IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0307508.html
   My bibliography  Save this article

Application of type II diabetes incidence and mortality rates for insurance

Author

Listed:
  • Jack C Yue
  • Hsin-Chung Wang
  • Ting-Chung Chang

Abstract

Prolonging life is a global trend, and more medical expenditure is being spent on chronic diseases owing to population aging. Diseases commonly seen in middle-aged and elderly people, such as heart disease and diabetes, have slowed mortality improvement in recent years. Diabetes is a common chronic disease and comorbidity of many serious health conditions. The total estimated cost of diabetes in the United States was $327 billion in 2017. However, many people are unaware that diabetes is common, and at least 21.4% of adults do not know that they have diabetes. The number of diabetes-related deaths has been increasing, and diabetes was the 5th cause of death in Taiwan in 2019. In this study, we explore the trend and influence of diabetes in Taiwan and apply mortality models, such as the Lee-Carter and Age-Period-Cohort models, using data from Taiwan’s National Insurance to model the incidence and mortality rates of diabetes. We found that the Lee-Carter model provides fairly satisfactory estimates and that people with diabetes regularly taking diabetes medication have lower mortality rates. Moreover, we demonstrate how these results can be used to design diabetes related insurance products and prepare the insured to face the impact of incurring diabetes. In addition, we consider different criteria for judging whether people have diabetes (as there is no consensus on these criteria) and investigate the issue of moral hazard in designing diabetes insurance products.

