence of selection over the first three policy years. The select effect is however, significantly less apparent than in the previous investigation. This may be because ultimate rates are now significantly lower. A possible reason for the significant change in ultimate claim cost between the two investigations may relate to the increasing popularity of trauma rider cover. Trauma claims often accelerate what would otherwise become TPD claims. Observed TPD rates are flatter by duration, and could reflect the select impact of underwriting over the first three years or so followed by the impact of Trauma riders particularly reducing TPD claims incidence at longer durations. Other possible reasons for the significant reduction in TPD ultimate claim costs might relate to:

• Improved TPD underwriting having a more long lasting effect • External factors such as the state of the economy • Changes in the mix of contributors combined with significant variations between offices

and from year to year • Errors in the data supplied (note that the Committee has had difficulties obtaining

confirmation from contributing offices on data validity) • Changes in reporting/admitting patterns.

4.3.3. Female vs Male TPD Experience Table 4.3.3 shows the difference between the female experience and the male experience by curtate duration where both male and female expected claims are based on Martin (1995) male rates. Estimated standard errors of ratios (%) are shown in parentheses.


The overall results show female experience as a proportion of male experience to be 81% for durations greater than 5 years and 72% for durations greater than 2 years. Equivalent percentages from the 1995-97 investigation were 66% for durations greater than 5 years and 61% for durations greater than 2 years. For durations greater than 2 years, the female to male experience proportion is broadly similar to the ratio (68%) observed for death only shown earlier in this report (see §4.1). The results need to viewed with some caution as:

(a) Standard errors are relatively high. (b) Some of the gender difference may be due to a higher incidence of blue-collar workers in

the male experience. No analysis for the period 1998-99 was undertaken of the experience by occupational group. Note that a separate TPD experience analysis by occupation and gender was undertaken by the Mortality Committee in November 2000.

Table 4.3.3: Female vs male experience for standard lives, TPD cover, by duration.

Standard errors (%) are given in parentheses. AGES RATIO (%) OF FEMALE A/E TO MALE A/E BY DURATION ATTAINED 5+ 2+ 15-24 25-34 260 (237) 143 (99) 35-44 88 (43) 45 (21) 45-54 47 (20) 48 (17) 55-64 130 (56) 149 (51) TOTAL 81 (20) 72 (15)

4.3.4. Smoker vs non-smoker TPD experience Table 4.3.4 summarises smoker vs non-smoker experience for males and females, by expressing smoker morbidity as a percentage of non-smoker morbidity. As the number of smoker rated TPD claims for either sex is small, care should be used in interpreting the results. Table 4.3.4: Ratio (%) of actual to expected claims in 1998-99 for smoker and non-smoker

policies, TPD cover, of durations 2 and over by sex, and a comparison of smoker vs non-smoker morbidity. Expected means Martin M and F aggregate

RATIO (%) OF ACTUAL TO EXPECTED TPD CLAIMS SMOKER FOR DURATIONS 2 AND OVER RATING MALE FEMALE Smoker experience 95 (17) 133 (45)

Non-smoker experience 35 (4) 36 (9)

Smoker experience as a percentage of non-smoker experience

269 (59) 373 (161)

Smoker experience as a percentage of non-smoker experience at durations 2 and over is 269% for males and 373% for females. These ratios are very variable, as indicated by the large standard errors. Equivalent ratios from the previous 1995-97 investigation were 282% for males and 292% for females.


By comparison, the 1998-99 ratios for Death Only smoker to non-smoker experience at durations 2 and over are 193% for males and 191% for females. The relatively worse smoker/non-smoker experience for TPD policies compared to Death Only policies may reflect the fact that smoking is a proxy for blue-collar employment and that TPD incidence is relatively heavier than mortality in such occupations.


4.4. Immediate annuities

4.4.1. Exposure Despite covering only 2 years, the 1998-99 exposed-to-risk for life annuitants is well up on 1995-97 survey (see Table 4.4.1 below). This reflects to some extent a growing market (even with just 4 companies contributing to the survey for these 2 years) and also the fact that a major writer of lifetime annuity business contributed fully to the 1998-99 investigation but only partially to the 1995-97 survey. Table 4.4.1: Numbers of annuitant exposed-to-risk and deaths for the 1990-92, 1992-94,

1995-97 and 1998-99 investigations PERIOD OF EXPOSED-TO-RISK DEATHS

INVESTIGATION MALE FEMALE MALE FEMALE

1990-92 2,828.5 2,760.0 31 39

1992-94 9,116.0 9,175.0 219 183

1995-97 11,149.5 13,612.0 297 274

1998-99 19,160.0 22,646.5 524 379 The 1998-99 exposure profile is similar to that of 1995-97, namely with most annuitants in the 60-80 age group and more females than males.

4.4.2. Benchmark mortality The annuitant mortality experience has been compared against the same mortality tables as in the previous report, namely

(a) the UK annuitant mortality table IM80/IF80 Base (ultimate) (Continuous Mortality Investigation, 1990) as the main benchmark table but also

(b) the Australian insured lives mortality table IA90-92 to provide an indication of mortality trends since 1992.

In addition, the experience has been compared against the latest UK annuitant mortality table IML92/IFL92 Base (ultimate) (see Continuous Mortality Investigation Report No.17, 1999) to see how it fares as a potential benchmark table. Note that no adjustment is made to any of the benchmark tables (IM80/IF80 or IML92/IFL92) for mortality improvement up to 1998-99. It is not meant to be a realistic guide to an expected level of mortality but rather as a possible proxy for the shape of the underlying mortality curve. However, mortality improvement can affect the shape of the mortality curve due to different rates of improvement at different ages (as it typically, but not always, reduces with increasing age). With that in mind, the table IML92/IFL92 Base (ultimate) has been used both unadjusted and adjusted for mortality improvement up to 1998-99 for benchmark comparison purposes.

4.4.3. Results by sex and duration The 1998-99 annuitant mortality results summarised by sex and duration are shown in Table 4.4.2 below.


Table 4.4.2: Ratio (%) of actual to expected deaths for annuitants by sex and duration.

Expected deaths are based on benchmark table IM80/IF80 Base (ultimate).

CURTATE DURATION RATIO (%) OF ACTUAL TO EXPECTED DEATHS (in years) MALE FEMALE 0 42 43 1 41 40 1 and over 59 56 2 and over 61 58 5 and over 62 59

By duration, the results show significantly lighter mortality in the 1st two policy years, which is not consistent with overseas experience of a 1-year selection period or with the results of the previous investigation. This very strong self-selection effect of around 30% for males and 25% for females should be viewed with some caution as it is based on a very small amount of data (less than 100 death in the first two durations). Incidentally, the results could also be used as a guide to review the current solvency standard, which has an initial mortality of 50%/60% (duration 0-1/ duration 1+) of IM80/IF80 Base (ultimate) applying to 1996 as the base year. For instance, the initial mortality could be suitably updated to 1999 as the base year by taking into account the latest results. If this was done, it may well lead to a more stringent solvency basis for annuitant mortality.

4.4.4. Results by sex and age The 1998-99 annuitant mortality results have also been summarised by sex and age attained and are shown in Table 4.4.3 below. Table 4.4.3: Ratio (%) of actual to expected deaths for annuitants, duration 1 and over, by

10-year age groups and sex. Expected deaths are based on benchmark table IM80/IF80 Base (ultimate). Estimated standard errors (%) are shown in parentheses

AGE ATTAINED RATIO (%) OF ACTUAL TO EXPECTED DEATHS (years) MALE FEMALE 60-69 53 (7) 46 (9) 70-79 54 (3) 51 (4) 80-89 66 (6) 61 (6) 90-99 108 (17) 85 (11)

As in the previous report for 1995-97, the results suggest a steeper benchmark mortality curve might be more appropriate i.e. lower mortality rates at younger ages and higher rates at older ages, especially over age 90 (although exposed to risk is quite limited there). As such, it raises doubts about the suitability of the current benchmark mortality table and arguably increases the pressure to switch to another benchmark table or even develop our own Australian annuitant mortality table. To develop a truly representative Australian benchmark table, however, would require the participation of more of the participants in the immediate annuity market as more than one significant player has not contributed to this investigation.


4.4.5. Comparing against another benchmark mortality Given that the UK Institute of Actuaries has introduced a more recent annuitant table than IM80/IF80, the 1998-99 results have also been compared against that table (i.e. IML92 /IFL92 Base (ultimate)) to see if it might provide a better fit to the results. As mentioned earlier, this has been done on 2 bases in Table 4.4.4 below – unadjusted and adjusted for mortality improvement from 1992 to 1998-99 (using the projection factors recommended by the UK Institute of Actuaries). Table 4.4.4: Ratio (%) of actual to expected deaths for annuitants, duration 1 and over, by

10-year age groups and sex. Expected deaths are based on IML92/IFL92 Base (ultimate) unadjusted and adjusted for mortality improvement to 1998-99

AGE ATTAINED RATIO (%) OF ACTUAL TO EXPECTED DEATHS (years) MALE FEMALE

Unadjusted Adjusted Unadjusted Adjusted 60-69 80 96 100 120 70-79 71 80 65 73 80-89 75 78 67 72 90-99 116 121 74 76

It can be seen that Australian annuitant mortality is generally at a lower level than its UK counterpart (which is also the case with population mortality). In terms of matching the shape of the Australian annuitant mortality experience in 1998-99, the UK table IML92/IFL92 (adjusted or unadjusted) seems to provide a reasonable fit between age 70 and 89 but much less so at other ages (although this may be driven by a lack of adequate exposure). An extra advantage of using IML92/IFL92 as a benchmark is that the Actual to Expected ratios are both more stable and somewhat closer to 100% whilst the earlier table IM80/IF80, which measures UK annuitant mortality back in 1980 is a poor fit and is generally accepted in the UK as being inadequate for current pricing and valuation use. Given that the UK Institute of Actuaries is currently in the process of graduating its 2000 annuitant mortality table, it might well be worth waiting for the issue of that table and evaluating its adequacy as an appropriate benchmark before making any recommendations on the choice of an appropriate benchmark table (including whether there should be an updating the current solvency standard). The Committee believes that it is desirable for Australia to develop its own annuitant mortality table, which can then be used as a benchmark table for future investigations. As mentioned in the previous section this would require a much higher participation rate amongst industry players so that the experience of all key market players is included in the investigation. Given that this has not been the case to date, we recognise that this is a goal that can only be achieved in the longer-term.


4.4.6. Mortality trend The results have also been re-expressed against the insured lives mortality table IA90-92 to look at the mortality trend (see Table 4.4.5 below). Table 4.4.5: Ratio (%) of actual to expected deaths for annuitants, durations 2 and over, by

period of investigation and sex. Expected deaths are based on IA 90-92 M and F.

PERIOD OF RATIO (%) OF A/E FOR CURTATE DURATION 2+ INVESTIGATION MALE FEMALE

1992-1994 75 88 1995-1997 75 96 1998-1999 76 82

The mortality trend since 1992-94 shows almost no change for males but a modest improvement rate of about 1.25% p.a. for females (with the 1995-97 results looking rather anomalous and thus highlighting the potential volatility of results over the short-term). However, one should not read too much into that trend (see also next Section on qualifications) because

• the same companies are not consistently represented in all the 3 different periods and • joint-life annuitants have only been included in the last 2 investigations and thus do not

appear in the 1992-94 investigation.

4.4.7. Qualifications Due care should be exercised in interpreting any of the above annuitant mortality results because

• the volume of data is still fairly small with fewer than 1000 deaths, • the 1998-99 experience may not be representative of the whole industry as many companies

(including 2 key players) did not participate in the investigation and • the number of deaths could be understated due to late reporting and processing as well as

under-reporting (depending on how any survival certificate requirement operates in practice).


5. BIBLIOGRAPHY

Australian Government Actuary (2004). Australian Life Tables 2000-02, National Capital Printing. Continuous Mortality Investigation. (1990). Standard Tables of Mortality Based on the 1979-82 Experiences. Institute of Actuaries and Faculty of Actuaries, Continuous Mortality Investigation Reports, 10. Continuous Mortality Investigation. (1999). Standard Tables of Mortality Based on the 1991-94 Experiences. Institute of Actuaries and Faculty of Actuaries, Continuous Mortality Investigation Reports, 17. Fabrizio, E. & Gratton, W. K. (1994). Pricing dread disease insurance. Transactions of the IAA, 1994, pages 292-468. The IAA Mortality Committee (1995a). Report on the Mortality Investigation 1990-1992. Quarterly Journal of the IAA, March 1995, Pages 60-87. The IAA Mortality Committee (1995b). Mortality Investigation IA90-92 M and F Graduated Mortality Tables. Quarterly Journal of the IAA, March 1995, Pages 88-109. The IAA Mortality Committee (1996). Report on the Mortality Investigation 1992-1994. IAA. The IAA Mortality Committee (1999). Report on the Mortality Investigation 1995-1997. Convention 1999 June. IAA. The IAA Mortality Committee (2001). Mortality Investigation IA95-97 M and F Graduated Mortality Tables. IAA Life Insurance Actuarial Standards Board (2002). Actuarial Standard 2.03 Solvency standard. Life Insurance Actuarial Standards Board: Canberra. Martin, G. C. (1995). Group life experience study. Transactions of the IAA, 1995, pages 1204-1221. Pollard, J. H. Standard error for claims weighted by policy size. (Unpublished note).

A. TABULATIONS OF THE DATA

The Appendix contains tabulated numbers of exposed-to-risk and claims in five- or ten-year age bands by sex and curtate duration for the subsets of the data described in the table below. All tables are for Australian standard lives' experience in the period of investigation 1998-1999. Ratios of actual to expected claims are given for each policy type by sex and curtate duration in either five- or ten-year age bands depending on the volume of data. Expected claims have been calculated over the age range for which suitable rates are available. The tables used in calculating “expected” claims are as follows, except where it is stated explicitly otherwise.

• Death: IA95-97 M and F (IAA Mortality Committee, 1995b) for life insurances. These are ultimate rates. IM & IF80Base (Ultimate) (Continuous Mortality Investigation, 1990) for annuities.

• Trauma:

E. Fabrizio and W. K. Gratton. (1994). Pricing Dread Disease Insurance, Transactions of the IAA 1994, pp. 292-468. These rates are population incidence rates by sex for a range of “dread disease” events and are applied in the reports without adjustment for insured lives.

• TPD:

G. Martin. (May 1995). Group Life Experience Study, Appendix A. In particular, the comparisons of female to male experience use male rates to calculate expected claims for both male and female actual to expected ratios.


INDEX OF APPENDICIES A. TABULATIONS OF THE DATA................................................................................. 54 A.1. Overview of all policy types for Death Only cover ....................................................... 56 A.2. Death Only cover: All non-annuity insurances with Death Only cover combined........ 58 A.3. Death Only cover: Whole of life and endowment insurances, with and without term

riders............................................................................................................................... 70 A.4. Death Only cover: Unbundled policies, both capital guaranteed and investment-linked

........................................................................................................................................ 76 A.5. Death Only cover: Temporary insurances where premiums are fully guaranteed......... 82 A.6. Death Only cover: Temporary insurances where premiums may be reviewed.............. 87 A.7. Female vs male experience: All non-annuity insurances combined, Death Only cover 93 A.8. Smoker-rated experience: All non-annuity insurances with Death Only cover combined

........................................................................................................................................ 94 A.9. Smoker-rated experience: Term insurances with Death Only cover............................ 102 A.10. Trauma cover: All non-annuity insurances combined ................................................. 110 A.11. Female vs male experience: All non-annuity insurances combined, Trauma cover .... 116 A.12. Smoker-rated experience: All non-annuity insurances combined, Trauma cover ....... 117 A.13. TPD cover: All non-annuity insurances combined ...................................................... 124 A.14. Female vs male experience: All non-annuity insurances combined, TPD cover......... 130 A.15. Smoker-rated experience: All non-annuity insurances combined, TPD cover ............ 131 A.16. Immediate annuities ..................................................................................................... 138 A.17. Female vs male experience: Immediate annuities........................................................ 141 A.18. Death Only Policies by Sum Insured Band.................................................................. 142 B. ESTIMATION OF STANDARD ERRORS IN ACTUAL TO EXPECTED RATIOS

...................................................................................................................................... 144 C. SPECIFICATIONS TO THE MORTALITY INVESTIGATION............................... 145 C.1. Introduction .................................................................................................................. 145 C.2. Inclusions and Exclusions ............................................................................................ 146 C.3. Reporting of Data ......................................................................................................... 147 C.4. Classification of Data ................................................................................................... 148 C.5. Supplied Edit Software................................................................................................. 150 C.6. Changes to the Specifications ...................................................................................... 150


A.1. Overview of all policy types for Death Only cover

Table A.1.1: Exposed-to-risk, Death Only cover, by sex, policy type and duration. Standard lives experience 1998-1999 POLICY CURTATE DURATIONTYPE 0 1 2 3 4 5-9 10+ TOTALMales

(i) 4,626.0 5,173.0 6,047.5 7,240.5 8,255.5 124,692.0 1,424,928.5 1,580,963.0(ii) 14,797.5 11,102.5 7,779.5 6,380.5 8,567.0 132,841.0 115,163.0 296,631.0(iii) 64.5 171.0 274.0 385.0 637.0 6,783.0 11,092.5 19,407.0(iv) 71,850.5 72,958.5 74,719.0 66,466.5 54,056.5 147,073.5 84,748.0 571,872.5

