More than 3,000,000 underwriting decisions are made each year by RGA’s human underwriters and RGA’s proprietary underwriting rules engine, AURA.
Despite this vast array of case studies to draw upon, a new life insurance application just came in that is particularly confounding. An insurable need can certainly be justified – if ever there was a “key person” risk this is it – but given the applicant’s extremely advanced age and less-than-stellar risk profile, the path to an accurate assessment is murky at best. Fortunately, we can tap into the insights found in RGA’s recent research publications and webcasts to provide some guidance.
Let’s start with elephant in the room: Mr. Kringle is old…really, really old.
In fact, the applicant isn’t even sure exactly how old he is, but we did find a historical reference1 that dates him to at least 1823. Regardless, the applicant has already survived well beyond even the most generous actuarial tables, so we’ll need to explore the unique factors impacting older-age mortality: cognitive function, physical function, and social engagement.
Based on available evidence Santa still seems mentally as bright as Rudolph’s nose. He is able to maintain a meticulous inventory of the naughty and nice (and even check it twice) and has the cognitive capacity to oversee the operational logistics of a ginormous global toy manufacturing and delivery enterprise. Alarmingly, he was once confined to Bellevue hospital for mental illness; however, a subsequent court hearing involving evidence presented by the U.S. Post Office found him to be of sound mind2. Physically, despite his weight, he seems quite spry. He squeezes down chimneys and lugs heavy bundles of toys without any evidence of falls or gait disturbances. Finally, his marital status, time with elvish coworkers, volunteerism, pet reindeer ownership and overall jolliness are all favorable indicators of social engagement. All in all, Santa seems to be working and playing with the vigor of someone several centuries his junior.
1.“A Visit from St. Nicholas.” Retrieved from Wikipedia 2.“Miracle on 34th Street.” Retrieved from IMDB.
Santa’s fondness for sweets is well documented.
At an average of 2.73 cookies per household (adjusting for crumbs left on the plate), Santa consumes approximately 50 billion calories each December 24 in the U.S. alone.
Not surprisingly, Clement Moore describes St. Nicholas as “chubby and plump,” and every image of Santa seems to confirm his suboptimal waist-to-hip ratio. Although this extra layer of subcutaneous insulation is undoubtedly useful during frigid North Pole nights, his heavy weight will weigh heavily on our analysis of the big guy’s insurability.
A myriad of risks are associated with obesity, including heart disease and diabetes, so Santa should consider increased physical activity, caloric restriction or even surgical interventions. Without a meaningful commitment to lifestyle changes, however, the right jolly old elf may be eternally destined to shake like a bowlful of jelly.
We queried a variety of electronic databases with proven protective value. Unfortunately, we didn’t learn much.
Because individuals with severe motor vehicle violations have nearly 70% higher-than-average all-cause mortality, we were initially encouraged when Santa’s motor vehicle report came back clean. Upon closer reflection, though, what sort of police officer would issue a citation to Santa Claus? The prescription history query service was also unable to locate any information about Mr. Kringle in its network of pharmacy data sources.
The “no hit” cohort generally has 15% higher-than-average mortality, but we suspect that Santa might just fill his prescriptions outside the U.S. The MIB query found no prior insurance application activity. This lack of information actually gives us a modicum of comfort since individuals with extended application activity are more than twice as likely to lapse their policies in the first two durations. Consumer credit attributes are also strongly correlated with mortality and persistency risk – and Santa does have a somewhat sketchy source of income – but as with the other databases, the credit check came back empty. In summary, none of the data providers were able to find any record of Kris Kringle. If I didn’t know better, I might question whether he really exists.
Behavioral and Occupational Risks
Although we weren’t able to ascertain a lot about the applicant’s risk history from the databases, we can infer something from his behaviors
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