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The Actuary The magazine of the Institute & Faculty of Actuaries

CMI publishes critical illness paper

The CMI has published Working Paper 33, A new methodology for analysing CMI critical illness experience.

The paper further develops the methodology previously used by the CMI Critical Illness Committee to analyse critical illness experience. It also describes the derivation of best estimate assumptions of the claim development distribution and off rates.

The methodology and assumptions are used to produce results for accelerated critical illness experience on a lives basis for the years 1999 to 2004. These are the first results the Committee has calculated that properly match claims to exposure, but they do so in terms of settled claims, not diagnosed claims, and so need careful interpretation.

Results for 1999 to 2002 are contained and the interpretation of these results is discussed. The paper also illustrates the sensitivity of the results to some of the key assumptions. To view a copy of the paper, please visit www.actuaries.org.uk/knowledge/cmi/cmi_Working_Papers/cmi_Working_Paper_33.

Please send any feedback, preferably by 30 September 2008, or enquiries about the paper to ci@cmib.org.uk