(i)-(iv) 91,338.5 89,405.0 88,820.0 80,472.5 71,516.0 411,389.5 1,635,932.0 2,468,873.5

(v) 2,092.0 1,357.5 842.0 660.5 681.0 1,244.5 880.5 7,758.0Females

(i) 3746 3978 4462 5155.5 5843 80276 417385.5 520,846.0(ii) 6826 4936.5 3470.5 3148.5 4597.5 78856 43889 145,724.0(iii) 45 112.5 204.5 304 503 4895 10444.5 16,508.5(iv) 43462.5 42252.5 42938 40331 35133 96426.5 48241 348,784.5

(i)-(iv) 54,079.5 51,279.5 51,075.0 48,939.0 46,076.5 260,453.5 519,960.0 1,031,863.0

(v) 1,233.5 793.0 470.0 316.5 272.0 466.0 272.0 3,823.0Persons

(i)-(iv) 145,418.0 140,684.5 139,895.0 129,411.5 117,592.5 671,843.0 2,155,892.0 3,500,736.5All Policies 148,743.5 142,835.0 141,207.0 130,388.5 118,545.5 673,553.5 2,157,044.5 3,512,317.5


Table A.1.2: Death claims, Death Only cover, by sex, policy type and duration. Standard lives experience 1998-1999 POLICY CURTATE DURATION TYPE 0 1 2 3 4 5-9 10+ TOTAL Males

(i) 5 10 4 8 13 293 12,376 12,709 (ii) 15 15 9 5 7 127 173 351 (iii) 0 1 1 1 1 12 23 39 (iv) 71 75 108 90 76 269 163 852

(i)-(iv) 91 101 122 104 97 701 12,735 13,951

(v) 2 2 1 0 1 1 5 12 Females

(i) 2 2 2 4 6 153 1,851 2,020 (ii) 1 2 3 0 4 52 38 100 (iii) 0 1 0 0 0 3 16 20 (iv) 23 17 35 29 33 64 80 281

(i)-(iv) 26 22 40 33 43 272 1,985 2,421

(v) 0 0 3 0 1 0 0 4 Persons

(i)-(iv) 117 123 162 137 140 973 14,720 16,372 All Policies 119 125 166 137 142 974 14,725 16,388


A.2. Death Only cover: All non-annuity insurances with Death Only cover combined

Table A.2.1: Exposed-to-risk, All non-annuity insurances, Death Only cover, by 5 year age groups and duration. Standard male lives 1998-1999

Ages CURTATE DURATIONAttained 0 1 2 3 4 5-9 10+ TOTAL

0-4 27.0 35.0 40.0 65.0 73.5 0.0 0.0 240.55-9 9.0 13.0 16.5 40.5 160.0 2,796.5 0.0 3,035.5

10-14 487.0 425.0 341.5 304.0 215.5 2,189.5 5,268.0 9,230.515-19 915.0 762.5 612.5 592.5 663.5 3,985.0 14,736.5 22,267.520-24 2,873.5 2,322.0 2,147.5 2,016.0 1,888.5 9,282.5 24,971.5 45,501.525-29 8,245.5 6,818.5 6,205.0 5,680.5 5,234.5 43,961.0 45,330.0 121,475.030-34 13,444.5 12,206.5 11,286.5 10,175.5 9,206.5 62,286.5 87,422.5 206,028.535-39 17,091.5 16,547.0 16,260.5 14,413.0 12,988.0 75,249.5 155,278.0 307,827.540-44 16,441.5 16,436.0 16,512.5 14,831.0 12,888.0 71,120.5 207,546.0 355,775.545-49 14,378.5 14,893.5 15,164.0 13,561.5 11,865.5 61,933.0 258,994.5 390,790.550-54 10,849.0 11,478.5 11,960.5 10,885.5 9,347.5 44,926.5 280,917.5 380,365.055-59 4,742.5 5,297.0 5,785.0 5,417.0 4,682.0 21,034.0 211,804.5 258,762.060-64 1,425.5 1,737.5 2,023.0 1,966.5 1,727.5 8,373.0 131,933.0 149,186.065-69 365.5 372.5 398.0 442.5 425.5 2,319.0 60,046.0 64,369.070-74 42.5 58.0 61.5 74.0 123.0 1,165.0 52,677.0 54,201.075-79 0.5 2.5 5.5 7.5 26.5 632.0 42,161.0 42,835.580-84 0.0 0.0 0.0 0.0 0.5 136.0 31,941.5 32,078.085-89 0.0 0.0 0.0 0.0 0.0 0.0 18,317.0 18,317.090-94 0.0 0.0 0.0 0.0 0.0 0.0 6,500.5 6,500.595-99 0.0 0.0 0.0 0.0 0.0 0.0 87.0 87.0

TOTAL 91,338.5 89,405.0 88,820.0 80,472.5 71,516.0 411,389.5 1,635,932.0 2,468,873.5


Table A.2.2: Exposed-to-risk, All non-annuity insurances, Death Only cover, by 5 year age groups and duration. Standard female lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-4 26.5 34.5 35.5 62 64.5 0 0 223.05-9 10 11 11.5 33.5 151 2446 0 2,663.0

10-14 428.5 350 291 235.5 157 1971.5 4589.5 8,023.015-19 528.5 449.5 409 452.5 499.5 3300 12336 17,975.020-24 2138.5 1628 1423 1215.5 983.5 5180 17956.5 30,525.025-29 6559.5 5405.5 4812 4446.5 4137 21960 23676.5 70,997.030-34 10192.5 9029 8437.5 8180 7761 41134 34208.5 118,942.535-39 11399 10844.5 10882 10586.5 10243.5 54171 60198.5 168,325.040-44 9593 9576.5 9783 9434.5 9109.5 51769.5 84429.5 183,695.545-49 7265.5 7492 7790.5 7351.5 6787 40547 91412.5 168,646.050-54 4207 4416 4814 4525.5 3922 23340.5 78556.5 123,781.555-59 1295.5 1475 1691 1739 1529 8512.5 44282.5 60,524.560-64 318.5 406 487.5 457.5 442.5 2808.5 22036.5 26,957.065-69 102 133 162 166.5 172.5 1216 12707.5 14,659.570-74 15 28.5 40 47 84.5 1088.5 11323 12,626.575-79 0 0.5 5.5 5.5 31.5 763.5 9776 10,582.580-84 0 0 0 0 1 244.5 6762.5 7,008.085-89 0 0 0 0 0 0.5 4083.5 4,084.090-94 0 0 0 0 0 0 1602.5 1,602.595-99 0 0 0 0 0 0 22 22.0

TOTAL 54079.5 51279.5 51075 48939 46076.5 260453.5 519960 1,031,863.0


Table A.2.3: Death claims, All non-annuity insurances, Death Only cover, by duration. Standard male lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTAL 0-4 0 0 0 0 0 0 0 0 5-9 0 0 0 0 0 0 0 0

10-14 0 0 0 0 0 0 0 0 15-19 1 0 0 0 0 2 3 6 20-24 1 0 0 1 1 2 20 25 25-29 0 5 7 4 3 26 37 82 30-34 7 2 4 3 5 25 72 118 35-39 10 18 8 7 9 49 142 243 40-44 13 13 15 14 12 79 231 377 45-49 15 18 10 17 17 99 369 545 50-54 18 18 27 26 16 94 687 886 55-59 15 18 26 16 20 88 907 1,090 60-64 10 6 19 8 6 68 890 1,007 65-69 1 3 4 5 2 28 761 804 70-74 0 0 2 3 5 61 1301 1,372 75-79 0 0 0 0 1 61 1647 1,709 80-84 0 0 0 0 0 19 2294 2,313 85-89 0 0 0 0 0 0 2166 2,166 90-94 0 0 0 0 0 0 1199 1,199 95-99 0 0 0 0 0 0 9 9

TOTAL 91 101 122 104 97 701 12,735 13,951


Table A.2.4: Death claims, All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard female lives 1998-1999


0-4 0 0 0 0 0 0 0 0 5-9 0 0 0 0 0 1 0 1

10-14 0 0 0 0 0 0 1 1 15-19 0 0 0 0 1 2 3 6 20-24 0 0 1 0 1 2 2 6 25-29 2 1 2 0 2 3 11 21 30-34 3 1 1 2 1 9 11 28 35-39 3 6 4 6 1 21 34 75 40-44 7 3 5 4 4 32 56 111 45-49 6 5 7 6 11 41 125 201 50-54 2 4 10 3 10 29 150 208 55-59 2 1 7 9 6 18 127 170 60-64 1 1 1 1 2 21 105 132 65-69 0 0 2 2 3 19 110 136 70-74 0 0 0 0 0 21 174 195 75-79 0 0 0 0 1 32 230 263 80-84 0 0 0 0 0 21 303 324 85-89 0 0 0 0 0 0 332 332 90-94 0 0 0 0 0 0 207 207 95-99 0 0 0 0 0 0 4 4

TOTAL 26 22 40 33 43 272 1,985 2,421


Table A.2.5: Ratios (%) of actual to expected death claims, All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+

0-4 5-9

10-14 15-19 165 77 33 42(19) 38(17) 20-24 41 59 63 26 95 76(16) 71(14) 25-29 0 96 148 92 75 78 107 92(12) 95(11) 30-34 75 24 51 43 79 58 119 94(10) 87(8) 35-39 78 144 65 64 92 86 121 109(8) 104(7) 40-44 80 80 92 95 94 113 112 112(6) 109(6) 45-49 70 82 45 85 97 108 95 98(5) 95(4) 50-54 68 64 92 97 69 85 98 96(3) 95(3) 55-59 75 80 106 69 100 98 98 98(3) 97(3) 60-64 94 46 124 53 45 107 85 87(3) 86(3) 65-69 20 57 71 80 33 83 84 84(3) 84(3) 70-74 130 162 158 195 91 93(3) 93(3) 75-79 81 207 82 84(2) 84(2) 80-84 188 87 87(2) 87(2) 85-89 90 90(2) 90(2) 90-94 97 97(3) 97(3) 95-99 43 43(14) 43(14)

TOTAL 69 74 86 78 81 104 90 90(1) 90(1)


Table A.2.6: Ratios (%) of actual to expected death claims, All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9 333 333(333) 305(305)

10-14 0 133 96(96) 86(86) 15-19 865 246 102 133(59) 147(60) 20-24 276 399 149 43 66(33) 86(35) 25-29 115 70 156 181 51 177 116(31) 115(27) 30-34 86 32 34 71 37 63 93 77(17) 70(14) 35-39 51 107 71 109 19 75 107 92(12) 87(11) 40-44 90 39 63 52 54 76 80 79(8) 75(7) 45-49 67 54 72 66 131 82 109 101(8) 99(7) 50-54 27 51 116 37 142 69 105 97(7) 97(7) 55-59 56 24 148 184 139 75 100 96(8) 101(8) 60-64 65 51 42 45 94 153 95 102(9) 100(9) 65-69 149 144 204 181 100 107(9) 109(9) 70-74 136 108 110(8) 109(8) 75-79 122 163 91 96(6) 96(6) 80-84 192 90 93(5) 93(5) 85-89 90 90(5) 90(5) 90-94 88 88(6) 88(6) 95-99 85 85(43) 85(43)

TOTAL 61 51 88 75 101 97 95 95(2) 95(2)


Table A.2.7: Amount exposed-to-risk ($), All non-annuity insurances, Death Only cover, by 5 year age group and duration.

Standard male lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTAL0-4 1,783,189 3,310,596 3,215,413 3,356,452 3,085,525 0 0 14,751,1745-9 728,910 714,984 868,067 1,814,885 5,979,234 100,391,079 0 110,497,158

10-14 32,326,530 27,446,567 21,553,472 17,898,761 10,685,935 70,747,882 119,424,205 300,083,34915-19 76,724,780 59,629,411 45,571,068 40,108,512 39,919,480 150,831,421 227,467,698 640,252,36920-24 387,264,776 249,642,900 183,853,751 154,487,564 121,568,352 383,742,664 339,957,522 1,820,517,52825-29 1,772,501,973 1,227,430,025 915,199,545 715,510,549 557,680,605 2,134,395,736 777,465,311 8,100,183,74330-34 3,565,116,087 2,831,509,671 2,270,001,774 1,816,380,957 1,447,486,233 4,790,324,519 2,342,927,401 19,063,746,64135-39 4,899,555,918 4,269,962,420 3,739,102,156 3,131,995,836 2,612,908,215 8,134,097,903 5,024,438,428 31,812,060,87440-44 4,463,978,094 4,181,158,079 3,850,875,493 3,396,277,976 2,870,825,290 9,457,411,908 6,610,726,121 34,831,252,96145-49 3,665,524,816 3,534,101,842 3,292,368,797 2,972,517,773 2,653,208,685 8,844,173,123 7,264,570,727 32,226,465,76250-54 2,601,708,586 2,587,811,222 2,458,133,768 2,255,893,987 1,987,755,795 6,457,144,646 6,423,799,460 24,772,247,46255-59 1,007,107,292 1,063,926,275 1,051,290,999 972,216,210 869,402,849 2,664,519,155 3,539,468,125 11,167,930,90460-64 302,028,519 323,016,775 344,407,216 325,671,886 278,578,053 935,709,078 1,508,392,384 4,017,803,91065-69 69,867,398 58,549,072 52,635,308 54,852,866 56,974,398 170,537,644 486,371,938 949,788,62270-74 10,331,356 7,332,612 5,381,278 6,149,144 8,725,184 33,276,607 294,211,557 365,407,73675-79 27,500 169,292 404,082 874,942 148,750 8,071,373 172,170,851 181,866,78880-84 0 0 0 0 1,718 474,832 103,208,916 103,685,46585-89 0 0 0 0 0 0 48,012,319 48,012,31990-94 0 0 0 0 0 0 13,467,347 13,467,34795-99 0 0 0 0 0 0 123,712 123,712

TOTAL 22,856,575,720 20,425,711,739 18,234,862,183 15,866,008,296 13,524,934,297 44,335,849,566 35,296,204,018 170,540,145,818


Table A.2.8: Amount exposed-to-risk ($), All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard female lives 1998-1999


0-4 2,465,189 2,760,306 2,493,688 3,367,332 2,711,408 0 0 13,797,9225-9 887,723 711,816 717,156 1,409,734 5,089,566 82,618,724 0 91,434,717

10-14 25,097,351 23,097,423 18,929,072 12,960,352 6,770,470 60,441,051 99,165,521 246,461,23815-19 44,620,515 35,572,382 30,134,821 30,375,956 26,934,598 111,962,738 174,891,712 454,492,72120-24 303,004,031 190,173,218 140,072,110 106,352,028 70,247,068 190,745,430 225,218,290 1,225,812,17425-29 1,270,086,758 901,495,404 698,265,286 571,087,284 460,259,890 1,078,803,200 323,848,977 5,303,846,79730-34 2,260,333,877 1,822,211,647 1,510,602,045 1,333,768,376 1,144,806,414 3,096,320,165 776,378,503 11,944,421,02635-39 2,522,732,799 2,241,911,955 2,031,998,464 1,851,464,421 1,668,901,601 5,231,189,217 1,885,008,042 17,433,206,49840-44 1,860,369,629 1,742,606,923 1,674,745,585 1,577,066,586 1,460,054,287 5,211,470,854 2,742,434,607 16,268,748,46945-49 1,190,460,943 1,182,011,065 1,154,087,526 1,089,593,247 994,082,080 3,741,098,903 2,637,594,567 11,988,928,32950-54 560,913,933 560,155,769 587,054,280 553,753,261 476,835,936 1,773,058,758 1,743,689,545 6,255,461,47955-59 161,174,654 169,309,552 166,568,549 165,583,718 144,771,111 535,304,804 662,822,973 2,005,535,36060-64 34,183,233 39,501,194 44,380,871 37,914,294 35,590,496 119,600,137 222,328,303 533,498,52765-69 6,322,633 8,411,739 8,334,971 7,887,234 9,692,871 29,529,307 91,298,409 161,477,16370-74 1,710,906 1,800,661 1,639,025 2,234,292 2,250,443 15,712,636 58,662,544 84,010,50675-79 0 100,000 267,123 77,102 231,757 5,575,216 45,849,351 52,100,54780-84 0 0 0 0 7,874 1,225,150 27,727,425 28,960,44985-89 0 0 0 0 0 1,453 13,415,487 13,416,93990-94 0 0 0 0 0 0 3,581,313 3,581,31395-99 0 0 0 0 0 0 24,475 24,475

TOTAL 10,244,364,170 8,921,831,049 8,070,290,568 7,344,895,213 6,509,237,866 21,284,657,738 11,733,940,040 74,109,216,644


Table A.2.9: Death claim amounts ($), All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard male lives 1998-1999


