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  #1  
Old 10-26-2017, 11:22 AM
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Default Accident and Health

Hi,

Noob question. I noticed several property casualty companies also have A&H business.
I'm just not sure but how is A&H different from regular, broad health insurance?

Is A&H just insurance provided for accident and health claims coming from P&C related accidents?


All this leads me to thinking how reserves and premiums are calculated differently from how regular "health" insurance companies calculate their reserves and premiums...
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Old 10-26-2017, 02:43 PM
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Accident and Health is an NAIC way of referring to it. Usually it refers to Group AD&D policies ("Accidental Death and Dismemberment"), that gruesome little employee benefit most of us have that pays $X1 if you die accidentally, $X2 if you lose a foot, $X3 if you lose both feet, $X4 if you lose an eye, etc.). More accident than health. It's closer to a group life policy than a medical policy in that the amount it pays is fixed for a given injury type, rather than variable the way a policy that covers "medical expenses" is.

The biggest exposure the P&C world has to medical expenses is through Workers Comp, but that's a separate animal. There's also the limited medical benefits coverage in your auto policy that pays medical bills of your injured passengers up to a very small limit, but that fall under the PPAL line, and is dwarfed by the larger coverages like Bodily Injury Liability.

When I worked in Health, we briefly explored the idea of a "24-hour medical" product, that was a trendy idea for awhile to combine all the medical expense coverages (WC medical, Auto Medical Expense and Traditional Health Insurance) into a single product, with the idea that it could streamline care management, as well as make it easier for sick or injured people to get compensation. The biggest stumbling block we saw was how to combine data from the P&C WC world with the Health Insurance world. Dating of claims, for example. WC medical claims are dated as of the date of accident or exposure. Health claims are dated at the date of service or admission. How do you roll those together?

Last edited by Maine-iac; 10-26-2017 at 02:50 PM..
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Old 10-26-2017, 02:47 PM
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Quote:
Originally Posted by Maine-iac View Post
More accident than health.


It's mostly accident-related stuff. Like if you run a summer camp and want insurance in case some kid hits his head and gets brain damage.

It's also really just a P&C catchall, as it'd also include stuff like you pay for a plane ticket with a credit card that offers insurance coverage and the airline lost your bag, you might be covered to go buy some clothes, etc. Or if you have a family member die and need to cancel your trip that might be covered by a trip can benefit through your credit card.
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Old 10-26-2017, 03:58 PM
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Quote:
Originally Posted by Maine-iac View Post
When I worked in Health, we briefly explored the idea of a "24-hour medical" product, that was a trendy idea for awhile to combine all the medical expense coverages (WC medical, Auto Medical Expense and Traditional Health Insurance) into a single product, with the idea that it could streamline care management, as well as make it easier for sick or injured people to get compensation. The biggest stumbling block we saw was how to combine data from the P&C WC world with the Health Insurance world. Dating of claims, for example. WC medical claims are dated as of the date of accident or exposure. Health claims are dated at the date of service or admission. How do you roll those together?
At 2 different times in my career we worked on this, though without the auto piece. I still like the idea, but we couldn't figure out how to make it work.
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Old 10-26-2017, 04:18 PM
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I believe some P&C carriers provide medical stop loss, which would be closer to a traditional health product without it being regulated as such.
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Old 10-26-2017, 04:23 PM
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I thought that the A&H line on the statement would also capture the (large) insurers that provide the AD&D benefits to their own employees and essentially "self-insures" the coverage.
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Old 10-26-2017, 04:24 PM
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At 2 different times in my career we worked on this, though without the auto piece. I still like the idea, but we couldn't figure out how to make it work.
It's a very intuitively pleasing concept, but a nightmare when you get to the details.
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Old 10-26-2017, 04:42 PM
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Thank you for the replies.
I am currently trying to model premium risks for the A&H business but like in other P&C companies, the A&H business is young and there simply isn't enough data. Also, there is not enough papers on modeling this kind of risk. I couldn't even find one paper that specifically talked about modeling risk for A&H insurance (perhaps the short time horizon in several LoBs in A&H).
I found that a bit frustrating. As an analyst working for a small to medium sized business, i am very curious about how larger P&C companies with A&H business tackle this.
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Old 10-26-2017, 04:46 PM
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Quote:
Originally Posted by ronaldy27 View Post
Thank you for the replies.
I am currently trying to model premium risks for the A&H business but like in other P&C companies, the A&H business is young and there simply isn't enough data. Also, there is not enough papers on modeling this kind of risk. I couldn't even find one paper that specifically talked about modeling risk for A&H insurance (perhaps the short time horizon in several LoBs in A&H).
I found that a bit frustrating. As an analyst working for a small to medium sized business, i am very curious about how larger P&C companies with A&H business tackle this.
It was all experience rated for me. I wished I could get my hands on decent data but the business was all either super large and handled on an account-specific (experience rated) basis where we'd get the company specific data leading up to some big renewal or super high frequency super low severity and we had the business spread throughout a bunch of TPAs and simply didn't have access to data as granular as by claim.
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