Initial selection for Permanent Health Insurance

We investigate the effect of underwriting during the first few years of a policy’s life (the initial selection effect) on the individual Permanent Health Insurance claim inceptions by fitting a generalized linear model. Initial selection is found to be significant and we describe its effect using a factor and a ratio that collect the influence of the policy duration detected through the fitted model. Results from both measures suggest that its effect, against intuition, is negative in most cases.