0-4 5-9

10-14 15-19 43057 657975 49785 750,81720-24 7335 57410 39502 85086 260198 449,53125-29 1207526 539088 248716 174876 1287663 630543 4,088,41230-34 842007 350554 658901 191123 841048 1289250 1605818 5,778,70135-39 3362463 2948861 1880805 1567630 2307049 4492032 3948375 20,507,21540-44 1763886 4827748 5555839 2969678 2421498 8657794 6219522 32,415,96545-49 2416471 2852201 2722082 3206880 3591961 11640095 9561035 35,990,72550-54 2695663 4788106 4770020 3859808 4073747 16187270 12673916 49,048,53055-59 1727455 3477845 4540667 1985790 2124223 7566194 14307297 35,729,47160-64 1957494 459057 2158978 1369079 580934 8946481 8373784 23,845,80765-69 100000 154000 201029 680636 32700 768101 5825953 7,762,41970-74 152264 293569 189154 726214 6630209 7,991,41075-79 4287 472932 5951908 6,429,12780-84 61966 7691620 7,753,58685-89 5267335 5,267,33590-94 2640968 2,640,96895-99 19942 19,942

TOTAL 14,915,831 21,065,898 23,179,673 16,430,319 16,380,979 62,839,053 91,658,208 246,469,961


Table A.2.10: Death claim amounts ($), All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard female lives 1998-1999


0-4 5-9 199,800 199,800

10-14 199,800 199,80015-19 5,192 32,957 210,800 248,94920-24 90,000 18,232 14,144 29,949 152,32525-29 395,000 125,000 344,406 234,243 28,767 84,042 1,211,45830-34 647,401 136,413 88,200 486,960 254,151 565,027 201,365 2,379,51735-39 318,213 365,345 1,139,869 790,570 46,349 1,585,730 917,139 5,163,21540-44 1,066,993 250,816 461,397 622,870 564,406 2,580,665 2,244,194 7,791,34145-49 636,125 489,072 1,280,580 1,250,452 2,113,763 3,186,096 3,745,695 12,701,78350-54 115,647 522,000 746,342 64,152 701,576 1,459,210 2,928,483 6,537,41055-59 70,232 101,000 567,709 969,782 485,014 934,260 2,324,688 5,452,68560-64 7,534 136,500 55,440 20,000 125,752 1,365,211 866,057 2,576,49465-69 107,608 18,573 181,801 263,839 1,017,877 1,589,69870-74 157,929 975,258 1,133,18775-79 5,335 158,789 870,722 1,034,84680-84 113,508 1,147,545 1,261,05385-89 1,154,599 1,154,59990-94 600,857 600,85795-99 6,746 6,746

TOTAL 3,257,145.0 2,126,146.0 4,881,551.0 4,223,359.0 4,735,814.0 12,645,932.0 19,525,816.0 51,395,763.0


Table A.2.11: Ratios (%) of actual to expected death claim amounts, All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


0-4 5-9

10-14 15-19 84 665 36 297(40) 224 (42) 20-24 2 44 39 26 91 57(27) 44 (26) 25-29 130 78 46 41 79 107 87(17) 74 (17) 30-34 34 18 42 15 84 39 99 59(15) 52 (14) 35-39 91 91 67 66 116 73 103 85(13) 83 (12) 40-44 40 117 146 88 85 92 95 93(12) 99 (11) 45-49 45 55 56 73 91 89 88 89(11) 83 (10) 50-54 43 76 79 69 83 103 80 91(10) 86 (9) 55-59 40 76 102 48 58 67 94 82(10) 79 (10) 60-64 87 19 84 56 28 127 72 93(12) 83 (12) 65-69 11 19 28 90 4 32 82 69(11) 64 (13) 70-74 111 196 87 85 84 84(10) 86 (10) 75-79 61 134 73 76(6) 75 (7) 80-84 176 91 91(4) 91 (4) 85-89 84 84(4) 84 (4) 90-94 104 104(6) 104 (6) 95-99 67 67(32) 67 (32)

TOTAL 47 70 83 65 75 88 86 86(3) 83 (3)


Table A.2.12: Ratios (%) of actual to expected death claim amounts, All non-annuity insurances, Death Only cover, by 5 year age group and duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9 1965 1965(433) 1791(412)

10-14 1250 801(274) 635(281) 15-19 82 120 513 355(153) 278(164) 20-24 254 102 29 51 41(133) 81(129) 25-29 117 52 185 190 10 98 30(92) 82(77) 30-34 83 22 17 105 64 52 74 57(59) 58(49) 35-39 25 32 108 82 5 58 92 67(39) 68(33) 40-44 71 18 34 49 48 61 99 74(31) 63(27) 45-49 43 34 90 93 172 69 114 88(27) 97(25) 50-54 12 52 71 6 83 46 93 70(29) 64(27) 55-59 16 21 122 210 120 63 124 97(39) 113(37) 60-64 5 73 26 11 73 240 80 135(47) 109(51) 65-69 159 29 229 105 131 125(61) 129(59) 70-74 74 117 109(41) 101(43) 75-79 88 115 74 78(27) 77(27) 80-84 210 83 88(22) 88(22) 85-89 98 98(20) 98(20) 90-94 116 116(27) 116(27) 95-99 130 130(156) 130(156)

TOTAL 46 32 76 71 88 67 103 85(11) 83(11)


A.3. Death Only cover: Whole of life and endowment insurances, with and without term riders

Table A.3.1: Exposed-to-risk, Whole of life and endowment insurances, Death Only cover, by duration. Standard male lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+TOTAL

0-4 27.0 35.0 40.0 64.5 73.5 240.05-9 9.0 13.0 16.0 39.0 158.0 2,734.5 2,969.5

10-14 385.5 337.0 271.0 235.0 170.5 2,045.5 4,472.5 7,917.015-19 466.5 446.5 418.5 488.0 548.0 2,852.0 13,580.5 18,800.020-24 676.5 724.0 936.0 1,068.5 1,047.5 5,928.0 22,938.5 33,319.025-29 570.5 703.5 883.5 1,104.0 1,296.5 21,577.0 40,980.0 67,115.030-34 565.5 643.5 782.0 1,021.0 1,144.5 22,678.0 72,909.5 99,744.035-39 599.0 689.0 853.0 1,021.0 1,160.0 20,691.0 124,887.0 149,900.040-44 567.5 600.0 705.5 871.5 984.0 15,839.5 166,456.0 186,024.045-49 328.5 440.0 490.5 563.5 674.0 12,418.5 212,775.5 227,690.550-54 231.5 281.0 321.0 375.0 433.0 8,604.0 240,904.5 251,150.055-59 114.0 141.5 176.5 204.0 261.5 4,375.0 190,761.5 196,034.060-64 56.5 86.5 98.0 118.0 155.5 2,189.0 123,917.0 126,620.565-69 25.5 27.5 46.5 52.5 67.5 1,094.0 58,844.0 60,157.570-74 3.0 4.0 5.5 11.5 54.5 921.0 52,523.5 53,523.075-79 1.0 4.0 3.5 26.5 609.0 42,137.5 42,781.580-84 0.5 136.0 31,936.5 32,073.085-89 18,317.0 18,317.090-94 6,500.5 6,500.595-99 87.0 87.0

TOTAL 4,626.0 5,173.0 6,047.5 7,240.5 8,255.5 124,692.0 1,424,928.5 1,580,963.0


Table A.3.2: Exposed-to-risk, Whole of life and endowment insurances, Death Only cover, by duration. Standard female lives 1998-1999


0-4 26.5 34.5 35.5 62.0 64.0 222.55-9 9.5 10.5 11.5 32.5 149.5 2,382.0 2,595.5

10-14 332.0 270.0 218.0 163.0 110.5 1,848.0 3,954.5 6,896.015-19 299.5 302.0 301.0 383.0 399.0 2,266.0 11,336.5 15,287.020-24 457.5 438.0 498.0 522.5 528.0 3,402.5 16,444.5 22,291.025-29 500.0 583.5 653.5 752.5 862.0 9,673.0 21,927.5 34,952.030-34 475.5 516.5 664.5 819.0 928.0 13,407.5 27,835.5 44,646.535-39 538.0 559.0 651.5 825.5 936.5 13,546.5 43,826.5 60,883.540-44 499.5 551.5 611.0 678.0 763.0 11,666.0 59,651.5 74,420.545-49 311.5 363.5 406.5 448.0 491.5 9,218.0 66,784.5 78,023.550-54 157.0 183.0 202.5 234.0 263.0 5,995.0 61,259.0 68,293.555-59 85.0 94.5 108.0 127.5 143.5 2,772.0 38,025.0 41,355.560-64 35.0 39.0 54.0 47.5 67.5 1,288.0 20,396.5 21,927.565-69 14.5 24.5 31.5 43.0 56.5 893.0 12,459.5 13,522.570-74 5.0 8.0 11.0 13.0 49.0 941.0 11,258.0 12,285.075-79 4.0 4.5 30.5 733.5 9,760.5 10,533.080-84 1.0 243.5 6,758.5 7,003.085-89 0.5 4,083.0 4,083.590-94 1,602.5 1,602.595-99 22.0 22.0

TOTAL 3,746.0 3,978.0 4,462.0 5,155.5 5,843.0 80,276.0 417,385.5 520,846.0


Table A.3.3: Death claims, Whole of life and endowment insurances, Death Only cover, by duration. Standard male lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTAL 0-4 5-9

10-14 15-19 1 1 3 5 20-24 1 1 19 21 25-29 1 2 1 12 32 48 30-34 1 1 9 64 75 35-39 1 1 1 2 16 118 139 40-44 1 2 1 2 20 188 214 45-49 1 1 1 16 313 332 50-54 1 2 1 16 610 630 55-59 1 1 1 26 834 863 60-64 1 1 1 1 27 833 864 65-69 1 1 2 19 749 772 70-74 1 51 1299 1351 75-79 1 61 1646 1708 80-84 19 2294 2313 85-89 2166 2166 90-94 1199 1199 95-99 9 9

TOTAL 5 10 4 8 13 293 12376 12,709


Table A.3.4: Death claims, Whole of life and endowment insurances, Death Only cover, by duration. Standard female lives 1998-1999


0-4 5-9

10-14 15-19 1 2 3 20-24 2 2 4 25-29 1 11 12 30-34 1 0 9 10 35-39 1 1 5 28 35 40-44 1 1 9 37 48 45-49 1 1 13 84 99 50-54 1 2 2 10 121 136 55-59 6 106 112 60-64 16 96 112 65-69 1 1 17 108 127 70-74 21 173 194 75-79 1 32 228 261 80-84 21 303 324 85-89 332 332 90-94 207 207 95-99 4 4

TOTAL 2 2 2 4 6 153 1,851 2,020


Table A.3.5: Ratios (%) of actual to expected death claims, Whole of life and endowment insurances, Death Only cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9

10-14 15-19 333 54 35 39(19) 36(18) 20-24 111 113 98 78(18) 78(17) 25-29 184 294 100 73 102 92(14) 93(14) 30-34 0 185 141 57 127 110(13) 110(13) 35-39 222 193 156 230 103 125 121(10) 122(10) 40-44 178 338 116 206 129 113 115(8) 115(8) 45-49 157 122 102 87 98 98(5) 97(5) 50-54 177 292 107 76 101 100(4) 100(4) 55-59 162 111 88 138 100 101(3) 100(3) 60-64 231 146 110 80 158 85 86(3) 86(3) 65-69 264 127 200 116 85 85(3) 85(3) 70-74 70 204 91 93(3) 93(3) 75-79 81 215 82 84(2) 84(2) 80-84 188 87 87(2) 87(2) 85-89 90 90(2) 90(2) 90-94 97 97(3) 97(3) 95-99 43 43(14) 43(14)

TOTAL 96 161 52 86 99 130 90 91(1) 91(1)


Table A.3.6: Ratios (%) of actual to expected death claims, Whole of life and endowment insurances, Death Only cover, by duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9

10-14 15-19 1070 74 61(43) 85(49) 20-24 226 47 77(39) 72(36) 25-29 39 191 144(42) 134(39) 30-34 563 93 63(21) 60(20) 35-39 347 236 72 122 110(19) 109(19) 40-44 247 201 95 75 78(12) 78(11) 45-49 259 165 113 100 102(10) 101(10) 50-54 276 472 422 93 108 107(9) 110(9) 55-59 76 97 95(9) 94(9) 60-64 249 94 103(10) 102(10) 65-69 278 202 218 100 108(10) 109(10) 70-74 156 108 112(8) 111(8) 75-79 125 169 90 96(6) 96(6) 80-84 192 90 93(5) 93(5) 85-89 90 90(5) 90(5) 90-94 88 88(6) 88(6) 95-99 85 85(43) 85(43)

TOTAL 80 70 59 101 104 135 94 96(2) 96(2)


A.4. Death Only cover: Unbundled policies, both capital guaranteed and investment-linked

Table A.4.1: Exposed-to-risk, Unbundled policies, both capital guaranteed and investment-linked, Death Only cover, by duration. Standard male lives 1998-1999


0-4 5-9 41.5 41.5

10-14 45.5 47.5 49.0 56.5 37.0 114.0 674.5 1,024.015-19 215.5 125.5 74.5 36.5 63.0 978.0 886.5 2,379.520-24 700.5 568.0 391.5 395.0 483.5 2,746.5 1,363.5 6,648.525-29 1,580.5 1,151.0 816.5 816.5 1,238.0 17,715.5 3,559.0 26,877.030-34 2,363.0 1,652.5 1,104.5 1,055.5 1,623.5 25,852.0 11,843.5 45,494.535-39 2,984.0 2,089.0 1,370.5 1,184.5 1,747.5 28,353.5 21,109.0 58,838.040-44 2,699.5 2,052.5 1,387.0 1,055.0 1,421.0 23,284.5 23,573.5 55,473.045-49 2,115.5 1,675.0 1,268.5 906.0 1,028.0 17,504.0 22,314.5 46,811.550-54 1,437.5 1,194.5 901.0 619.5 646.5 10,816.0 17,741.0 33,356.055-59 530.0 430.5 342.5 210.5 225.5 4,191.5 8,982.5 14,913.060-64 118.0 105.5 60.0 38.0 49.0 1,162.0 3,032.0 4,564.565-69 8.0 10.0 13.5 5.5 4.0 70.5 71.0 182.570-74 1.0 0.5 1.5 0.5 10.0 12.5 26.075-79 1.5 1.580-84 85-89 90-94 95-99

TOTAL 14,797.5 11,102.5 7,779.5 6,380.5 8,567.0 132,841.0 115,163.0 296,631.0


Table A.4.2: Exposed-to-risk, Unbundled policies, both capital guaranteed and investment-linked, Death Only cover, by duration. Standard female lives 1998-1999


0-4 0.5 0.5 31.5 32.55-9 44.50 41.50 46.50 56.50 38.00 98.50 534.00 859.5

10-14 65.00 37.00 29.00 24.00 61.00 901.50 776.00 1,893.515-19 329.00 251.50 185.00 183.00 181.50 1,441.00 1,003.50 3,574.520-24 882.00 615.50 391.50 388.50 609.50 8,545.00 1,345.00 12,777.025-29 1,354.50 879.00 524.50 534.00 845.50 14,522.50 4,146.50 22,806.530-34 1,461.00 1,020.50 681.50 652.00 1,063.50 16,710.00 7,444.50 29,033.035-39 1,177.50 920.50 685.50 576.00 868.00 15,476.00 8,990.50 28,694.040-44 886.50 686.50 536.50 432.50 574.00 12,360.50 9,197.00 24,673.545-49 502.00 385.50 308.00 229.00 272.00 6,557.00 7,037.50 15,291.050-54 112.50 88.50 71.00 65.00 68.00 1,815.50 2,776.50 4,997.055-59 10.50 10.00 11.50 7.50 16.50 346.50 612.50 1,015.060-64 0.50 0.50 42.50 23.00 66.565-69 7.00 2.50 9.570-74 1.00 1.075-79 1.50 1.580-84 85-89 90-94 95-99

TOTAL 6,826.0 4,936.5 3,470.5 3,148.5 4,597.5 78,857.5 43,889.0 145,725.5


Table A.4.3: Death claims, Unbundled policies, both capital guaranteed and investment-linked, Death Only cover, by duration. Standard male lives 1998-1999


0-4 5-9

10-14 2 2 15-19 1 1 1 8 5 16 20-24 1 1 1 11 7 21 25-29 4 4 1 15 18 42 30-34 2 1 2 21 26 52 35-39 3 2 1 1 3 31 23 64 40-44 3 3 2 2 1 25 42 78 45-49 2 3 1 10 33 49 50-54 1 2 0 4 19 26 55-59 1 1 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

TOTAL 15 15 9 5 7 127 173 351


Table A.4.4: Death claims, Unbundled policies, both capital guaranteed and investment-linked, Death Only cover, by duration. Standard female lives 1998-1999


0-4 5-9

10-14 1 1 15-19 1 1 20-24 2 2 25-29 1 6 2 9 30-34 1 11 1 13 35-39 9 4 13 40-44 1 1 2 12 14 30 45-49 1 1 8 10 20 50-54 2 5 7 55-59 1 1 2 4 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

TOTAL 1 2 3 4 52 38 100


Table A.4.5: Ratios (%) of actual to expected death claims, Unbundled policies, both capital guaranteed and investmentlinked, Death Only cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9

10-14 10155 1237(875) 1020(722) 15-19 1971 4155 3005 1193 962 1092(303) 1233(308) 20-24 170 209 245 476 610 521(123) 420(96) 25-29 332 455 105 111 671 204(36) 185(32) 30-34 122 87 262 117 318 180(26) 171(24) 35-39 133 127 96 112 228 145 144 145(20) 145(19) 40-44 113 148 146 193 72 109 180 145(18) 144(17) 45-49 64 121 75 39 100 73(11) 69(10) 50-54 34 91 15 44 33(7) 33(7) 55-59 70 2(2) 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

