CIA Annual Meeting Assemble annuelle de lICA June
CIA Annual Meeting Assemblée annuelle de l’ICA June 29 & 30, 2006 ŸLes 29 et 30 juin 2006 Ottawa, Ontario GRP-4 Group Disability Reserving
GRP – 4 Group Disability Reserving • Gary Walters – Current state of affairs • Peter Douglas – Stochastic LTD reserving • Barry Senensky – Claim-by-claim terminations • Please ask questions at end of any presentation
Group Disability Reserving Current State of Affairs • Based on a survey done fall 2005 • 14 responding companies • Covers $12 B of LTD reserves and $1. 6 B Life waiver reserves • No companies use stochastic methods for morbidity
Group Disability Reserving Current State of Affairs • Adjudication of Life Waiver done with LTD yet reserve termination and mortality assumptions match for only 2 companies • 12 Companies use CGDT/GLTD phased in after 2 to 10 years – 20 year old US table! • Only one company varies termination by diagnosis, only 1 by incidence rate, 1 by COLA and 3 by province
Group Disability Reserving Current State of Affairs • Two companies do not allow for unknown CPP/QPP decisions, 7 of rest just reduce gross reserve by a % • Termination rates based on block or industry experience usually used for refund accounted groups • Morbidity PADs usually constant % of expected terminations, 5 companies do have some variation (usually by duration only)
Group Disability Reserving Current State of Affairs • LTD reserving is just not – Sensitive to the risks for each claim or – Sensitive to changes in the mix of business – Reflective of the level of fluctuation within a block
GRP – 4 Group Disability Reserving Peter Douglas Stochastic Morbidity Models for LTD
GRP – 4 Group Disability Reserving Barry Senensky An individual reserve for Dave!
GRP – 4 Group Disability Reserving Questions?
- Slides: 9