Long-Term Care Insurance SCOR/ 삼성생명 서울사무소 대표 : Olivier Goualou 譯 : 노동현...
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Transcript of Long-Term Care Insurance SCOR/ 삼성생명 서울사무소 대표 : Olivier Goualou 譯 : 노동현...
![Page 1: Long-Term Care Insurance SCOR/ 삼성생명 서울사무소 대표 : Olivier Goualou 譯 : 노동현 ( 삼성생명 재보험파트장 )](https://reader033.fdocuments.net/reader033/viewer/2022061614/56649e575503460f94b5008e/html5/thumbnails/1.jpg)
Long-Term Care Insurance
SCOR/ 삼성생명
서울사무소 대표 : Olivier Goualou
譯 : 노동현 ( 삼성생명 재보험파트장 )
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Agenda of this presentation
- What is Long Term Care Insurance?
- What are Long Term Care Insurance specificities?
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1 - What is Long Term Care Insurance?
- Major markets
- Characteristics
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Two big Long Term Care Insurance Markets
FRANCE US
Public LTCI System
PSD / APA Medicaid / Medicare
Experience
15 years
15 / 20 years
Market annual growth
20 % 20 %
Market size
2 millions
of policy holders
6.5 millions policies
Products Cash Benefits Reimbursement
France : the most developed european LTCI Market
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US / French (European) Approaches
US Market (6.5 millions policies)
– Reimbursement Model
– Nursing home / home help plans
– Temporary payment periods
French Market (2,000,000 policies sold)
– Fixed benefits model
– Lifetime payment periods
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Japan Market
LTC : an acute issue because of change in terms of the ageing of the population
A new Public LTC scheme (April 2000)
LTCI Market
Rapid initial growth : around 2 millions policies issued during 89-98 and decline of consumer demand after (public scheme)
LTCI Market could start up again
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Market needs
Long-term care of the elderly
Invalidity before 60
Low incidence for the young
Medically diagnosed long-term care (physical or
neuro-psychiatric)
Consolidated, irreversible long-term care
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Market needs
Need for a simple, understandable, objective
definition
Product of the future: pushing back mortality,
aging and population statistics
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Definition of LTC : Activities of Daily Living (ADL)
The long-term care annuity is paid after loss of3/4 ADL
The functions which human beings must perform to lead a full, independent and meaningful life
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Fundamental activities of Daily Living (ADL)
• Washing:Ability to maintain bodily hygiene to normal standards without the assistance from another person.
• Dressing:Ability to dress and undress with suitable clothing, if necessary, without the help of another person.
• Feeding:Ability to serve and eat food previously preparedand provided without the help of another person.
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• Continence:Ability to use the toilet and control urinary and faecal eliminations including the use of protection or surgical devices.
• Movement:Ability to move around inside the home of flat surfaces, with the help of suitable equipment.
• Transfer:Ability to move from bed to chair and chair to bed without the help of another person.
Fundamental activities of Daily Living (ADL)
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Long-term care insurance products
Individual products Long-term care pension plan Double your pension
Group products
Level mutualized premium
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Product characteristics
Criteria Individual LTCI Group LTCI
Subscription Optional Mandatory
Medical Selection Yes No
Benefits Selected by insured Identical
Waiting Periods & Deductible Periods Yes, Yes No, Yes
Premium By application age Identical
Cover Whole of Life Whole of Life
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2 - What are Long Term Care Insurance specificities?
- Deductible period
- Waiting period
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Deductible period
90 days
Avoids managing short dependencies
Reduces the cost of cover
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Waiting Periods
3 years / 1 year depending on the origin of LTC
Completes medical selection
Return-insurance of premiums
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0
0.01
0.02
0.03
0.04
0.05
0.06
65 70 75 80 85 90 95
Age
Inci
den
ce (
po
ur
100
per
son
ne-
ann
ées)
Incidence of dementia: PAQUID 1988-1995
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0,00
0,02
0,04
0,06
0,08
0,10
60 65 70 75 80 85 90 95 100
Age
Inci
den
ce Non buveurs
Buveurs légers
Buveurs modérés
Incidence of dementia with respect to initial
wine consumption
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Major LTC claim reasons:
Demencia
Cancer
15 - 50 %
9 - 30 %
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Dementia & Antiselection
- “Bad risks chase out the good” (asymmetric information).
- Proportion of dementia claims among claims incidence:
Male Female40-50 0.50% 1.00%50-59 1.00% 3.00%60-64 2.50% 9.50%65-69 11.50% 19.50%70-72 17.00% 25.00%
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LTC Pricing
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Price Structure
Mixed pricing
Supplementary cost of women
Possible imbalance of the portfolio
Application of a couple
Technical discount
Commercial discount
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Risk Modeling
Longevity of non-dependants
Incidence of long-term care
Longevity of dependants
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Statistical Data
Data from experience: portfolios
Population data
Specific studies and surveys
PAQUID: monitoring a cohort for 15 years
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Price Structure
Non Guaranteed rates:
Essential for building the product
Lowers the cost of uncertainty
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The follow-up of pricing assumptions
in life-death, 1 survival law
Denied (or not) by the total number of Death if 100
Deaths expected during the year, to have only 60
death deny the Mortality Table.
In LTC , 3 laws
(Healthy Survival + Dependency entrance + Dependant
Survival)
Denied (or not) by the watched prevalence
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Multi-states Model
AutonomusAutonomus
DeathsDeaths
DependantsDependants
qxaa
i p qx xai
xai
pxai qx
aipxia 0
qxi
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Incidence law: influence of sex and age
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Life expectancy for dependants: time influence
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The two pitfalls
annual premium and age (at inception) :will this trend remain valid in 30 years?
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The two pitfalls Mathematical Reserve f(age reached) : will this trend remain valid in 30 years?
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Pricing Balance Technical Aspect
technical assumptions
– mortality of the valid
– probability of entering in dependency
– mortality of the dependants
– + other assumptions :
Administration fees,
Technical rate for the actualization of the future payments
(contractual increase rate of premiums and annuities)
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Pricing Balance Technical Aspect
Need of using prospective tables
– passed statistics enable quoting... the past
predictable increase in life expectancy ...
– a) of the valid
– b) of the dependants
what will be the evolution of entering in dependency ?
– supposed stability in time ?
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Pricing Balance Technical Aspect
Prevalence law
– proportion of dependants in the general population at each
age
more easily measured
– most part of the public data available
– enables adapting external data (public or market) to the
observations made by the company
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Reserves
Expected evolution of the reserves:
Case of a woman who underwrites her LTC Product at 50 y.o.
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Parameters sensibilityExample: influence of the incidence
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Example: influence of the financial income
Parameters sensibility
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Specific Risk for Korean Market
Surrender Value for Product over 7 years.
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LTC: a product, which needs to be handle carefully
- A new product on a new market
- Specific pitfalls for LTC
- Korean Market specificities
Needs specific conditions (waiting period, non guaranteed rates)
Needs specific follow up