TOTAL 82 105 87 64 72 80 90 86(5) 85(5)


Table A.4.6: Ratios (%) of actual to expected Death claims, Unbundled policies, both capital guaranteed and investmentlinked, Death Only cover, by duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9

10-14 7105 1006(1006) 810(810) 15-19 7840 231(231) 20-24 532 314(222) 258(182) 25-29 969 261 558 301(107) 298(99) 30-34 330 221 69 186(54) 169(49) 35-39 104 103 104(29) 94(26) 40-44 134 179 281 95 190 130(25) 133(25) 45-49 91 142 52 87 67(16) 66(15) 50-54 17 39 29(11) 27(10) 55-59 531 20 26 23(14) 30(15) 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99

TOTAL 21 55 111 124 82 78 80(8) 81(8)


A.5. Death Only cover: Temporary insurances where premiums are fully guaranteed

Table A.5.1: Exposed-to-risk, Temporary insurances where premiums are fully guaranteed, Death Only cover, by duration. Standard male lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+TOTAL 0-4 5-9 10-14 1.5 2.0 3.515-19 3.0 4.5 3.0 5.5 3.0 31.0 50.020-24 5.0 6.5 10.5 13.0 13.0 57.5 11.0 116.525-29 4.0 9.0 23.0 46.0 67.5 508.5 17.5 675.530-34 5.0 14.0 19.5 60.5 107.0 1,148.0 112.0 1,466.035-39 4.5 15.0 38.0 49.5 119.5 1,470.5 709.0 2,406.040-44 9.5 31.5 42.5 52.0 93.5 1,256.5 1,863.0 3,348.545-49 13.5 40.0 44.0 53.5 78.5 992.5 3,013.0 4,235.050-54 8.0 20.5 47.5 48.0 74.0 733.0 2,842.0 3,773.055-59 9.5 17.0 24.0 29.0 43.0 407.5 1,572.0 2,102.060-64 1.5 11.0 17.0 19.5 26.0 133.5 727.5 936.065-69 1.0 2.0 5.0 7.0 10.0 39.5 191.0 255.570-74 5.0 34.5 39.575-79 80-84 85-89 90-94 95-99 TOTAL 64.5 171.0 274.0 385.0 637.0 6,783.0 11,092.5 19,407.0


Table A.5.2: Exposed-to-risk, Temporary insurances where premiums are fully guaranteed, Death Only cover, by duration. Standard female lives 1998-1999


0-4 5-9 0.5 0.5

10-14 0.5 2 3 2.5 2 10.015-19 1.5 0.5 1 1.5 3 17 24.520-24 2 1 6 8 7.5 25 6 55.525-29 5 8.5 17 38.5 68 352.5 13.5 503.030-34 5 19 31 61.5 106 1076.5 397.5 1,696.535-39 9 22 41 57 105 1282 1823 3,339.040-44 8.5 20 31 47 93 1018.5 3115 4,333.045-49 4 17 42.5 40 64.5 634 2714 3,516.050-54 5.5 11.5 14 28.5 27.5 333 1613 2,033.055-59 4 9 14.5 12.5 19 126 556.5 741.560-64 2 3.5 5 4.5 20.5 155.5 191.065-69 2 2 8.5 41 53.570-74 1 1 9.5 11.575-79 80-84 85-89 90-94 95-99

TOTAL 45.0 112.5 204.5 304.0 503.0 4,895.0 10,444.5 16,508.5


Table A.5.3: Death claims, Temporary insurances where premiums are fully guaranteed, Death Only cover, by duration. Standard male lives 1998-1999


0-4 5-9

10-14 15-19 20-24 25-29 1 1 30-34 1 1 35-39 1 1 40-44 1 1 1 3 45-49 1 3 2 6 50-54 3 7 10 55-59 1 1 1 4 7 60-64 1 6 7 65-69 2 2 70-74 1 1 75-79 80-84 85-89 90-94 95-99

TOTAL 1 1 1 1 12 23 39


Table A.5.4: Death claims, Temporary insurances where premiums are fully guaranteed, Death Only cover, by duration. Standard female lives 1998-1999


0-4 5-9

10-14 15-19 20-24 25-29 30-34 35-39 1 2 3 40-44 2 4 6 45-49 1 2 3 50-54 3 3 55-59 3 3 60-64 1 1 65-69 1 1 70-74 75-79 80-84 85-89 90-94 95-99

TOTAL 1 3 16 20


Table A.5.5: Ratios (%) of actual to expected death claims, Temporary insurances where premiums are fully guaranteed. Death Only cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


25-29 259 251(251) 199(199) 30-34 1297 115(115) 100(100) 35-39 91 61(61) 55(55) 40-44 1919 80 53 64(45) 91(52) 45-49 1582 206 44 84(37) 80(36) 50-54 166 100 114(36) 108(34) 55-59 925 559 56 59 58(26) 78(29) 60-64 99 108 106(40) 99(37) 65-69 75 62(44) 57(40) 70-74 785 106(106) 106(106)

TOTAL 277 168 129 88 116 77 87(15) 89(14) Table A.5.6: Ratios (%) of actual to expected death claims, Temporary insurances where premiums are fully guaranteed. Death

Only cover, by duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


35-39 8893 205 122(86) 115(81) 40-44 244 156 178(73) 171(70) 45-49 128 60 72(42) 69(40) 50-54 104 86(50) 83(48) 55-59 190 155(90) 145(84) 60-64 134 119(119) 110(110) 65-69 295 241(241) 223(223)

TOTAL 898 77 126 115(26) 109(25)


A.6. Death Only cover: Temporary insurances where premiums may be reviewed

Table A.6.1: Exposed-to-risk, Temporary insurances where premiums may be reviewed, Death Only cover, by duration. Standard male lives 1998-1999


0-4 0.5 0.55-9 0.5 1.5 2 20.5 24.5

10-14 56 40.5 21.5 11 6 30 121 286.015-19 230 186 116.5 62.5 49.5 124 269.5 1,038.020-24 1491.5 1023.5 809.5 539.5 344.5 550.5 658.5 5,417.525-29 6090.5 4955 4482 3714 2632.5 4160 773.5 26,807.530-34 10511 9896.5 9380.5 8038.5 6331.5 12608.5 2557.5 59,324.035-39 13504 13754 13999 12158 9961 24734.5 8573 96,683.540-44 13165 13752 14377.5 12852.5 10389.5 30740 15653.5 110,930.045-49 11921 12738.5 13361 12038.5 10085 31018 20891.5 112,053.550-54 9172 9982.5 10691 9843 8194 24773.5 19430 92,086.055-59 4089 4708 5242 4973.5 4152 12060 10488.5 45,713.060-64 1249.5 1534.5 1848 1791 1497 4888.5 4256.5 17,065.065-69 331 333 333 377.5 344 1115 940 3,773.570-74 39.5 53 55.5 61 68 229 106.5 612.575-79 0.5 1.5 1.5 4 21.5 23.5 52.580-84 5 5.085-89 90-94 95-99

TOTAL 71,850.5 72,958.5 74,719.0 66,466.5 54,056.5 147,073.5 84,748.0 571,872.5


Table A.6.2: Exposed-to-risk, Temporary insurances where premiums may be reviewed with Death Only cover, by duration. Standard female lives 1998-1999


0-4 0.5 0.55-9 1 1.5 32 34.5

10-14 51.5 36.5 23.5 13.5 6.5 25 101 257.515-19 162.5 110 78 44 36.5 115.5 223.5 770.020-24 1350 937.5 734 502 266.5 311.5 502.5 4,604.025-29 5172.5 4198 3750 3267 2597.5 3389.5 390.5 22,765.030-34 8357.5 7614.5 7217.5 6765.5 5881.5 12127.5 1829 49,793.035-39 9391 9243 9508 9052 8138.5 22632.5 7104.5 75,069.540-44 7907.5 8084.5 8455.5 8133.5 7385.5 23609 12672.5 76,248.045-49 6063.5 6425 6805 6431 5657 18334.5 12717 62,433.050-54 3542.5 3836 4289.5 4034 3359.5 10455.5 8647 38,164.055-59 1094 1283 1497.5 1534 1298.5 3799 2924.5 13,430.560-64 273 355 418.5 397.5 354 1153.5 872 3,823.565-69 87 108.5 130.5 121 114 272 184 1,017.070-74 10 20.5 29 34 34.5 139.5 53 320.575-79 0.5 1.5 1 1 29 15.5 48.580-84 1 4 5.085-89 0.5 0.590-94 95-99

TOTAL 43,462.5 42,252.5 42,938.0 40,331.0 35,133.0 96,426.5 48,241.0 348,784.5


Table A.6.3: Death claims, Temporary insurances where premiums may be reviewed, Death Only cover, by duration. Standard male lives 1998-1999


0-4 5-9

10-14 15-19 1 1 20-24 1 1 2 25-29 4 4 3 1 5 17 30-34 6 1 3 2 4 5 21 35-39 5 13 7 7 6 17 6 61 40-44 10 10 13 12 10 37 16 108 45-49 12 14 9 15 13 49 31 143 50-54 14 13 25 23 15 50 28 168 55-59 13 14 25 14 18 51 36 171 60-64 9 4 17 7 5 36 32 110 65-69 1 2 3 4 0 9 10 29 70-74 2 3 4 9 2 20 75-79 1 1 80-84 85-89 90-94 95-99

TOTAL 71 75 108 90 76 269 163 852


Table A.6.4: Death claims, Temporary insurances where premiums may be reviewed, Death Only cover, by duration. Standard female lives 1998-1999


0-4 5-9 1 1

10-14 1 1 15-19 1 1 2 20-24 1 1 25-29 2 1 2 2 7 30-34 3 2 1 3 9 35-39 3 3 4 5 1 5 3 24 40-44 6 3 4 4 4 12 11 44 45-49 5 4 6 6 8 15 25 69 50-54 1 4 9 1 7 11 16 49 55-59 2 1 7 9 6 10 13 48 60-64 1 1 1 2 4 6 15 65-69 2 1 2 2 1 8 70-74 1 1 75-79 2 2 80-84 85-89 90-94 95-99

TOTAL 23 17 35 29 33 64 80 281


Table A.6.5: Ratios (%) of actual to expected death claims, Temporary insurances where premiums may be reviewed, Death Only cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


0-4 5-9

10-14 15-19 1237 395(395) 250(250) 20-24 80 181 98(98) 41(41) 25-29 106 117 106 50 159 134(60) 109(30) 30-34 83 15 46 36 91 57 48(21) 52(14) 35-39 49 125 66 76 80 91 91 91(19) 82(12) 40-44 77 74 91 94 97 121 102 115(16) 106(11) 45-49 68 74 46 84 87 107 100 104(12) 90(8) 50-54 62 53 95 95 74 82 58 72(8) 78(7) 55-59 75 70 112 66 102 99 80 90(10) 91(8) 60-64 96 35 122 51 44 97 98 98(12) 89(9) 65-69 22 43 63 75 0 57 76 66(15) 59(12) 70-74 144 195 233 154 73 128(39) 151(34) 75-79 91 49(49) 43(43) 80-84 85-89 90-94 95-99

TOTAL 65 64 87 78 80 96 82 90(4) 87(3)


Table A.6.6: Ratios (%) of actual to expected death claims, Temporary insurances where premiums may be reviewed, Death Only cover, by duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


0-4 5-9 25740 25740(25740) 23753(23753)

10-14 6073 5003(5003) 3642(3642) 15-19 3512 1788 2370(1676) 1628(1151) 20-24 544 170(170) 25-29 146 89 200 287 111(56) 30-34 104 85 49 71 61(35) 51(21) 35-39 62 63 81 106 24 42 79 51(18) 61(14) 40-44 94 46 58 60 66 62 105 77(16) 71(12) 45-49 67 50 71 75 114 66 158 104(16) 97(13) 50-54 16 58 117 14 116 59 103 79(15) 80(12) 55-59 66 28 167 209 164 94 158 122(25) 145(22) 60-64 76 59 51 117 72 143 103(32) 84(23) 65-69 186 99 210 87 66 79(46) 117(41) 70-74 136 38(38) 25(25) 75-79 521 190(135) 175(124) 80-84 85-89 90-94 95-99

TOTAL 66 46 89 77 100 65 129 90(7) 89(6)


A.7. Female vs male experience: All non-annuity insurances combined, Death Only cover

Table A.7.1: Female vs male mortality experience, All non-annuity insurances, Death Only cover, by duration. Standard lives 1998-1999. Both female and male expected claims are based on IA95-97 M. Estimated standard errors of ratios (%) are shown in parentheses


20-24 191 179 14 27(15) 50(20) 25-29 25 36 84 23 57 43(13) 42(11) 30-34 56 67 33 82 24 54 39 41(10) 40(9) 35-39 45 50 74 116 14 59 62 58(9) 58(8) 40-44 91 39 67 45 47 56 60 58(7) 57(6) 45-49 79 55 136 65 123 63 97 87(8) 88(7) 50-54 29 58 92 28 164 60 79 74(6) 75(6) 55-59 49 20 93 175 91 51 68 65(6) 69(6) 60-64 43 70 21 53 131 91 71 75(7) 73(7) 65-69 123 105 359 125 68 73(7) 75(7) 70-74 36 62 62(5) 61(5) 75-79 81 43 60 62(4) 62(4) 80-84 60 63 64(4) 64(4) 85-89 68 68(4) 68(4) 90-94 70 70(5) 70(5) 95-99 178 178(107) 178(107)

TOTAL 60 47 76 65 87 62 68 68(2) 68(2)


A.8. Smoker-rated experience: All non-annuity insurances with Death Only cover combined

Table A.8.1: Exposed-to-risk, All non-annuity insurances, Death Only cover, by duration. Standard smoker lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-9 1.5 1.0 30.5 33.010-19 274.5 240.5 186.0 123.5 103.5 420.0 265.5 1,613.520-29 2,593.5 2,013.5 1,627.5 1,285.5 1,116.0 4,977.0 768.5 14,381.530-39 7,111.0 6,909.5 6,423.0 5,317.0 4,480.5 16,172.0 3,084.0 49,497.040-49 5,769.0 6,157.0 6,204.5 5,298.5 4,185.0 17,647.0 5,061.0 50,322.050-59 2,094.5 2,453.0 2,740.5 2,390.0 1,856.0 7,674.0 3,163.0 22,371.060-69 142.0 200.0 260.5 272.5 183.5 854.5 452.5 2,365.570-79 2.5 2.5 0.5 3.0 9.0 29.5 17.5 64.580-89 0.0 0.0 0.0 0.0 0.0 2.0 0.0 2.090-99

TOTAL 17,988.5 17,977.0 17,442.5 14,690.0 11,933.5 47,806.5 12,812.0 140,650.0FEMALES

0-9 1.5 1 2 4 42.5 51.010-19 161 123.5 111 94 76.5 390.5 196.5 1,153.020-29 1624.5 1242 927.5 786.5 679.5 2821 375.5 8,456.530-39 3716 3432 3234.5 2943 2666 10440.5 1761 28,193.040-49 2342.5 2449.5 2419 2228.5 1981 8948 2652.5 23,021.050-59 634 721 835.5 795.5 606 2983.5 1203 7,778.560-69 33.5 44 54 65.5 56.5 261 110 624.570-79 1.5 2 5 5 4.5 28.5 7 53.580-89 0.090-99

TOTAL 8,514.5 8,014.0 7,587.5 6,920.0 6,074.0 25,915.5 6,305.5 69,331.0


Table A.8.2: Exposed-to-risk, All non-annuity insurances, Death Only cover, by duration. Standard non-smoker lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-9 0.5 1.5 1.5 114.5 118.010-19 325.5 224 123 68 35 314 482 1,571.520-29 7405 5841.5 5016.5 4324 3277.5 8110 981 34,955.530-39 22343.5 20641.5 19510 17192.5 14405 41418 8410.5 143,921.040-49 24250.5 24246.5 24334.5 21713 18387 61061.5 22585.5 196,578.550-59 13249 14033.5 14591.5 13408.5 11413 36336 19253.5 122,285.060-69 1606 1850 2077.5 2035.5 1785.5 5951 3661 18,966.570-79 39.5 56 63 72.5 71 282 137.5 721.580-89 1 10.5 11.590-99

TOTAL 69,219.0 66,893.0 65,716.5 58,815.5 49,375.5 153,588.0 55,521.5 519,129.0FEMALES

0-9 0.5 92 92.510-19 188 133.5 87 51.5 43 300.5 439 1,242.520-29 6178.5 4852.5 4209.5 3633.5 2874.5 5557.5 585.5 27,891.530-39 16918 15451 14834 14244.5 12986.5 38721.5 7198.5 120,354.040-49 13797 13818.5 14220 13497 12385 45966 17831 131,514.550-59 4687.5 4966.5 5409.5 5157 4425 15629 8338 48,612.560-69 363 460 545.5 506 462.5 1481.5 854.5 4,673.070-79 9 22 36 38.5 40.5 204.5 48 398.580-89 12 8 20.090-99

TOTAL 42,141.0 39,704.5 39,341.5 37,128.0 33,217.0 107,964.5 35,302.5 334,799.0


Table A.8.3: Death claims, All non-annuity insurances, Death Only cover, by duration. Standard smoker lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTAL MALES

