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In Korea, where CI premium rates are usually guaranteed to age 80, the first multiple CI product has recently been introduced with a more prudent approach. It is only offered as accelerated CI. The conditions are split in three groups only and the benefits for subsequent claims are reduced.
Partial or scaled benefits (also known as tiered benefits) are closely related to multiple benefits: the remaining portion of the sum insured stays available for a different claim or a worsening condition. The South African 4x4 grid is worth mentioning as four different severity stages of the four main conditions make up to 16 different payouts possible.
With scaled CI products it is possible to extend the coverage by providing partial benefits to more common conditions, while keeping a high sum insured for the critical conditions. This allows products to remain affordable, especially where long-cover durations with guaranteed rates are common and a high trend risk exists for early detection e.g. by introduction of screening programs. Canada, as an example, has developed “Early detection” or “Early prevention” benefits focusing mostly on angioplasty and “non-life-threatening cancers” such as ductal carcinoma in situ or early stage prostate cancer.
have been on the market for a very long time and still represent a significant part of the overall CI premium income in the USA and Japan. Experience in other countries also confirms these covers are not rivals to CI products but more like a cousin. The range of coverage of Cancer policies varies from an “all cancer” product, “severe life-threatening cancers” to “single site cancers”, such as breast cancer covers.
Underwriting CI products
Along with clear CI definitions, effective underwriting is one of the essential skills to successfully write CI. Although having a long waiting period (also called a moratorium) was thought to be an alternative to reduce the underwriting process, experience has shown that good underwriting trumps other methods to maximize CI profitability. Furthermore, simplified underwriting is too risky for high sums insured where anti- selection can be more prevalent.
Tele-underwriting is well placed to address the extra needs of CI risk selection. It has already shown very promising results not only in regard to the quality of the medical information collected but also in positive consumer feedback.
One of the key drivers behind successful sales of CI in any particular market lies in the distribution channel. Fully advised distributions allow for a more complex solution to be sold whilst a guided-type sale common to bancassurers or single-tie distributions will lead to simpler product and process solutions. The underwriting process for such products can be shortened as they do not take into account a wide range of illnesses. On the other hand, such products can be more exposed to anti-selection because of the targeted condition(s).
Some insurance policies focus on single illnesses. Cancer products are the best example as together with heart attack and stroke they have the highest public recognition. They
Critical illness products vary in design, scope and marketing approach from one country to another. o be successful, a CI writer has to tailor any new idea or approach to the environment of the targeted market. SCOR Global Life is a risk-carrier with the experience and knowledge to become a valued business partner. We can provide a team of market specialists, product experts and medical underwriters to meet clients’ CI needs. With worldwide expertise, SCOR Global Life is well positioned to assist in the development and successful launch of new Critical Illness products.
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