Risk Classification in Life Insurance (Huebner International Series on Risk, Insurance and Economic Security, 1)

The research project leading to this book was initiated in the fall of 1979 when the American Council of Life Insurance (ACLI) contacted Dan McGill, chairman of the Wharton School Insurance Department, about conducting a study on risk classification in life insurance. The ACLI was concerned about legislative and judicial activity in this area and its potential effects on the life insurance industry. A meeting was held at the ACLI offices in Washington, D.C., between several members of the ACLI staff and Dan McGill and David Cummins representing the Wharton School insurance department. An agreement was reached that a study would be conducted at Wharton dealing with issues in risk classification. Although the staff of the ACLI suggested directions the study might take, it was agreed that the design and execution of the study would be solely under the control of the researchers. The researchers also retained unrestricted publication rights in the results of the study. This agreement has been honored by the ACLI during the course of the project. Front Matter....Pages i-xix Introduction....Pages 1-8 Front Matter....Pages 9-9 The Theory of Insurance Pricing: Loss Distributions and Expected Value....Pages 11-25 The Economic Role of Risk Classification....Pages 27-62 Heterogeneity in Risk Classification....Pages 63-81 Fairness in Risk Classification....Pages 83-92 Conclusions to Part I....Pages 93-98 Front Matter....Pages 99-99 Introduction: Overview of Risk Classification....Pages 101-120 The Nonmedical Application....Pages 121-130 Underwriting Medical Impairments....Pages 131-176 Nonphysical Underwriting Factors....Pages 177-213 Conclusions to Part II....Pages 215-220 Front Matter....Pages 221-221 Introduction....Pages 223-226 A Multiple logistic Methodology for the Estimation of Risk Classification Models....Pages 227-240 The Effect of Physical and Mental Impairments on the Annual Probability of a Policy Terminating by Death....Pages 241-275 Comparison of Logistic Model Results with Other Data....Pages 277-320 Summary and Conclusions for Part III....Pages 321-325 Back Matter....Pages 327-336