health insurance: actuarial aspects

152 Pages·2012·0.56 MB·English

HEALTH INSURANCE:
ACTUARIAL ASPECTS
Ermanno Pitacco
University of Trieste (Italy)
[email protected]
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Agenda
1. The need for health-related insurance covers
2. Products in the area of health insurance
3. Between Life and Non-Life insurance: the actuarial structure of
sickness insurance
4. Indexation mechanisms
5. Individual experience rating: some models
6. The (aggregate) longevity risk in lifelong covers
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1 THE NEED FOR HEALTH-RELATED
INSURANCE COVERS
1. Individual flows
2. Aims of health insurance products
3. Risks inherent in the random lifetime
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1.1 INDIVIDUAL FLOWS
The following flows are considered
inflows:
•
⊲ earned income (wage / salary)
⊲ pension (+ possible life annuities)
outflows: health-related costs
•
⊲ medical expenses (medicines, hospitalization, surgery, etc.)
⊲ expenses related to long-term care
⊲ loss of income because of disability (caused by sickness or
accident)
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Individual flows (cont’d)

t
n
u
o
m
a
EXPECTED COSTS
0 n time
x x+n age
Health-related expected costs
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Individual flows (cont’d)

t
n
u
o LIKELY VARIABILITY RANGE
m
a
EXPECTED COSTS
time
0 n
x x+n age
Health-related expected costs and their variability
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Individual flows (cont’d)

t
n
u
o NATURAL PREMIUMS not applicable
m
a
EXPECTED COSTS
0 n time
x x+n age
Health-related expected costs and natural premiums (including safety loading)
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Individual flows (cont’d)

t
n
u
o
m
a
time
0 n
age
x x+n
start of working
retirement
period
Income profile
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Individual flows (cont’d)

t
n
u
o
m
a
WHOLE - LIFE NATURAL PREMIUMS
LEVEL PREMIUMS
0 n time
x x + n age
Health-related expected costs and whole-life level premiums
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Individual flows (cont’d)

t
n
u
o
m
a
TEMPORARY NATURAL PREMIUMS
LEVEL PREMIUMS
0 n time
x x + n age
Health-related expected costs and temporary level premiums
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