In its “Report on the Mortality Investigation 1995–1997”, the Institute of Actuaries of Australia has analysed the market experience with the critical illness cover (trauma cover). Around 626 critical illness claims may have been made and accepted. The total exposure, that is lives exposed to risk, may have been around 367,000. Let’s have a brief look.
From the years 1995-1997, figures for both men and women were revealed. No critical illness claims may have been made by men aged 17-24 upon an exposure of 4,247. Moreover, around 29 claims may have been made by men aged 25-34 over an exposure of 58,739 followed by 108 from those aged 35-44 upon an exposure of 93,729. Then about 137 critical illness claims may have also been made by men aged 45-54 over an exposure of 45,150. Finally nearly 33 claims may have been made from males aged 55-64 upon an exposure of 3,646. As for women, 1 critical illness claim may have been made by those aged 17-24 upon an exposure of 4,783 followed by about 37 claims deriving from women aged 25-34 over an amount of 59,541 lives at risk. Furthermore, 92 claims may have been made by females aged 35-44 over 73,045 lives. Then, approximately 83 critical illness claims may have been made by those aged 45-54 upon an exposure of 23,227. Finally, around 5 claims may have also been made by women aged 55-64 over a total amount of 1,226 lives exposed. Causes of claims Similar to other insurance markets, a critical illness like cancer may also dominate the Australian market. Around 61 percent of the total critical illness claims made may have been for cancer. From this, about 46 percent of man may have claimed while nearly 84 percent of women may have also done the same. Critical illness conditions like heart attack and bypass surgery may have brought more significant results with men. Around 17 percent of men may have claimed for heart attack whilst 10 percent may have claimed for bypass surgery. Apart from heart attack, cancer, bypass surgery and stroke other critical illness claims may have also been made. 16 percent of these claims may have been made in which 20 percent of men may have claimed and 10 percent of women. Selection It has been found that the critical illness claims ratio may be better for men in the first policy year than preceding years. But the risk covered in the critical illness policy in the first policy year may be smaller due to the existence of a waiting period of around three months. Considering the second policy year, no effect of selection may be seen. As for women, the critical illness claims ratio in the first and second policy years may be higher than the subsequent years. However, analysis may demonstrate that for breast cancer (women) and heart attacks (men) critical illness claims may be made much earlier. These claims may be put under final review after the waiting period is over, i.e. after four to five months. If compared to more mature markets, firstly we may see that the critical illness claims in Australia may not be as big. Secondly, the selection phase may not be as complex as that we may see in the UK for example. Critical illness insurance as a matter of fact, may still be in the blossoming stage in Australia. A couple of years more, we may see a different facet of critical illness cover in Australia.
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