0-9 10-19 1 1 20-29 1 1 1 5 8 30-39 5 8 2 2 5 16 1 39 40-49 5 11 10 9 6 47 6 94 50-59 8 6 13 14 10 31 16 98 60-69 1 1 7 5 1 10 5 30 70-79 1 1 80-89 90-99

TOTAL 19 27 33 31 22 110 29 271 FEMALES

0-9 10-19 20-29 1 1 1 3 30-39 2 3 7 1 13 40-49 3 1 5 2 1 8 3 23 50-59 3 6 4 6 10 4 33 60-69 1 1 1 1 2 6 70-79 1 1 80-89 1 1 90-99 0

TOTAL 5 6 13 10 8 28 10 80


Table A.8.4: Death claims, All non-annuity insurances, Death Only cover, by duration. Standard non-smoker lives 1998-1999 Ages CURTATE DURATION

Attained 0 1 2 3 4 5-9 10+ TOTAL MALES

0-9 10-19 1 1 20-29 1 3 4 3 2 5 2 20 30-39 11 11 8 7 6 16 7 66 40-49 21 16 15 21 20 64 31 188 50-59 23 29 38 28 24 84 46 272 60-69 10 7 16 7 4 34 24 102 70-79 2 3 4 8 2 19 80-89 1 1 90-99

TOTAL 66 66 83 69 60 213 112 669 FEMALES

0-9 10-19 1 1 20-29 2 2 3 1 8 30-39 3 7 5 4 2 10 4 35 40-49 8 7 7 8 12 33 25 100 50-59 4 2 10 6 8 17 19 66 60-69 1 2 2 3 8 4 20 70-79 1 3 4 80-89 90-99

TOTAL 18 16 26 20 28 71 55 234


Table A.8.5: Ratios (%) of actual to expected death claims, All non-annuity insurances, Death Only cover, by duration. Standard smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL 5+ 2+

MALES 0-9

10-19 959 119 (177) 20-29 64 79 100 129 71 112 (50) 92 (35) 30-39 97 159 43 52 153 136 44 108 121 (29) 100 (20) 40-49 73 150 134 141 119 221 97 155 193 (27) 168 (19) 50-59 131 84 159 194 178 135 164 147 144 (21) 157 (17) 60-69 83 61 322 215 63 138 130 150 136 (35) 163 (31) 70-79 120 57 75 (75) 61 (61) 80-89 90-99

TOTAL 88 118 139 148 132 161 125 137 157 (16) 142 (12) FEMALES

0-9 10-19 20-29 306 407 134 134 118 (118) 135 (95) 30-39 124 229 150 121 104 146 (51) 117 (35) 40-49 131 41 209 91 52 91 112 101 96 (29) 105 (24) 50-59 206 355 247 480 164 161 208 163 (44) 228 (42) 60-69 373 319 266 326 336 174 101 (72) 168 (75) 70-79 219 124 172 (172) 131 (131) 80-89 1086 102 90-99

TOTAL 86 100 211 173 162 125 129 136 112 (23) 116 (19)


Table A.8.6: Ratios (%) of actual to expected death claims, All non-annuity insurances, Death Only cover, by duration. Standard non-smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL 5+ 2+

MALES 0-9

10-19 919 132 359 (359) 239 (239) 20-29 17 66 103 90 79 80 261 74 100 (38) 95 (24) 30-39 68 73 56 56 57 53 112 63 63 (13) 60 (9) 40-49 71 54 50 79 88 85 107 77 91 (9) 82 (7) 50-59 58 68 85 68 69 76 76 73 76 (7) 75 (5) 60-69 71 44 89 39 25 65 73 61 68 (9) 62 (7) 70-79 118 152 218 102 47 96 83 (26) 108 (25) 80-89 1086 102 90-99

TOTAL 62 60 74 67 68 75 83 71 79 (6) 74 (4) FEMALES

0-9 10-19 1783 391 728 (728) 554 (554) 20-29 123 180 393 67 108 61 (61) 134 (55) 30-39 41 103 76 63 34 56 114 65 66 (18) 63 (13) 40-49 58 50 49 59 97 71 135 75 90 (12) 81 (9) 50-59 42 20 90 56 87 53 110 66 73 (12) 75 (10) 60-69 49 0 65 68 113 97 86 76 93 (27) 88 (20) 70-79 30 352 64 96 (48) 68 (34) 80-89 90-99

TOTAL 52 46 71 57 89 65 121 71 86 (9) 79 (7)


Table A.8.7: Smoker vs non-smoker mortality experience, All non-annuity insurances, Death Only cover, by sex. Standard lives 1998-1999 of durations 5 and over.

Ages NON_SMOKER SMOKER Ratio of Smoker A/E to Approx SE of ratio (%) Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%) MALES 10-29 9,887.0 8 6,431.0 6 113 (61) 30-39 49,828.5 23 19,256.0 17 192 (61) 40-49 83,647.0 95 22,708.0 53 213 (36) 50-59 55,589.5 130 10,837.0 47 190 (32)

Over 60 10,043.0 69 1,356.0 16 182 (51) TOTAL 209,109.5 325 60,618.5 139 195 (20)

FEMALES 10-29 6,882.5 2 3,783.5 1 91 (111) 30-39 45,920.0 14 12,201.5 8 221 (98) 40-49 63,797.0 58 11,600.5 11 107 (35) 50-59 23,967.0 36 4,186.5 14 224 (70)

Over 60 2,608.5 16 406.5 4 132 (74) TOTAL 143,267.0 126 32,221.0 38 156 (29)


Table A.8.8 : Smoker vs non-smoker mortality experience, All non-annuity insurances, Death Only cover, by sex. Standard lives 1998-1999 of durations 2 and over

Ages NON_SMOKER SMOKER Ratio of Smoker A/E to Approx SE of ratio (%) Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%) MALES 10-29 9887 8 6,431.0 6 99 (53) 30-39 49828.5 23 19,256.0 17 169 (54) 40-49 83647 95 22,708.0 53 205 (35) 50-59 55589.5 130 10,837.0 47 208 (35)

Over 60 10,043.0 69 1,356.0 16 227 (63) TOTAL 208995 325 60588 139 198 (20)

FEMALES 10-29 6882.5 2 3,783.5 1 80 (98) 30-39 45920 14 12,201.5 8 187 (83) 40-49 63797 58 11,600.5 11 130 (43) 50-59 23967 36 4,186.5 14 306 (96)

Over 60 2,608.5 16 406.5 4 198 (111) TOTAL 143175 126 32178.5 38 191 (35)

Table A.8.9: Smoker vs non-smoker mortality experience, All non-annuity insurances with Death Only cover, by sex. Standard

lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses Curtate Ratio of Smoker A/E to non-smoker A/E Duration MALES FEMALES

0 143(37) 164(83) 1 196(45) 218(104) 2 188(39) 299(101) 3 223(48) 303(117) 4 195(49) 182(73)


A.9. Smoker-rated experience: Term insurances with Death Only cover

Table A.9.1: Exposed-to-risk, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard smoker lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-9 0 0 0 0 0 11.5 0 11.510-19 69.5 66.5 50.5 27.5 29.5 95 125 463.520-29 1878.5 1418 1165 858 664.5 1478 308 777030-39 5640.5 5825.5 5678.5 4673.5 3756 9772 1624.5 36970.540-49 4632 5242.5 5569 4832 3722 12783 3490.5 4027150-59 1751.5 2147 2485 2208.5 1686 6074 2254 1860660-69 122.5 183 243 254 161 717.5 299 198070-79 2.5 2.5 0.5 2 7 21 14 49.580+ 0.0

TOTAL 14097.0 14885.0 15191.5 12855.5 10026.0 30952.0 8115.0 106122.0FEMALES

0-9 0 0 0 1 2 15 0 1810-19 53.5 32.5 31.5 24.5 18 89 82.5 331.520-29 1359.5 1027 767 623 504.5 1005 167 545330-39 3194.5 3034.5 2963 2686.5 2349 6662 1101 21990.540-49 2010 2163.5 2199 2050 1777.5 6392.5 2033 18625.550-59 558.5 651 769 733 550 2202 838.5 630260-69 33 40.5 49.5 56.5 49.5 226 63.5 518.570-79 1.5 2 4 4 3.5 17.5 3.5 3680+

TOTAL 7,211 6,951 6,783 6,179 5,254 16,609 4,289 53,275


Table A.9.2: Exposed-to-risk, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard nonsmoker lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-9 0 0 0.5 1.5 1.5 6 0 9.510-19 198.5 155.5 87.5 45.5 25 38.5 87 637.520-29 5675 4556 4092.5 3299 2195 2849 505 23171.530-39 18309 17823 17659.5 15395 12313 25832 5237.5 11256940-49 20410.5 21243.5 22160 20013 16649 47436.5 18511 166423.550-59 11486 12538.5 13438.5 12597.5 10636.5 30046.5 16289.5 10703360-69 1453.5 1682.5 1934 1913 1674.5 5171 2981 16809.570-79 37.5 52 56.5 63 61 229.5 68 567.580+ 0 0 0 0 0 0 1.5 1.5

TOTAL 57570.0 58051.0 59429.0 53327.5 43555.5 111609.0 43680.5 427222.5FEMALES

0-9 0 0 0 0 0 7 0 710-19 149 112.5 70 33 25 40.5 77.5 507.520-29 5147 4107 3696 3095.5 2296.5 2461.5 329.5 2113330-39 14521.5 13819 13742.5 13076.5 11585 26552 5315.5 9861240-49 11948.5 12344 13054.5 12494 11218.5 34233 14948 110240.550-59 4069 4466 5015.5 4827.5 4094.5 11742.5 6765 4098060-69 327 423 499 461 417.5 1179.5 645.5 3952.570-79 8.5 19 26.5 31 32 151 34 30280+ 0 0 0 0 0 1 3 4

TOTAL 36170.5 35290.5 36104.0 34018.5 29669.0 76368.0 28118.0 275738.5


Table A.9.3: Death claims, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard smoker lives 1998-1999

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL MALES

0-9 10-19 20-29 1 1 3 5 30-39 4 5 2 2 3 9 25 40-49 3 11 8 8 6 33 5 74 50-59 8 5 13 11 9 25 8 79 60-69 1 1 7 4 10 5 28 70-79 1 1 80+

TOTAL 16 23 31 25 18 81 18 212 FEMALES

0-9 0 10-19 0 20-29 1 1 2 30-39 2 0 3 2 1 8 40-49 3 1 4 2 1 5 3 19 50-59 3 6 4 6 8 3 30 60-69 1 1 1 1 1 5 70-79 80+

TOTAL 5 6 12 10 8 15 8 64


Table A.9.4: Death claims, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard non-smoker lives 1998-1999


0-9 10-19 1 1 20-29 1 3 3 3 1 1 1 13 30-39 7 9 8 7 6 11 5 53 40-49 18 13 14 19 17 50 28 159 50-59 17 22 36 26 23 70 40 234 60-69 9 5 13 7 4 34 21 93 70-79 2 3 4 8 1 18 80+

TOTAL 52 52 76 65 55 175 96 571 FEMALES

0-9 10-19 1 1 20-29 2 2 2 6 30-39 3 3 4 4 2 4 2 22 40-49 7 6 6 8 11 20 21 79 50-59 3 2 10 6 7 12 15 55 60-69 1 1 1 3 6 3 15 70-79 3 3 80+

TOTAL 16 11 23 19 25 43 44 181


Table A.9.5: Ratios (%) of actual to expected Death claims, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL 5+ 2+ MALES

0-9 10-19 20-29 91 112 265 83 219 (126) 116 (58) 30-39 98 118 48 59 110 126 93 108 (36) 86 (21) 40-49 54 176 120 138 133 213 115 152 191 (31) 163 (21) 50-59 156 79 175 165 176 138 116 142 132 (23) 149 (18) 60-69 97 67 349 185 164 194 167 173 (45) 183 (36) 70-79 184 77 105 (105) 85 (85) 80+

TOTAL 92 118 146 133 125 166 115 136 154 (15) 146 (11) FEMALES

0-9 10-19 20-29 0 370 492 138 122 (122) 30-39 145 250 66 187 81 84 (49) 84 (34) 40-49 153 47 184 99 57 79 146 103 96 (34) 105 (27) 50-59 0 227 386 268 529 177 176 234 177 (53) 260 (50) 60-69 0 395 345 309 376 0 285 174 65 (65) 165 (83) 70-79 80+

TOTAL 99 112 215 190 183 96 168 139 113 (24) 149 (20)


Table A.9.6: Ratios (%) of actual to expected Death claims, Temporary insurances with reviewable premiums, Death Only cover, by duration. Standard non-smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL 5+ 2+ MALES

0-9 10-19 20-29 23 85 95 118 60 46 251 73 77 (55) 90 (30) 30-39 53 69 62 62 67 58 127 64 70 (17) 66 (11) 40-49 72 50 51 77 82 85 117 77 94 (11) 82 (7) 50-59 49 58 87 67 70 76 79 71 77 (7) 76 (5) 60-69 70 34 78 42 27 74 78 63 76 (10) 65 (7) 70-79 137 179 259 128 51 120 110 (37) 140 (33) 80+ (0)

TOTAL 57 54 74 68 68 78 89 71 81 (5) 76 (4) FEMALES

0-9 0 10-19 10971 885 20-29 147 205 327 107 0 (0) 127 (63) 30-39 47 49 66 69 39 32 75 49 40 (16) 50 (12) 40-49 59 48 46 64 98 58 136 71 82 (13) 76 (9) 50-59 36 22 97 60 82 49 108 65 71 (14) 75 (11) 60-69 54 36 38 125 92 85 68 90 (30) 78 (21) 70-79 519 67 104 (60) 72 (42) 80+ 0 (0)

TOTAL 54 35 68 59 88 53 121 66 74 (8) 73 (6)


Table A.9.7: Smoker vs non-smoker mortality experience, Temporary insurances with reviewable premiums, Death Only cover, by sex. Standard lives 1998-1999 of durations 5 and over.

Ages NON_SMOKER SMOKER Ratio of Smoker A/E to Approx SE of ratio (%) Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%) MALES 10-29 3,479.5 3 2,006.0 3 177 (145) 30-39 31,069.5 16 11,396.5 9 155 (64) 40-49 65,947.5 78 16,273.5 38 203 (40) 50-59 46,336.0 110 8,328.0 33 171 (34)

Over 60 8,451.0 64 1,051.5 16 211 (59) TOTAL 155,283.5 271 39,055.5 99 189 (22)

FEMALES 10-29 2,909.0 2 1,343.5 0 30-39 31,867.5 6 7,763.0 3 211 (149) 40-49 49,181.0 13 8,425.5 8 116 (52) 50-59 18,507.5 5 3,040.5 11 250 (135)

Over 60 2,014.0 1 310.5 1 59 (83) TOTAL 104,479.0 27 20,883.0 23 152 (43)


Table A.9.8: Smoker vs non-smoker mortality experience, Temporary insurances with reviewable premiums, Death Only cover, by sex. Standard lives 1998-1999 of durations 2 and over.

Ages NON_SMOKER SMOKER Ratio of Smoker A/E Approx SE of ratio (%) Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%) MALES 10-29 13,224.0 10 11,750.5 4 112 (66) 30-39 40,656.0 21 56,764.0 16 130 (43) 40-49 111,315.0 50 75,095.5 60 198 (38) 50-59 105,158.0 85 45,000.5 66 196 (32)

Over 60 50,825.5 33 6,753.5 27 242 (63) TOTAL 321178.5 199 195364 173 191 (20)

FEMALES

10-29 12,125.0 6 3,312.0 1 74 (79) 30-39 70,271.5 16 15,761.5 6 169 (81) 40-49 85,948.0 38 14,452.0 15 138 (42) 50-59 32,445.0 28 5,092.5 27 348 (94)

Over 60 3,481.0 6 477.5 4 181 (117) TOTAL 204270.5 94 39095.5 53 205 (35)

Table A.9.9: Smoker vs non-smoker mortality experience, Temporary insurances with reviewable premiums, Death Only cover, by

sex. Standard lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses. Curtate Ratio of Smoker A/E to non-smoker A/E Duration MALES FEMALES

0 162(46) 185(95) 1 220(55) 320(162) 2 198(42) 315(112) 3 196(46) 324(127) 4 183(50) 208(85)


A.10. Trauma cover: All non-annuity insurances combined

Table A.10.1: Exposed-to-risk, All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999


0-16 271.5 80 66.5 62.5 23 2 506 17-24 2163.5 1280.5 715 438 226 220 10 5,053 25-34 18532.5 16146.5 12974.5 9707 6642.5 5447.5 407 69,858 35-44 23772 24271.5 22681.5 20377.5 16481.5 15015 667.5 123,267 45-54 9683.5 10802 10824.5 10438.5 9045 9637.5 564.5 60,996 55-64 638.5 834 1029 1126 1124.5 1373 83 6,208 65-74 0.5 1 2.5 3 7 75-84 85+

TOTAL 55,062 53,415 48,291 42,151 33,545 31,698 1,732 265,893 Table A.10.2: Exposed-to-risk, All non-annuity insurances, Trauma cover, by duration. Standard female lives 1998-1999.


