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Income protection investigation

The CMI investigates the sickness experience of income protection policyholders

Brief history

A sub-committee of the CMI was set up in 1970 to investigate sickness rates under policies providing permanent health insurance, now better known as income protection. The main dataset extends back to 1975 although occupation class is only included from 1991. There are separate pools for individual business (still open) and group business (closed 2006).

Data and methodology

Data is submitted annually by life offices in a prescribed format, described in the Coding Guide, with records for each individual policy at the start and end of the year, and for each claim in payment during the year.

Initially the investigations used a Manchester Unity approach, but now the experience is analysed in terms of claim inceptions and terminations (by recovery or death). The current methodology is described in CMI Working Paper 59.


Contributing life offices receive results in respect of the business for which they have submitted data. Aggregate 'All Office' results are also produced annually.

CMI Working Paper 60 presents the most recent published analysis covering the period 2003 to 2006. Annual results up to 2010 have also been produced but issued only to CMI subscribers.

The actual claims experience is compared with that expected using the graduations IPM 1991-98 which reflect the experience of male lives in CMI occupation class 1 policies for 1991-98. An overview of these graduations is presented in CMI Working Paper 48.

Sickness experience tables

The CMI has published two main sets of graduated rates for individual IP claim inceptions and terminations. The first graduations, SM1975-78, were presented in CMI Report 12 and reflect the standard male lives experience on individual IP policies for 1975-78. The second, IPM 1991-98, is noted above.

The CMI Income Protection Rate Table Tool is a spreadsheet-based application, designed to assist practitioners in deriving claim inception and termination rates, as well as other factors required for their in-house profit testing, valuation and experience analysis tools, such as claim annuity values. It is intended to help practitioners make full use of the published graduations and experience.

Further analysis

An analysis of Individual Income Protection experience, 1991-2009, by cause of sickness is contained in CMI Working Paper 72.  An accompanying spreadsheet containing two databases, covering inceptions and terminations experience, was also made available to enable practitioners to pursue further investigations.

Related documents

Contact Details

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