Prospecting Health Similar to Life Techniques: Concepts, Commonalities and Case Studies
Insuring Health related risk without the right of termination by the insurer for a long time-period, up to life-long is mandatory in some European countries. In jurisdictions where this type of Health insurance is practised ever since, specific actuarial methods – in Solvency II referred to as Health similar to life techniques (Health SLT) – evolved.
Given, that this type of insurance cover offers a superior level of protection, it is gaining popularity either in addition to or as an alternative financing method for public healthcare.
In the first part of this training the actuarial concepts that constitute the core of what is practised as Health SLT are introduced. We will outline some of the differences between jurisdictions like Germany and Austria to indicate how the concepts introduced so far are adapted to different legislations.
By exemplifying the impact of (potentially different) premium adjustment clauses, we give indications to the treatment of Health SLT in Solvency II and IFRS 17.
In the second part of the training more recent enhancements are delineated, such as embedding frequency/severity modelling and Markovian states (Thiele’s formula) to the Health SLT actuarial framework. A Case Study with hands-on examples (in Excel) will be presented illustrating actuarial methods to support a tariff, by which an insured person may choose deductibles from a range of values as well as the application of Thiele’s equation in combination with frequency/severity modelling of claims.