0-16 251.5 78.5 47.5 60.5 27 3 468 17-24 2143.5 1345.5 788.5 410 175.5 120 8 4,991 25-34 18104.5 16216 13659 11054.5 7855.5 6492 212.5 73,594 35-44 18964.5 20223.5 19578.5 18043.5 14966.5 14876.5 598.5 107,252 45-54 5919.5 6630.5 6854 6559 5718.5 6329 307 38,318 55-64 220 348 424 499 482 619 40.5 2,633 65-74 0.5 0.5 0.5 1.5 3 75-84 85+

TOTAL 45,604 44,842 41,352 36,627 29,226 28,441 1,167 227,258


Table A.10.3: Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999


0-16 17-24 25-34 4 11 6 4 2 1 28 35-44 20 15 19 14 11 5 84 45-54 19 11 18 22 14 12 2 98 55-64 3 3 4 2 1 5 18 65-74 75-84 85+

TOTAL 46 40 47 42 28 23 2 228 Table A.10.4: Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard female lives

1998-1999


0-16 17-24 1 25-34 6 2 3 7 1 1 20 35-44 19 12 10 15 8 4 68 45-54 11 13 8 14 7 6 59 55-64 2 1 2 3 8 65-74 75-84 85+

TOTAL 38 27 23 38 16 14 155 * Includes Heart Attack, Cancer, Stroke and Bypass Surgery.


Table A.10.5: Ratios (%) of actual to expected Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+ 17-24 25-34 23 71 47 41 29 18 17 (17) 37 (8) 35-44 30 22 29 24 23 11 11 (5) 22 (3) 45-54 27 14 22 28 21 17 46 18 (5) 22 (3) 55-64 31 23 25 11 6 23 22 (10) 16 (5) 65-74 75-84 85+

TOTAL 28 22 27 25 20 16 25 16 (3) 22 (2) Table A.10.6: Ratios (%) of actual to expected Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by

duration. Standard female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+ 17-24 25-34 41 15 26 73 14 17 17 (17) 35 (10) 35-44 44 26 22 36 23 11 11 (5) 23 (4) 45-54 34 36 21 39 22 17 16 (7) 24 (4) 55-64 98 25 42 49 46 (27) 30 (12) 65-74 75-84 85+

TOTAL 41 27 23 41 20 17 16 (4) 26 (3) * Includes Heart Attack, Cancer, Stroke and Bypass Surgery.


Table A.10.7: Amounts exposed-to-risk ($), All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999


0-16 12889682.5 3868847 2665154 2517490 913829 104519 22,959,522 17-24 296647586 159586293 84310997 49998458.5 23637266.5 18161202 898294 633,240,097 25-34 4063993307.5 3346826381.5 2559094738 1834779500.5 1174539949.5 824936055 38281250 13,842,451,182 35-44 5705693048.5 5646479647.5 5090884698 4389795894.5 3391948967.5 3030090134.5 101959048 27,356,851,439 45-54 2082810494 2203480224 2169141320 2033200392.5 1699734389.5 1865229119 110546943.5 12,164,142,883 55-64 113778660 139559967 161570664.5 175733305.5 166749469.5 206377264 12423660 976,192,991 65-74 7395 177239.5 342382.5 219276 746,293 75-84 85+

TOTAL 12,275,812,779 11,499,808,755 10,067,667,572 8,486,202,281 6,457,866,254 5,945,117,570 264,109,196 54,996,584,405 Table A.10.8: Amounts exposed-to-risk ($), All non-annuity insurances, Trauma cover, by duration. Standard female lives 1998-

1999


0-16 11392385.5 3717154 1854936.5 2230458 984188 127027.5 20,306,150 17-24 309839685 183380795.5 101558922.5 52224131 20066129 10208784 665190 677,943,637 25-34 3394849717 2865677192 2317087867 1788993789 1207096819.5 903602031.5 17947838.5 12,495,255,255 35-44 3414268176.5 3523824189 3294340305 2956358376.5 2369869730.5 2259983797 68241734 17,886,886,309 45-54 792014109 852513778.5 867648424 829566581.5 702510469 771426467.5 29523324 4,845,203,154 55-64 20663126.5 34124752.5 36672197.5 45677417 42304012 49775868.5 2198479.5 231,415,854 65-74 52550 52550 28295 41104 174,499 75-84 85+

TOTAL 7,943,027,200 7,463,237,862 6,619,215,203 5,675,103,303 4,342,859,643 3,995,165,080 118,576,566 36,157,184,856


Table A.10.9: Trauma claim amounts ($) for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999


0-16 17-24 25-34 1,115,478 801,755 1,389,305 1,122,564 168,996 160,000 4,758,098 35-44 2,907,366 1,928,707 2,621,943 2,196,781 1,703,031 757,257 12,115,085 45-54 2,373,164 2,847,706 3,026,723 4,158,922 1,653,485 1,625,379 105,568 15,790,947 55-64 226,808 271,747 334,557 82,278 112,625 484,421 1,512,436 65-74 75-84 85+

TOTAL 6,622,816 5,849,915 7,372,528 7,560,545 3,638,137 3,027,057 105,568 34,176,566 Table A.10.10: Trauma claim amounts ($) for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard

female lives 1998-1999.


0-16 17-24 25-34 882212 141207 396343 1011564 107161 2,538,487 35-44 2073067 783820 1870216 1891563 1189584 751741 8,559,991 45-54 799936 1043540 777371 2424391 516598 654730 6,216,566 55-64 54036 26627 82192 150000 312,855 65-74 75-84 85+

TOTAL 3809251 1968567 3070557 5409710 1813343 1556471 17,627,899 * Includes Heart Attack, Cancer, Stroke and Bypass Surgery.


Table A.10.11: Ratios (%) of actual to expected Trauma claim amounts ($) for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard male lives 1998-1999


17-24 25-34 29 24 54 59 14 18 18 43 35-44 18 12 18 17 17 8 8 15 45-54 16 18 19 28 13 12 13 12 18 55-64 13 13 13 3 4 15 14 9 65-74 75-84 85+

TOTAL 18 16 21 23 14 11 8 11 18 Table A.10.12: Ratios (%) of actual to expected Trauma claim amounts ($) for the 4 major events*, All non-annuity insurances,

Trauma cover, by duration. Standard female lives 1998-1999


17-24 25-34 32 6 20 64 10 28 35-44 27 10 25 28 22 14 14 23 45-54 19 23 17 54 14 16 15 25 55-64 28 8 19 31 30 15 65-74 75-84 85+

TOTAL 26 13 21 41 17 14 14 24 * Includes Heart Attack, Cancer, Stroke and Bypass Surgery.


A.11. Female vs male experience: All non-annuity insurances combined, Trauma cover

Table A.11.1: Female vs male morbidity experience for all causes*, All non-annuity insurances, Trauma cover, by duration. Standard lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses. Both female and male expected claims are based on Fabrizio & Gratton (1994) male rates.


17-24 87 104 104 (104) 25-34 112 20 86 149 86 290 301 (241) 124 (35) 35-44 93 123 76 139 53 123 111 123 (39) 94 (14) 45-54 82 89 94 119 97 89 64 87 99 (14) 55-64 372 27 67 144 37 32 (24) 53 (21) 65-74 76 75-84 85+

TOTAL 101 84 83 132 78 104 54 99 (19) 98 (9) * In the previous report this table covered just the 4 major events (Heart Attack, Cancer, Stroke and Bypass Surgery) but as there have been problems with obtaining adequate data on cause of claim it was decided to change this table to an ‘all causes’ comparison.


A.12. Smoker-rated experience: All non-annuity insurances combined, Trauma cover

Table A.12.1: Exposed-to-risk, All non-annuity insurances, Trauma cover, by duration. Standard smoker lives 1998-1999.


0-16 77 53 65 57 18 2 272.0 17-24 430.5 276 196.5 143.5 85.5 51 1,183.0 25-34 3498 2970.5 2319 1730.5 1141 736 12,395.0 35-44 3660 3670 3308.5 2912.5 2279.5 1795.5 17 17,643.0 45-54 853 957.5 864 782.5 669.5 646.5 6.5 4,779.5 55-64 32 34.5 53 47.5 49 50.5 0.5 267.0 65-74 75-84 85+

TOTAL 8,550.5 7,961.5 6,806.0 5,673.5 4,242.5 3,281.5 24.0 36,539.5 FEMALES

0-16 71 47 43 51 22 3 237.0 17-24 365.5 241 154.5 100 51 32.5 944.5 25-34 2585 2365 1961.5 1582 1136.5 783.5 1 10,414.5 35-44 2157 2298.5 2170 1932.5 1627.5 1472 10.5 11,668.0 45-54 464 533 518.5 475.5 407.5 459.5 3 2,861.0 55-64 9 15 21 25 23 29.5 122.5 65-74 75-84 85+

TOTAL 5,651.5 5,499.5 4,868.5 4,166.0 3,267.5 2,780.0 14.5 26,247.5


Table A.12.2: Exposed-to-risk, All non-annuity insurances, Trauma cover, by duration. Standard non-smoker lives 1998-1999


MALES 0-16 187 25.5 212.5 17-24 1631 967.5 510.5 291.5 122.5 47 3,570.0 25-34 14928 13125 10618 7960.5 5443.5 3729.5 43.5 55,848.0 35-44 20027.5 20536.5 19311 17442 14163 12645.5 241.5 104,367.0 45-54 8806.5 9825 9942.5 9644.5 8356 8643 293 55,510.5 55-64 605 798.5 974 1077.5 1072 1260 48 5,835.0 65-74 0.5 1 2.5 3 7.0 75-84 85+

TOTAL 46,185.0 45,278.5 41,356.0 36,417.0 29,159.5 26,328.0 626.0 225,350.0 FEMALES

0-16 176.5 30.5 207.0 17-24 1719.5 1077.5 627 309 110.5 35 1 3,879.5 25-34 15435 13798.5 11660.5 9457.5 6667.5 4871.5 35 61,925.5 35-44 16715 17854 17349.5 16085 13283 12490 213.5 93,990.0 45-54 5441 6076.5 6315.5 6076 5294 5574 136.5 34,913.5 55-64 209 330.5 401.5 473 455.5 571.5 21 2,462.0 65-74 0.5 0.5 0.5 1.5 3.0 75-84 85+

TOTAL 39,696.0 39,167.5 36,354.5 32,401.0 25,811.0 23,543.5 407.0 197,380.5


Table A.12.3: Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard smoker lives 1998-1999


MALES 0-16 17-24 25-34 2 1 1 4 35-44 4 2 4 2 2 14 45-54 1 3 2 1 2 1 10 55-64 1 1 65-74 75-84 85+

TOTAL 7 6 7 3 5 1 29 FEMALES

0-16 17-24 25-34 1 2 3 35-44 3 2 1 6 45-54 1 1 1 2 5 55-64 65-74 75-84 85+



Table A.12.4: Trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard non-smoker lives 1998-1999


MALES 0-16 17-24 25-34 2 4 5 4 1 1 17 35-44 16 10 15 12 9 4 66 45-54 18 15 16 20 12 11 2 94 55-64 3 4 4 2 1 4 18 65-74 75-84 85+

TOTAL 39 33 40 38 23 20 2 195 FEMALES

0-16 17-24 1 25-34 6 1 1 7 1 16 35-44 16 12 10 13 7 3 61 45-54 11 13 7 13 5 7 56 55-64 2 1 2 2 7 65-74 75-84 85+



Table A.12.5: Ratios (%) of actual to expected trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


MALES 0-16 17-24 25-34 61 0 44 0 86 34 (34) 35-44 40 20 44 25 31 28 (28) 45-54 17 45 33 18 42 22 22 (22) 24 (29) 55-64 186 65-74 75-84 85+

TOTAL 35 30 38 18 38 9 9 (9) 25 (27) FEMALES

0-16 17-24 25-34 52 121 43 (43) 35-44 64 47 30 29 (29) 12 (19) 45-54 34 35 39 88 39 (39) 55-64 65-74 75-84 85+



Table A.12.6: Ratios (%) of actual to expected trauma claims for the 4 major events*, All non-annuity insurances, Trauma cover, by duration. Standard non-smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses


MALES 0-16 17-24 25-34 14 32 48 50 18 26 25 (25) 36 (39) 35-44 28 17 27 23 21 10 10 (5) 19 (21) 45-54 28 21 22 28 19 17 90 19 (5) 18 (21) 55-64 33 33 26 12 6 20 19 (10) 10 (16) 65-74 75-84 85+

TOTAL 27 21 26 26 18 16 53 17 (4) 18 (21) FEMALES

0-16 17-24 442 254 (254) 25-34 48 9 10 85 17 32 (32) 35-44 42 29 25 35 22 10 10 (6) 21 (24) 45-54 37 39 20 39 17 22 22 (8) 19 (25) 55-64 103 0 26 44 0 36 34 (24) 16 (27) 65-74 75-84 85+



Table A.12.7: Smoker vs non-smoker trauma experience for the 4 major events*, All non-annuity insurances, Trauma cover, by sex. Standard lives 1998-1999 of durations 2 and over

Ages NON_SMOKER SMOKER Ratio of Smoker A/E to Approx SE of ratio (%)Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%)

MALES 25-34 27,795.0 11 5,926.5 2 94 (72) 35-44 63,803.0 40 10,313.0 8 145 (56) 45-54 36,879.0 61 2,969.0 6 132 (56) 55-64 4,431.5 11 200.5 65 and over 6.5 TOTAL 132,915.0 123 19,409.0 16 139 (37) FEMALES 25-34 32,692.0 9 5,464.5 2 136 (106) 35-44 59,421.0 33 7,212.5 3 58 (35) 45-54 23,396.0 32 1,864.0 4 203 (108) 55-64 1,922.5 5 98.5 65 and over 3.0 0 0.0 TOTAL 117,434.5 79 14,639.5 9 116 (41) Table A.12.8: Smoker vs non-smoker trauma experience for the 4 major events*, All non-annuity insurances, Trauma cover, by sex.

Standard lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses

Curtate Ratio(%) of smoker A/E to non-smoker A/E Duration Males Females

0 132 (54) 75 (45) 1 141 (62) 68 (50) 2 148 (61) 140 (86) 3 72 (43) 85 (51) 4 213 (105) 153 (117)

* Includes Heart Attack, Cancer, Stroke and Bypass Surgery.


A.13. TPD cover: All non-annuity insurances combined

Table A.13.1: Exposed-to-risk, All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 173.5 23.5 12 209.015-24 4306 2729.5 1513 840.5 412 651.5 21.5 10,474.025-34 16731.5 14359 11293.5 8137 5754 15774 7979 80,028.035-44 19823 20142 18861 14776.5 10536.5 29032 43218 156,389.045-54 10306 11873 11999.5 9832.5 6902.5 18623 46305.5 115,842.055-64 993 1375 1744.5 1675 1282 3163 13017 23,249.565-74 2 36 38.075-84 2 2.085+

TOTAL 52,333.0 50,502.0 45,411.5 35,261.5 24,889.0 67,243.5 110,591.0 386,231.5 Table A.13.2: Exposed-to-risk, All non-annuity insurances, TPD cover, by duration. Standard female lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 163.5 25.5 4 10 203.015-24 3836.5 2455 1361.5 686 284.5 264 15 8,902.525-34 11841.5 9945 8090.5 6097 4327.5 10096 2607 53,004.535-44 10648 10380 9695.5 7836 6039 17506.5 16186.5 78,291.545-54 3899 4199 4424 3725.5 2772 8210 13954.5 41,184.055-64 312.5 300.5 417.5 451.5 357.5 767.5 2176 4,783.065-74 0.5 6 6.575-84 85+

TOTAL 30,701.0 27,305.0 23,989.0 18,796.0 13,781.0 36,848.0 34,955.0 186,375.0


Table A.13.3: TPD claims, All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999. Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 15-24 1 1 25-34 3 3 2 2 1 2 13 35-44 5 7 5 10 6 7 18 58 45-54 2 5 14 9 8 16 60 114 55-64 1 6 5 5 6 10 41 74 65-74 75-84 85+

TOTAL 11 22 26 24 22 34 121 260 Table A.13.4: TPD claims, All non-annuity insurances, TPD cover, by duration. Standard female lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 15-24 25-34 2 2 1 3 2 1035-44 1 1 3 5 7 1745-54 2 3 3 2 9 10 2955-64 5 1 5 5 1665-74 75-84 85+

TOTAL 5 3 4 12 2 22 24 72


Table A.13.5: Ratios (%) of actual to expected TPD claims, All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


15-24 322 25-34 67 77 64 123 23 80 43(25) 50(19) 35-45 34 46 34 86 73 31 50 43(9) 50(7) 45-54 7 16 44 34 43 32 46 42(5) 42(4) 55-64 14 58 38 38 58 41 37 37(5) 39(5)

TOTAL 20 36 41 45 56 34 43 41(3) 42(3) Table A.13.6: Ratios (%) of actual to expected TPD claims, All non-annuity insurances, TPD cover, by duration. Standard female

lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+

15-24 25-34 158 197 241 532 309(138) 215(76) 35-45 19 21 77 56 76 66(19) 54(13) 45-54 33 45 42 33 68 43 52(12) 44(9) 55-64 253 63 149 52 77(24) 87(22)

TOTAL 36 21 27 95 21 82 56 66(10) 60(8)


