Chapter 21 - Mortality and Morbidity Flashcards
What is adverse selection/anti-selection?
Taking advantage of inefficiencies in a provider’s pricing basis to secure better terms than might otherwise be justified.
What is the main purpose of underwriting what considerations should be made with regards to the level of underwriting.
Use of underwriting to classify risks in homogenous groups using rating factors
- aka risk grouping
Considerations:
Cost of collecting information
Ability of prospective policyholders to provide accurate response
Process must not be too strenuous for marketability sake
Rating factors, or lack thereof, should not allow excessive anti-selection
What competitors are using as rating factors
What is a select period?
Time horizon beyond which we assume no significant difference in mortality (or other rating factors?) between two similar types of lives.
Why are individual mortality tables constructed for homogenous groups, instead of one for a heterogenous group?
Heterogenous group experience would depend heavily on the mixture of the group, and so is only representative of a group with a similar mixture of risks. This would have very limited usage.
What are the main proxies used to predict variation in mortality and morbidity experience? (5)
Age Sex Geographical areas Social class Trends over time (smoker status?)
What are the main causal factors contributing to variation in morbidity and mortality? (13)
Age Sex Occupation Nutrition Housing Climate/geography Education Genetics HIV status Dangerous activities Travel Religious attitudes Martal status
How does occupation have an effect on mortality and morbidity (5)? What are possible considerations which need to be taken when looking at census data for occupations (4)?
Occupation may involve exposure to harmful substances, dangerous working conditions or unhygienic working conditions.
Some occupations are naturally healthier than others.
Some occupations attract naturally healthier individuals, or may involve regular health checks and standards.
Income from an occupation determines access to healthy diet, quality housing and healthcare.
Census may not be specific enough and so incorrect occupation is recorded
Families of deceased workers may incorrectly identify occupation
Workers could have moved occupations, and so the previous occupation may have impacted morbidity and mortality rather than the current occupation.
Some occupations may not have sufficient participation for data to provide meaningful statistics (although data that is recorded may be more detailed)
How does nutrition have an effect on mortality and morbidity (5)? What factors can influence nutrition of a population (3)?
Poor nutrition can increase risk of contracting diseases and hinder recovery from sickness.
Poor nutrition can increase probability of premature death.
Excessive/unhealthy eating can lead to obesity which increases risk of associated diseases, such as heart disease and hypertension.
Sub-nutrition (insufficient food) can reduce resistance to disease.
Malnutrition (lack of vitamins and minerals) can induce medical conditions which increase mortality. ---------------------------- Economic factors such as: - income - Lack of health and personal education - Social and cultural factors
How does housing have an effect on mortality and morbidity (3)?
Physical quality of housing
- state of repair
- type of housing
- heating
- sanitation
Overcrowding
Shared cooking
All of these generally impact morbidity due to the effect of infectious diseases.
These effects are heavily correlated with the general effects of poverty.
How do climate and geographical location effect morbidity and mortality (5)?
Rainfall and temperature patterns are amicable to certain kinds of diseases (especially tropical regions)
Natural disasters will affect mortality and morbidity, as well as the correlation thereof.
Urban and rural areas will have various characteristics which influence morbidity and mortality.
Access to medical care and transport can affect delay in receiving effective treatment, preventative screening and immunisation programmes.
May be a higher risk to be involved in/killed in a motor accident.
How will political unrest have an effect on morbidity and mortality (3)?
Individuals likely to be involved in direct combat.
Increased risk of fatal injury to civilians.
Food, clean water and medical facilities may be restricted in a war zone.
How does education have an effect on morbidity and mortality (2)?
Influences the awareness of components of a healthy lifestyle.
Better education is highly correlated with various other risk factors which decrease morbidity and mortality.
What is selection?
Subdivision of heterogeneous data into homogeneous classes.
What are the main kinds of selection, and gives a brief explanation of each (5)?
Temporary initial selection
- Group is defined by a specified event happening at a specific age.
- Mortality/morbidity differences are observed for first s (select period) years after the select event
Class selection
- Division into different classes, e.g. male and female
- Stochastic models/life tables are different for each class
Time selection
- Differences in mortality and morbidity of groups defined based on calendar periods
Adverse selection
- Characterised by the way in which select groups are formed, and the self-selection of policyholders which disrupts a controlled selection process and reduces its effectiveness.
- Type of product and underwriting process (especially when compared to competitors) will have large effect
Spurious selection
- When factors used to define homogenous groups are not the true cause of differences in morbidity and mortality to other groups.
- Leads to groups which are not truly homogeneous
- Spurious selection may still be good proxy rating factor.
What is mortality convergence?
Mortality risk factors tend to have a lower effect on mortality as age increases, and so the mortality rates at higher ages are similar for all individuals
