Working Paper 33 - A new methodology for analysing CMI critical illness experience

Working Paper 33 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 1999-2004. 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 1999-2002 are contained in this paper; results for 2003 and 2004 are being sent to member offices. The interpretation of these results is discussed in the paper which also illustrates the sensitivity of the results to some of the key assumptions.

The Committee now intends to use the revised methodology to produce results for other subsets of critical illness business and to generate realistic claim rates.

The paper highlights a number of specific areas for feedback but comments on all aspects would be welcomed by the Committee. Feedback is invited by 30th September 2008. Please see section 11 of the paper for details.

Please click here to access Working Paper 33.

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