Table A.13.7: Amount exposed-to-risk ($), All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999. Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 6838000 920000 35000 115000 7,908,000.015-24 437397577.5 263772587 138900412 68779306 30751113 39624284.5 893390.5 980,118,670.525-34 3743987091.5 2877357823 2049825314 1361759239.5 892054574 1622377088 431094027.5 12,978,455,157.035-45 5929158871.5 5259253132.5 4444755593 3430774259 2391586279.5 4819015402.5 2507610142.5 28,782,153,680.545-54 2937447032 2897045849 2627446151 2170828826 1598397248.5 3515051708 2394741644.5 18,140,958,458.555-64 201178562.5 243427810.5 284805279 249385608.5 191854891.5 432412832 387447606 1,990,512,590.065-74 1101085 429906 1,530,991.075-84 2000 2,000.085+

TOTAL 13,256,007,135.0 11,541,777,201.5 9,545,732,749.0 7,281,527,238.5 5,105,745,191.5 10,428,516,315.0 5,722,333,717.0 62,881,639,547.5 Table A.13.8: Amount exposed-to-risk ($), All non-annuity insurances, TPD cover, by duration. Standard female lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 6500000 1040000 50900 126588 771748815-24 382817530.5 232134350.5 122987768.5 58183809.5 21380959.5 15708892.5 533449.5 833746760.525-34 2117440260.5 1598791978.5 1210327692 875463681.5 592361645 975137353.5 137621231.5 7507143842.535-44 2115358724.5 1906313390 1626990327.5 1290118466 974862706 2187053842.5 881839410.5 1098253686745-54 547974132 551296554.5 534522479.5 459203742 350989973 832825874 583969818.5 3860782573.555-64 18178652 23243155.5 26510109 31722112 24003304.5 45351784.5 44214471 213223588.565-74 23592 35650 5924275-84 2000 200085+

TOTAL 5,188,269,299.5 4,312,819,429.0 3,521,338,376.5 2,714,691,811.0 1,963,622,180.0 4,056,128,647.0 1,648,342,619.023,405,212,362.0


Table A.13.9: TPD claim amounts ($), All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999. Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 15-24 118976 118,976.025-34 199406 296089 96929 241025 116978 172484 1,122,911.035-44 923167 1117230 575348 1772745 924938 660087 836870 6,810,385.045-54 229319 727288 1007018 479652 1014423 2182325 1966334 7,606,359.055-64 127500 291695 260247 56692 327755 810518 846613 2,721,020.065-74 75-84 85+

TOTAL 1,479,392.0 2,551,278.0 1,939,542.0 2,309,089.0 2,508,141.0 3,769,908.0 3,822,301.0 18,379,651.0 Table A.13.10: TPD claim amounts ($), All non-annuity insurances, TPD cover, by duration. Standard female lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTAL

0-14 15-24 25-34 427957 283123 329175 222604 123790 1,386,649.0 35-44 127538 108160 393837 310156 363111 1,302,802.0 45-54 382039 73259 143316 130864 980101 261745 1,971,324.0 55-64 138714 119484 264384 83419 606,001.0 65-74 75-84 85+

TOTAL 937,534.0 73,259.0 251,476.0 946,538.0 448,659.0 1,777,245.0 832,065.0 5,266,776.0


Table A.13.11: Ratios (%) of actual to expected TPD claim amounts, All non-annuity insurances, TPD cover, by duration. Standard male lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.


15-24 377 25-34 19 36 16 92 24 127 47(56) 34(39) 35-45 21 28 17 65 49 17 40 25(23) 34(18) 45-54 3 10 15 8 24 23 30 26(16) 20(12) 55-64 9 17 13 3 23 26 28 27(23) 20(20)

TOTAL 10 18 15 22 32 22 33 27(11) 24(9) Table A.13.12: Ratios (%) of actual to expected TPD claim amounts, All non-annuity insurances, TPD cover, by duration. Standard

female lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+

15-24 25-34 179 269 454 177 620 238(100) 206(66) 35-45 13 13 63 28 74 42(36) 33(27) 45-54 47 9 18 19 77 29 57(29) 36(25) 55-64 109 121 143 45 94(62) 86(77)

TOTAL 44 4 13 60 38 66 52 61(21) 48(17)


A.14. Female vs male experience: All non-annuity insurances combined, TPD cover

Table A.14.1: Female vs male TPD experience, All non-annuity insurances, TPD cover, by duration. Standard lives 1998-1999. Both female and male expected claims are based on Martin (1995) male rates. Estimated standard errors of ratios (%) are shown in parentheses


15-24 25-34 94 646 260(237)143(99) 35-45 146 60 88(43) 45(21) 45-54 265 80 54 58 45 47(20) 48(17) 55-64 404 117 214 91130(56) 149(51)

TOTAL 39 53 41 97 22 132 59 81(20) 72(15)


A.15. Smoker-rated experience: All non-annuity insurances combined, TPD cover

Table A.15.1: Exposed-to-risk, All non-annuity insurances, TPD cover, by duration. Standard smoker lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-14 0.015-24 378 266.5 172 78 49 46.5 990.025-34 2480 2273 1840 1324.5 852 1464 168 10,401.535-44 2753 3168 3123.5 2456 1443.5 3271 722 16,937.045-54 956.5 1397 1618 1353 642 1684.5 718 8,369.055-64 51 124 213.5 217.5 81 157.5 110 954.565-74 75-84

85+ TOTAL 6,618.5 7,228.5 6,967.0 5,429.0 3,067.5 6,623.5 1,718.0 37,652.0

FEMALES 0-14 15-24 1 0.5 1.525-34 285.5 200.5 127 67.5 37 29.5 747.035-44 1295.5 1171 906 678 520.5 1006.5 88.5 5,666.045-54 1089.5 1144.5 1092.5 894.5 648 1632 400 6,901.055-64 298 379.5 414 353.5 189.5 476 202 2,312.565-74 8 23 41.5 47.5 12 33.5 21 186.575-84 85+

TOTAL 2,977.5 2,919.0 2,581.0 2,041.0 1,407.0 3,177.5 711.5 15,814.5


Table A.15.2: Exposed-to-risk, All non-annuity insurances, TPD cover, by duration. Standard non-smoker lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-14 173.5 23.5 197.015-24 1257.5 869.5 511.5 297 141 262.5 3,339.025-34 9735 8692 6950.5 4915.5 3454.5 6100 518 40,365.535-44 14309.5 14607.5 13656.5 10294.5 7088.5 15248.5 3838 79,043.045-54 7921 9063 9133 7170 4842 10977.5 4846 53,952.555-64 590.5 899.5 1203.5 1030 659.5 1520 880.5 6,783.565-74 2 2.075-84 85+

TOTAL 33,987.0 34,155.0 31,455.0 23,707.0 16,187.5 34,108.5 10,082.5 183,682.5FEMALES

0-14 162.5 25 187.515-24 1087 762 459 237.5 95 101 2,741.525-34 7139.5 6181 5147.5 4010.5 2862.5 4880.5 399.5 30,621.035-44 7880.5 8018.5 7453.5 5892 4510.5 10666.5 2544 46,965.545-54 2614.5 3133 3309 2609.5 1792.5 4713 1924 20,095.555-64 97 159.5 234 211 132 286.5 170.5 1,290.565-74 75-84 85+

TOTAL 18,981.0 18,279.0 16,603.0 12,960.5 9,392.5 20,647.5 5,038.0 101,901.5


Table A.15.3: TPD claims, All non-annuity insurances, TPD cover, by duration. Standard smoker lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-15 15-24 25-34 1 1 1 335-44 1 5 2 2 1045-54 4 4 2 3 1 1455-64 1 2 1 1 565-74 75-84 85+

TOTAL 2 6 11 5 7 1 32FEMALES

0-14 15-24 25-34 1 135-44 2 2 445-54 1 1 1 1 455-64 65-74 75-84 85+

TOTAL 1 1 1 4 2 9


Table A.15.4: TPD claims, All non-annuity insurances, TPD cover, by duration. Standard non-smoker lives 1998-1999 Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ TOTALMALES

0-14 15-24 1 125-34 2 1 2 2 735-44 5 5 4 4 2 4 1 2545-54 2 4 9 5 2 8 7 3755-64 1 4 4 2 3 6 1 2165-74 75-84 85+

TOTAL 10 15 19 11 9 18 9 91FEMALES

0-14 15-24 25-34 1 1 1 335-44 1 1 2 1 545-54 1 3 1 4 955-64 3 1 1 565-74 75-84 85+

TOTAL 3 3 1 7 2 5 1 22


Table A.15.5: Ratios (%) of actual to expected TPD claims, All non-annuity insurances, TPD cover, by duration. Standard smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+ MALES

15-24 25-34 159 192 238 212(212) 124(88) 35-44 43 266 188 80 65(46) 107(36) 45-54 94 110 121 70 50 63(32) 88(24) 55-64 63 118 169 93 52(52) 86(39)

TOTAL 27 69 145 140 84 28 68(24) 95(17) FEMALES

15-24 25-34 787 719(719) 260(260) 35-44 247 932 391(195) 174(87) 45-54 224 146 165 132 92(92) 112(65) 55-64

TOTAL 87 67 76 218 309 242(99) 133(45)


Table A.15.6: Ratios (%) of actual to expected TPD claims, All non-annuity insurances, TPD cover, by duration. Standard non-smoker lives 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages CURTATE DURATION Attained 0 1 2 3 4 5-9 10+ 5+ 2+MALES

15-24 930 25-34 75 42 51 202 48(28) 35-44 46 44 37 49 36 33 30 32(15) 38(10) 45-54 10 17 37 26 15 27 52 35(9) 31(6) 55-64 24 62 45 26 61 54 15 40(15) 41(10)

TOTAL 26 34 39 30 37 33 38 35(7) 35(4) FEMALES

15-24 25-34 123 211 289 95(67) 35-44 26 27 68 69 15(15) 25(13) 45-54 25 61 24 54 0 38(19) 22(10) 55-64 345 184 85 0 53(53) 117(52)

TOTAL 33 29 9 83 34 34 19 30(12) 36(9)


Table A.15.7: Smoker vs non-smoker TPD experience, All non-annuity insurances, TPD cover, by sex. Standard lives 1998-1999 of durations 2 and over

Ages NON_SMOKER SMOKER Ratio of Smoker A/E to Approx SE of ratio (%)Attained ETR Actual Claims ETR Actual Claims Non-smoker A/E (%) MALES

15-24 1212 345.5 25-34 21938.5 4 5648.5 2 259 (225) 35-44 50126 15 11016 9 284 (120) 45-54 36968.5 31 6015.5 14 283 (91) 55-64 5293.5 16 779.5 5 211 (108)

TOTAL 115,538.5 66 23,805.0 30 269 (59) FEMALES

15-24 892.5 25-34 17,300.5 2 261.0 1 274 (335) 35-44 31,066.5 4 3,199.5 4 688 (487) 45-54 14,348.0 5 4,667.0 3 508 (371) 55-64 1,034.0 5 1,635.0

TOTAL 64,641.5 16 9,762.5 8 373 (161) Table A.15.8: Smoker vs non-smoker TPD experience, All non-annuity insurances, TPD cover, by sex. Standard lives 1998-1999.

Estimated standard errors of ratios (%) are shown in parentheses Curtate Ratio (%) of smoker A/E to non-smoker A/E Duration MALES FEMALES

0 263(303) 1 79(59) 2 174(82) 709(1003) 3 482(206) 91(98) 4 382(213)


A.16. Immediate annuities

Table A.16.1: Exposed-to-risk, Immediate annuities, by duration. Male annuitants 1998-1999.

Attained Age 0 1 2 3 4 5+ 2+ Total 40 - 44 1 0 0 0.5 1 3 4.5 5.545 - 49 1 0.5 2 2.5 1 7.5 13 14.550 - 54 4 2.5 3.5 3 2 20 28.5 3555 - 59 272.5 74.5 24.5 25.5 16.5 43 109.5 456.560 - 64 729.5 317.5 75.5 108.5 104 305.5 593.5 1640.565 - 69 680.5 413.5 433 637.5 635 1399.5 3105 419970 - 74 366 289 253 328.5 393.5 5807 6782 743775 - 79 183.5 176.5 228 198.5 179.5 2422 3028 338880 - 84 70 62.5 88 89.5 66.5 867.5 1111.5 124485 - 89 34 44.5 50.5 32.5 32.5 366 481.5 56090 - 94 7 9 15.5 18 10.5 95.5 139.5 155.595 - 99 2 0.5 1 2.5 0.5 17.5 21.5 24TOTAL 2351 1390.5 1174.5 1447 1442.5 11354 15418 19159.5 Table A.16.2: Exposed-to-risk, Immediate annuities, by duration. Female annuitants

1998-1999. Attained Age 0 1 2 3 4 5+ 2+ Total 25 - 29 0 0 0.5 0 0 0 0.5 0.530 - 34 0.5 0 0 1 0.5 0.5 2 2.535 - 39 0.5 0 0 0.5 1 3.5 5 5.540 - 44 4 1.5 0.5 0 0 4 4.5 1045 - 49 7.5 3.5 3 4 2.5 14 23.5 34.550 - 54 60 18.5 9.5 8.5 5.5 48.5 72 150.555 - 59 522 188 60.5 72 57 200 389.5 1099.560 - 64 673 353.5 231.5 277.5 245.5 928 1682.5 270965 - 69 526.5 393 420.5 594 595.5 3238 4848 5767.570 - 74 330.5 285 326 378 401.5 4650 5755.5 637175 - 79 222 195.5 240.5 235.5 206 2517 3199 3616.580 - 84 100 112.5 127 109.5 96.5 1186.5 1519.5 173285 - 89 42 45.5 72.5 66 49.5 542.5 730.5 81890 - 94 11.5 15 24 24.5 17 188.5 254 280.595 - 99 1 0.5 3 3.5 2 39 47.5 49TOTAL 2501 1612 1519 1775 1680 13560 18534 22647


Table A.16.3: Deaths, Immediate annuities, by duration. Male annuitants 1998-1999. Ages Attained 0 1 2 3 4 5+ 2+ Total

40 - 44 0 0 0 0 0 2 2 2 45 - 49 0 0 0 0 0 0 0 0 50 - 54 0 0 0 0 0 0 0 0 55 - 59 2 0 0 0 0 0 0 2 60 - 64 5 1 0 0 2 3 5 11 65 - 69 5 5 9 7 9 26 51 61 70 - 74 6 7 7 2 6 137 152 165 75 - 79 5 5 5 8 8 82 103 113 80 - 84 6 0 11 8 4 55 78 84 85 - 89 1 4 5 4 3 29 41 46 90 - 94 1 0 1 2 0 31 34 35 95 - 99 0 0 0 0 0 5 5 5 TOTAL 31 22 38 31 32 370 471 524

Table A.16.4: Deaths, Immediate annuities, by duration. Female annuitants 1998-1999. Ages Attained 0 1 2 3 4 5+ 2+ Total

25 - 29 0 0 0 0 0 0 0 0 30 - 34 0 0 0 0 0 0 0 0 35 - 39 0 0 0 0 0 0 0 0 40 - 44 0 0 0 0 0 0 0 0 45 - 49 0 0 0 0 0 0 0 0 50 - 54 0 0 0 0 0 0 0 0 55 - 59 2 0 1 0 0 1 2 4 60 - 64 3 1 0 0 0 7 7 11 65 - 69 0 0 2 6 3 25 36 36 70 - 74 2 2 2 5 1 55 63 67 75 - 79 3 3 5 7 3 59 74 80 80 - 84 2 3 5 4 5 44 58 63 85 - 89 6 6 9 5 2 38 54 66 90 - 94 2 1 6 1 3 30 40 43 95 - 99 0 0 0 2 0 7 9 9 TOTAL 20 16 30 30 17 266 343 379

Table A.16.5: Ratios (%) of actual to expected deaths, Immediate annuities, by

duration. Male annuitants 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages Ratio (%) by Curtate Duration Attained 0 1 1+ 2+ 5+ Total 40-49 0 0 4137(2926) 4244(3001) 7067(4997) 3733(2639) 50-59 68 0 00 00 00 39(27) 60-69 33 36 53(7) 55(7) 63(12) 49(6) 70-79 42 52 54(3) 54(3) 56(4) 54(3) 80-89 60 33 66(6) 69(6) 63(7) 66(6) 90-99 52 0 108(17) 114(18) 149(25) 105(17) TOTAL 42 41 59(3) 61(3) 62(3) 58(3)


Table A.16.6: Ratios (%) of actual to expected deaths (IM & F 80), Immediate annuities, by duration. Female annuitants 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses.

Ages Ratio (%) by Curtate Duration Attained 0 1 1+ 2+ 5+ Total 40-49 50-59 70 0 60 (42) 88 (62) 83(83) 65(32) 60-69 23 12 46 (7) 49 (8) 56(10) 43(6) 70-79 29 34 51 (4) 51 (4) 54(5) 49(4) 80-89 68 71 61 (6) 61 (6) 58(6) 62(5) 90-99 90 37 85 (12) 87 (12) 87(14) 85(12) TOTAL 43 40 56 (3) 58 (3) 59(4) 56(3)


A.17. Female vs male experience: Immediate annuities

Table A.17.1: Female vs male mortality experience, Immediate annuities. Annuitants 1998-1999 of durations 1 and over. Expected female deaths are based on IM80Base (Ultimate).