Suggested Citation

  • Jack C Yue & Hsin-Chung Wang & Ting-Chung Chang, 2024. "Application of type II diabetes incidence and mortality rates for insurance," PLOS ONE, Public Library of Science, vol. 19(9), pages 1-16, September.
    • Handle: RePEc:plo:pone00:0307508
    DOI: 10.1371/journal.pone.0307508
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0307508
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0307508&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0307508?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yue, Jack C. & Wang, Hsin-Chung & Leong, Yin-Yee & Su, Wei-Ping, 2018. "Using Taiwan National Health Insurance Database to model cancer incidence and mortality rates," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 316-324.
    2. Andrew Cairns & David Blake & Kevin Dowd & Guy Coughlan & David Epstein & Alen Ong & Igor Balevich, 2009. "A Quantitative Comparison of Stochastic Mortality Models Using Data From England and Wales and the United States," North American Actuarial Journal, Taylor & Francis Journals, vol. 13(1), pages 1-35.
    3. Wang, Hsin-Chung & Yue, Ching-Syang Jack & Chong, Chen-Tai, 2018. "Mortality models and longevity risk for small populations," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 351-359.
    4. Carter, Lawrence R. & Lee, Ronald D., 1992. "Modeling and forecasting US sex differentials in mortality," International Journal of Forecasting, Elsevier, vol. 8(3), pages 393-411, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blake, David & Cairns, Andrew J.G., 2021. "Longevity risk and capital markets: The 2019-20 update," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 395-439.
    2. Massimiliano Menzietti & Maria Francesca Morabito & Manuela Stranges, 2019. "Mortality Projections for Small Populations: An Application to the Maltese Elderly," Risks, MDPI, vol. 7(2), pages 1-25, March.
    3. Norkhairunnisa Redzwan & Rozita Ramli, 2022. "A Bibliometric Analysis of Research on Stochastic Mortality Modelling and Forecasting," Risks, MDPI, vol. 10(10), pages 1-17, October.
    4. Li, Li & Li, Han & Panagiotelis, Anastasios, 2025. "Boosting domain-specific models with shrinkage: An application in mortality forecasting," International Journal of Forecasting, Elsevier, vol. 41(1), pages 191-207.
    5. Jonas Hirz & Uwe Schmock & Pavel V. Shevchenko, 2017. "Actuarial Applications and Estimation of Extended CreditRisk+," Risks, MDPI, vol. 5(2), pages 1-29, March.
    6. Dorota Toczydlowska & Gareth W. Peters & Man Chung Fung & Pavel V. Shevchenko, 2017. "Stochastic Period and Cohort Effect State-Space Mortality Models Incorporating Demographic Factors via Probabilistic Robust Principal Components," Risks, MDPI, vol. 5(3), pages 1-77, July.
    7. Karim Barigou & Stéphane Loisel & Yahia Salhi, 2020. "Parsimonious Predictive Mortality Modeling by Regularization and Cross-Validation with and without Covid-Type Effect," Risks, MDPI, vol. 9(1), pages 1-18, December.
    8. Li, Johnny Siu-Hang, 2010. "Pricing longevity risk with the parametric bootstrap: A maximum entropy approach," Insurance: Mathematics and Economics, Elsevier, vol. 47(2), pages 176-186, October.
    9. Katrien Antonio & Anastasios Bardoutsos & Wilbert Ouburg, 2015. "Bayesian Poisson log-bilinear models for mortality projections with multiple populations," Working Papers Department of Accountancy, Finance and Insurance (AFI), Leuven 485564, KU Leuven, Faculty of Economics and Business (FEB), Department of Accountancy, Finance and Insurance (AFI), Leuven.
    10. Blake, David & El Karoui, Nicole & Loisel, Stéphane & MacMinn, Richard, 2018. "Longevity risk and capital markets: The 2015–16 update," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 157-173.
    11. D’Amato, Valeria & Di Lorenzo, Emilia & Haberman, Steven & Sagoo, Pretty & Sibillo, Marilena, 2018. "De-risking strategy: Longevity spread buy-in," Insurance: Mathematics and Economics, Elsevier, vol. 79(C), pages 124-136.
    12. Enrico Biffis & David Blake & Lorenzo Pitotti & Ariel Sun, 2016. "The Cost of Counterparty Risk and Collateralization in Longevity Swaps," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(2), pages 387-419, June.
    13. McCarthy, David G. & Wang, Po-Lin, 2021. "Pooling mortality risk in Eurozone state pension liabilities: An application of a Bayesian coherent multi-population cohort-based mortality model," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 459-485.
    14. Leung, Melvern & Li, Youwei & Pantelous, Athanasios A. & Vigne, Samuel A., 2021. "Bayesian Value-at-Risk backtesting: The case of annuity pricing," European Journal of Operational Research, Elsevier, vol. 293(2), pages 786-801.
    15. Hunt, Andrew & Villegas, Andrés M., 2015. "Robustness and convergence in the Lee–Carter model with cohort effects," Insurance: Mathematics and Economics, Elsevier, vol. 64(C), pages 186-202.
    16. Wang, Chou-Wen & Huang, Hong-Chih & Hong, De-Chuan, 2013. "A feasible natural hedging strategy for insurance companies," Insurance: Mathematics and Economics, Elsevier, vol. 52(3), pages 532-541.
    17. repec:hum:wpaper:sfb649dp2008-052 is not listed on IDEAS
    18. Flici, Farrid, 2016. "Projection des taux de mortalité par âges pour la population algérienne [Forecasting The Age Specific Mortality Rates For The Algerian Population]," MPRA Paper 98784, University Library of Munich, Germany, revised Dec 2016.
    19. Dowd, Kevin & Cairns, Andrew J.G. & Blake, David & Coughlan, Guy D. & Epstein, David & Khalaf-Allah, Marwa, 2010. "Evaluating the goodness of fit of stochastic mortality models," Insurance: Mathematics and Economics, Elsevier, vol. 47(3), pages 255-265, December.
    20. Bravo, Jorge M. & Ayuso, Mercedes & Holzmann, Robert & Palmer, Edward, 2021. "Addressing the life expectancy gap in pension policy," Insurance: Mathematics and Economics, Elsevier, vol. 99(C), pages 200-221.
    21. Susanna Levantesi & Virginia Pizzorusso, 2019. "Application of Machine Learning to Mortality Modeling and Forecasting," Risks, MDPI, vol. 7(1), pages 1-19, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0307508. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.