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The Actuary The magazine of the Institute & Faculty of Actuaries

CMI critical illness working paper adds insight on diagnosis rates

The Continuous Mortality Investigation (CMI) has published Working Paper 43: ‘CMI critical illness diagnosis rates for accelerated business, 1999-2004’. This paper is available at www.actuaries.org.uk/cmi_wp43

CMI Working Paper 43 presents claim diagnosis rates for accelerated critical illness insurance, on a ‘lives’ basis, using data for claims settled in 1999 to 2004. Four sets of rates are included in the paper: for males and females, and for non-smokers and smokers.

The derivation of these diagnosis rates builds on the CMI’s previous work. This had progressed to ‘adjusted’ results, which properly match claims to exposure, but do so in terms of settled claims as opposed to diagnosed claims.

The results in this paper are the first the CMI Critical Illness Committee has produced that relate to the date of diagnosis, when a critical illness claim is incurred. The rates are not the only sets that could be derived from the data. Consequently, the Committee is making spreadsheets containing summarised data available to member offices, allowing practitioners to experiment with alternative approaches.

Furthermore, the Committee does not propose the adoption of these rates as a formal table. Instead, it intends to use the same methodology to produce diagnosis rates for 2003-2006 with the hope that this will lead to a formal table.