Ages FEMALE MALE Ratio(%) of Approx SE Attained ETR Actual ETR Actual Female A/E of Ratio(%)

Deaths Deaths to Male A/E 60-69 7277.0 44 4429.5 62 24 (5) 70-79 9435.0 142 10275.5 267 31 (3) 80-89 2408.0 121 1700.0 123 46 (6) 90+ 180.5 16 156.0 16 51 (18)

TOTAL 19437.0 357 16575.5 491 37 (3) Table A.17.2: Female vs male mortality experience, Immediate annuities. Annuitants

1998-1999 of durations 2 and over. Expected female deaths are based on IM80Base (Ultimate).

Ages FEMALE MALE Ratio(%) of Approx SE Attained ETR Actual ETR Actual Female A/E of Ratio(%)

Deaths Deaths to Male A/E 60-69 6530.5 43 3698.5 56 26 (5) 70-79 8954.5 137 9810.0 255 31 (3) 80-89 2250.0 112 1593.0 119 45 (6) 90+ 170.5 15 144.5 16 50 (18)

TOTAL 18036.5 341 15262.5 469 37 (3) Table A.17.3: Female vs male mortality experience, Immediate annuities, by duration.

Annuitants 1998-1999. Expected female deaths are based on IM80Base (Ultimate). Estimated standard errors of ratios (%) are shown in parentheses.

Curtate Ratio of Female A/E to Male A/E (%) Duration

1 64 (21) 2 60 (15) 3 80 (20) 4 46 (14)


A.18. Death Only Policies by Sum Insured Band

Table A.18.1: Exposed-to-risk, death only cover, by sex, sum insured and duration. Standard Lives experience 1998-99 Sum CURTATE DURATION insured 0 1 2 3 4 5-9 10+ TOTALMALES < 250K 58842 62364.5 66756 62458.5 57230.5 376591.5 1625017.5 2,309,260.5 250K-1M 29860 24996.5 20484 16744 13194.5 32278 10418.5 147,975.5 1M-2M 2279.5 1761.5 1347.5 1076.5 933 2185 418 10,001.0 2M+ 357 282.5 232.5 193.5 158 335 78 1,636.5TOTAL 91,338.5 89,405.0 88,820.0 80,472.5 71,516.0 411,389.5 1,635,932.0 2,468,873.5FEMALES < 250K 39698.5 40048 42296 41944 40646.5 249460.5 517816 971,909.5 250K-1M 14045 11008.5 8623 6890.5 5352 10815 2121 58,855.0 1M-2M 313.5 205.5 142.5 96 75 173 18.5 1,024.0 2M+ 22.5 17.5 13.5 8.5 3 5 4.5 74.5TOTAL 54,079.5 51,279.5 51,075.0 48,939.0 46,076.5 260,453.5 519,960.0 1,031,863.0 Table A.18.2: Claims, death only cover, by sex, sum insured and duration. Standard Lives experience 1998-99

Sum CURTATE DURATION Insured 0 1 2 3 4 5-9 10+ TOTALMALES < 250K 73 79 100 83 80 654 12724 13,793 250K-1M 16 16 19 20 14 44 9 138 1M-2M 2 5 3 1 2 2 2 17 2M+ 0 1 0 0 1 1 0 3TOTAL 91 101 122 104 97 701 12,735 13,951FEMALES < 250K 21 21 35 28 39 266 1984 2,394 250K-1M 5 1 5 5 4 6 1 27 1M-2M 0 0 0 0 0 0 0 0 2M+ 0 0 0 0 0 0 0 0TOTAL 26 22 40 33 43 272 1,985 2,421


Table A.18.3: Ratios (%) of actual to expected deaths, death only cover, by sex, sum insured and duration. Standard Lives

experience 1998-1999. Estimated standard errors of ratios (%) are shown in parentheses. Sum CURTATE DURATION Insured 0 1 2 3 4 5-9 10+ TOTAL 2+ 5+ MALES < 250K 81 79 91 80 84 107 90 90 91(1) 91(1) 250K-1M 42 47 64 77 65 76 36 59 66(6) 64(9) 1M-2M 59 176 124 49 113 45 153 93 83(26) 69(35) 2M+ 168 279 138 84 89(63) 100(100) TOTAL 69 74 86 78 81 104 90 90 90(1) 91(1) FEMALES < 250K 63 59 89 72 103 99 95 94 95(2) 95(2) 250K-1M 56 13 79 94 93 61 37 60 74(16) 56(21) 1M-2M 2M+ TOTAL 61 51 88 75 101 97 95 93 95(2) 95(2)


B. ESTIMATION OF STANDARD ERRORS IN ACTUAL TO EXPECTED RATIOS

Approximate standard errors for the actual to expected ratios are shown in many tables in Appendix A. The ratios and their respective standard errors are given as percentages. Where the actual to expected ratio is simply the quotient of an actual number of claims and an expected number of claims, the standard error is calculated by multiplying the ratio by the square root of the reciprocal of the number of claims. Where the actual to expected ratio is the quotient of two ratios, as in the case of the comparison of smoker and non-smoker mortality, the standard errors are calculated by multiplying the ratio by the square root of the sum of the reciprocals of the numbers of deaths in the two groups involved. For example, in Appendix A, Table A.8.8, the ratio of actual to expected smoker claims for males based on non-smoker mortality is shown as 198%. The standard error in this estimate

(20 percentage points) is obtained by multiplying 198% by 3251

1391

+

Hence, an approximate 95% confidence interval for this actual to expected ratio is given by (198 ± 40)%. Where the actual to expected ratio is the quotient of an actual cost of claims and an expected cost of claims (for ratios by sums insured), the standard error is calculated as

∑∑

iix

si

iiix

s

qX

XqK

)(

2)(

where K is an overall ratio of actual to expected, Xi is the sum insured exposed-to-risk of policy i, and )(ix

sq is the standard table claim rate specific to the attained age x of policy i (Pollard, unpublished).


C. SPECIFICATIONS TO THE MORTALITY INVESTIGATION

C.1. Introduction

C.1.1 Following discussion of the Report on the Mortality Investigation 1990-1992, wider terms of reference for subsequent IAA personal business mortality investigations were introduced. The following additional data are now required to be collected to support the wider terms of reference:

• individual inforce policy details rather than summarised number of policies • trauma and total and permanent disablement (TPD) lump sum experiences • sum insured for each life policy • occupation class for TPD covers • details of immediate annuities with guaranteed periods and with reversions • details of individual policies effected by converting other individual policies • details of individual policies effected by exercising a group policy continuation option • details of individual policies effected by exercising a guaranteed insurability option • details of group policies effected under a Master Trust arrangement • state of domicile or postcode • countries other than Australia.

These additional data requirements are incorporated into Version 2 of the Input Data Specifications for the Personal Business Mortality Investigation (see also §C.6.3). Input data is required on Version 2 of the specifications for the inforce from 31 December 1997 and for claims (deaths, traumas, TPDs and terminal illness claims) in quarters ending after that date. C.1.2 The Mortality Investigation continues to be based on a census of inforce data at 31 December in each year together with claims in a calendar year. The input data for the investigation is submitted on diskette supported by summaries of the data certified by an actuary. Input data for the inforce is submitted annually; input data for claims is submitted quarterly. The previous version of the specifications, Version 1, has now closed. C.1.3 Policies providing for payment of a sum insured on the occurrence of a trauma or on assessment of TPD are a significant feature of the Australian life insurance market. Data for these risks, as well as for death, are collected. Various companies have different definitions for the trauma and TPD covers. To distinguish this feature, the number of major traumas covered is collected, and whether TPD is assessed on an own or any occupation basis. C.1.4 Joint life annuities and immediate annuities with a guarantee period represent a significant portion of the Australian immediate annuity market. Unless all forms of immediate lifetime annuities are included in the investigation, the volume of annuity data can be expected to be too small for any meaningful analysis. For joint life annuities, data for each individual life should be included. Note that deferred annuities are not included.


Master Trust policies represent a significant portion of the corporate superannuation market and form a growing line of business. The mortality experience is likely to be different to retail business because of automatic acceptance for insurance cover. Note that stand alone group insurance business is not included. C.1.5 The underwriting basis now provides for

• individual policies effected by exercising a group policy continuation option • individual policies effected by exercising a guaranteed insurability option • group policies effected under a Master Trust arrangement, where individuals may

effect insurance cover through automatic acceptance at the date they joined the employer or through automatic acceptance after an initial qualifying period for pre-existing conditions.

Such policies may be expected to experience anti-selection. Further complications arise with the conversion of older style policies to newer series. These conversions can seek to combine a number of old policies together under a single new policy in order to simplify the administration. These conversions will diminish the measurement of the effect of selection. It is not thought feasible to capture the risk commencement dates for all of the old policies. C.2. Inclusions and Exclusions

C.2.1 The policies to be included are: • whole life and endowment insurances, both without and with term insurance riders • unbundled policies, both of the capital guaranteed and investment-linked kinds,

carrying significant risk of death, disablement or trauma temporary insurances where premiums are fully guaranteed; the sums insured may be level or reducing

• temporary insurances where the premium rate may be reviewed • group master trusts whereby investment and insurance benefits are provided to two or

more employees working for the same employer, for which individual member records are maintained, and carrying significant risk of death, disablement or trauma

• all forms of immediate lifetime annuities. Where multiple lives are individually insured under the one policy and the data of the individual lives insured are maintained, each individual life should be included. C.2.2 No longer excluded are:

• joint life and reversionary annuities • policies providing for payment of a sum insured on either TPD or trauma • policies issued in terms of a continuation option under a group policy or issued on

exercise of a convertibility or guaranteed insurability option • group policies with the master trust structure as defined above.

C.2.3 As far as practical, the following classes of policy are excluded:

• policies with no or nominal amounts of lump sum cover, this includes term certain annuities, and insurance bonds with a nominal death benefit

• policies issued on non-standard terms which do not involve a percentage extra mortality (e.g. a rated-up age where the level of extra mortality is not recorded, a contingent debt, an exclusion clause, a loading for hazardous activities)


• reinsurances received from other companies • children's deferred insurances (excluded for the full term of the policy even after the

end of the deferment period) • paid-up non-participating policies of the "traditional" type (whole life and endowment

insurances) • policies which were issued as Industrial or Collector business • all group policies with the exception of Master Trusts • joint and contingent life policies.

C.2.4 Companies who wish to do so will be able to include a non-standard class of business by arrangement with the Life Risk Insurance Committee. Any analysis of non-standard data will be on a fee-for-service basis. In addition, companies may submit up to two extra items of data for each individual policy record. Both the non-standard class of business and the extra information per policy will be defined by the company concerned and thus will be tailored to the company’s needs. It is hoped that the inclusion of company-defined data will provide a mechanism for the ongoing revision of the Mortality Investigation by the Life Risk Insurance Committee in order to meet the emerging needs of the industry. C.3. Reporting of Data

C.3.1 Ideally, a policy is to be reported as inforce on 31 December only if death, disablement or trauma cover was actually being provided at that date. However, all companies are asked to provide their inforce data as at close of business on 31 December, and to include date of notification with death claims or date of admission with TPD, trauma or terminal illness claims. In this way, adjustments for claims which are notified or admitted after 31 December may be made by the Investigation on a consistent basis for all companies. As in the old investigation, care must be taken to ensure that where some classes (e.g. policies accepted on special terms, etc.) have been excluded they are excluded both from policies inforce and from claims. Where loaded policies are included in the relevant company records at rated-up ages and it is not practicable to exclude them from the statistics supplied, then the relative claims must be recorded at the rated-up ages. Annuitant death claims should be reported at date of notification and removed from the exposure, even if payment continues due to a guarantee period. C.3.2 Inforce data should be submitted annually as soon after 31 December as possible. Claims data should be submitted quarterly for quarters ending 31 March, 30 June, 30 September, and 31 December. Claims should be included in a particular quarter based on:

• for death claims, the date of notification • for TPD, trauma and terminal illness claims, the date the claim is admitted.


A claim, which has been included in the data and is subsequently declined, should be treated as a recovery in the next quarterly return. As a general principle, any declined claims should be excluded whether they attract a return of premiums or not. One point that cannot be overstressed is that claims must be recorded in line with the categorisation of the inforce data. C.4. Classification of Data

C.4.1 Within each class of policy described in §C.2.1, separate classifications will be made according to:

(a) Sex (see §C.4.4) (b) Underwriting Basis (see §C.4.5)

Minimum Evidence Lives where only a few questions were asked on the proposal form (for example, abridged personal statement)

Non-Medical Lives were not medically examined or paramedically examined but other satisfactory evidence of health, which may or may not have included a report from an attending doctor, was provided

Medical Lives were medically examined at entry whether or not medical reports or paramedical examinations were available

Para-Medical Lives underwent a para-medical examination at entry whether or not a report from an attending doctor was produced

Group Continuation Policies were effected under a group policy continuation option

Guaranteed Insurability Policies were effected under a guaranteed insurability option

Conversion Policies were effected by a conversion of another policy Automatic Acceptance Individuals under a group Master Trust were not

required to supply evidence of health for insurance cover at entry, or after a specified period from entry, into the plan

Unknown Policies were underwritten, but the underwriting basis is unknown

None Policies were not underwritten, e.g. annuities.

(c) HIV Testing Status (that is, whether an HIV test was obtained or not) Tested Not Tested Not Recorded

(d) Smoking Status for premium rating purposes

Smoker Non-Smoker Undifferentiated


C.4.2 Instead of the former classification of assessment basis, the actual numerical loadings relative to each company’s standard for the type of risk and occupation class are to be collected for death, TPD and trauma cover separately (see §C.4.5 also). C.4.3 The Committee will reclassify each company’s occupation classes for TPD cover into standard IAA occupation classes after discussion with the company concerned. Companies should advise the Committee of the occupation class codes that they use and the meanings of these codes. C.4.4 The sex classification used in the 1985-90 investigation resulted in two sets of data:

(a) policies issued on both male and female lives up to the date of separation for new business, plus policies issued on male lives after that date

(b) policies issued on female lives after that date. This form of classification was adopted because at the time it was difficult for companies to subdivide by sex their business then inforce. For most companies it would now be possible to provide such a subdivision for all business inforce. Companies are encouraged to do so wherever possible. Each company is asked to advise the extent to which they have complied with this request. C.4.5 It is intended that a policy which is increased, whether with or without a change in underwriting basis, would remain as originally classified. However, if the risk commencement date also changes (i.e. the previous policy is effectively closed and a "new" policy established), then the new underwriting basis and individual policy loadings should be recorded. The classification of claims must correspond. C.4.6 Date of birth is now required for inforce policies as well as claims. C.4.7 Many companies offer terminal illness benefits so that a claim on such a policy may be made in one of three ways.

• Full payment of the sum insured at death • Discounted payment made as a result of terminal illness and the policy terminated • Payment at death when some of the sum assured was previously paid out or lent

because of terminal illness. Claims (and any claim reversal records) will be classified in one of the above categories. C.4.8 It is intended that the cause of death, disablement or trauma should be recorded. A summarised form of the International Classification of Diseases, 9th Revision, Clinical Modification will be used for cause of death and disablement. For trauma claims a list of conditions based on the Mercantile and General Critical Facts Survey will be used. To ensure that cases are properly coded, death certificates should, if at all possible, be referred to the Chief Medical Officer of the company. Failing that, the coding of the cause of death should be determined by a senior underwriter. It is acknowledged that some companies will not be in a position to code all causes of death adequately. It will be sufficient for these


companies to insert only the alphabetic code for those causes of death where further information is not available. Disablement claims will be categorised into broad groups using the alphabetic code only. It will not be necessary to subdivide these further by using the additional numeric code. External causes of death or disablement have been divided into broad categories which should not present any difficulties in coding. These "external" codes should take priority over the "disease" classifications. Trauma claims will be categorised by the policy condition under which the claim is admitted. C.5. Supplied Edit Software

C.5.1 Software will be supplied to each contributing company to perform basic validation of both inforce and claims data. Summaries of the data will be produced by the software. C.6. Changes to the Specifications

C.6.1 The Input Data Specifications for the Personal Business Mortality Investigation will continue to change over time in response to new perspectives on the aims of the Investigation and the discovery of any inadequacies in the current Specifications. All proposed changes to the Input Data Specifications will be discussed by the IAA Life Risk Insurance Committee. The Committee has final responsibility for any changes. C.6.2 All changes to the Input Data Specifications, once approved by the Committee, will be advised via the IAA Lump Sum Experience Investigation Bulletin, which will then form a part of the Specifications. An up-to-date version of the Input Data Specifications will be available to companies on request. C.6.3 Major changes to the Input Data Specifications requiring a new version number will occur infrequently. The change from Version 1 to Version 2 of the Input Data Specifications, which occurred after a period of five years, entailed the transition from grouped to individual member records and a considerable expansion of the range of policies included. The first Input Data Specifications for Version 2 of the IAA Mortality Investigation is known as Version 2.0 where the version number is followed by an "increment" number. Incremental changes to the Input Data Specifications will occur from time to time. These could include, for example, the addition of extra policy types or new underwriting practices, further explanations where needed or the removal of ambiguities, and so on. When an updated version of the Input Data Specifications is distributed, incorporating a set of incremental changes only, the increment number of the Specifications is updated, e.g. Version 2.0 becomes Version 2.1.

report on the lump sum experience investigation 1998 · • mortality for annuitants, durations 1...

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