While critical illness products tend towards complex, tiered or multi-pay structures, the biology behind life-threatening illnesses remains unchanged. This explains why the majority of claims paid under CI policies are still for cancer.
It is natural, therefore, that increased cancer screening programmes and improved cardiac diagnostics – which may serve to increase the total number of identified cases of disease in the population – should put CI providers on their guard.
Changes in population-based screening for breast and bowel cancer, and the availability of prostate cancer testing on request, have increased population cancer incidence rates.
Equally, changes to clinical practice in cardiology now allow doctors to detect tiny amounts of heart damage with great accuracy. This can create a mismatch in opinion between the cardiologist diagnosing a myocardial infarction using current criteria and what an insurer may regard as a valid CI claim.
Both of these changes accelerate diagnosis, thereby improving outcomes for patients. They are also likely to translate into increased numbers of CI claims, which are dependent on both incidence trends of the underlying disease and also developments in screening and diagnostic methods. And it is the latter that is most concerning for the future of CI providers.
Population-based breast cancer screening has been extended to include women under the age of 50 and up to age 70.
In 2011 the Continuous Mortality Investigation published CI insured lives standard table series AC04. These tables are centred in the year 2004 and are based on little data above age 65. Therefore, they do not reflect the increase in breast cancer incidence in the population resulting from the extension of the screening programme.
The same applies for recent changes to the rate of detection of prostate cancer. While the rate of increase appears to have slowed down, prostate cancer rates may still be 10 per cent to 30 per cent higher than the experience that contributed to the AC04 tables.
Despite the UK National Screening Committee ruling out population screening for prostate cancer, detection rates have still increased. This is due to opportunistic screening using prostate-specific antigen testing. However, at any point in time incidence levels represent only a fraction of the likely underlying prevalence of disease in the population.
While the new Association of British Insurers’ definitions introduced a measure of severity in the cancer definition for prostate cancer through the introduction of a Gleason score – which would, in theory, reduce the number of eligible prostate cancer claims – there are a couple of factors working in the opposite direction.
Firstly, it has become increasingly common for insurers to reintroduce cover for low-grade prostate cancer, albeit at reduced payout – typically 25 per cent of the sum assured.
Secondly, there is also evidence of ‘diagnostic creep’ or stage migration taking place in prostate cancer. Histopathologists now report more advanced Gleason scores in prostate cancers than they did previously. An increase of one point in the Gleason score was frequently recorded when older specimens were reviewed by today’s pathologists. This will affect the numbers of claims satisfying the trigger point of the ABI cancer definition.
If population-based prostate cancer screening is introduced, premiums for this low-grade cover could increase by around 3 per cent.
For the business that was written on the pre-2002 ABI cancer definition, claim rates could increase by 10 per cent relative to current rates. If a more sensitive test than PSA is found and becomes widely accessed, the new business premiums could increase by around 5 per cent and pre-2002 claim rates could increase by 25 per cent.
Screening for bowel cancer was introduced in the UK in 2006. Following a positive screening test, cancer is found in up to one in 20 follow-up colonoscopies – representing an overall increase in incidence rates of nearly 20 per cent. Formal screening for other cancers – including ovarian and lung cancer – is being considered. In Scotland a pilot study has started screening high-risk adults for lung cancer using a new blood test. In other countries informal screening has led to large increases in cancer incidence in the insured population.
Myocardial infarction (heart attack) is a major cause of CI claims. Patients with a suspected MI undergo routine blood tests to detect levels of troponin – a biochemical marker of cardiac damage. As such, troponin was included in the 2006 ABI definition.
The level of troponins used in the definition was chosen to roughly equate to the severity of heart attacks diagnosed with older enzyme tests.
Importantly, the tests that are used by doctors to detect troponin have fast become very sensitive and can now reveal very small amounts of heart damage. The guidelines for troponin in clinical medicine are set significantly lower than that stated in the ABI wording and can detect levels that are one hundredth of the ABI level. The measurement used to confirm a diagnosis of MI for clinical purposes is therefore not optimal in the context of CI claims assessment.
From the policyholder’s point of view, it is quite reasonable to expect a CI policy to pay out if a cardiologist confirms they suffered damage to their heart – however small. Their expectation will be further piqued if the treatment they receive is the same as if they had had a heart attack. As a result, it is not unusual for insurers to pay claims when troponin levels are well below those stated in a policy definition. In such cases, claims assessors believe that the claim is actually valid by taking account of all the evidence available.
It is difficult to gauge how many additional valid MI claims might need to be paid in the future given the differences between clinical and insurance definitions, but reports of 30 per cent to 50 per cent increases in heart attacks have been estimated. The implication of changing heart attack diagnostics is that premiums will need to increase, which will, in turn, make CI products less affordable.
The anticipated changes in incidence resulting from developments in screening and diagnostic methods should be taken into account when considering current CI pricing and policy wordings. In particular, it should be considered whether to reflect the future uncertainties underlying these factors in the level of the guarantee charges included in the pricing.
In the future there may be further age extensions to existing screening programmes and new programmes may be introduced as more trials are run and additional data is collected to support their approval by health policy makers. This makes long-term pricing of CI highly uncertain due to the potential for significant increases in claim rates.
Many CI products have definitions based on the fact rather than the severity of the diagnosis. While definitions without complicated qualifications look simpler and more attractive to consumers, providing cover on this basis is more uncertain from a pricing perspective. This is because modern medical techniques detect early-stage disease while treatment options preserve healthy life. From the insurer’s point of view, the question must arise whether the aim of future-proofing CI definitions is at all achievable in the face of continuously improving medical technology.
Ross Campbell is research and development chief underwriter for Gen Re
Key points
■ Increased cancer screening programmes and improved cardiac diagnostics should put critical illness providers on their guard.
■ It has become increasingly common for insurers to reintroduce cover for low-grade prostate cancer.
■ There may be further age extensions to existing screening programmes and new programmes covering other cancer sites may be introduced as more trials are run and additional data is collected.
