Abstract: The development and use of a model to estimate disability insurance exposure for a group of individuals to be underwritten for a coverage period is disclosed. The development of the model includes the use of medical claim data having a plurality of medical claims made by a first model population having at least a respective plurality of first model population members and a disability insurance claim data having a plurality of disability insurance claims made by a second model population having at least a respective plurality of second model population members, which optionally may partially or wholly overlap with the first model population. A clinical medical condition classification system assigns corresponding medical condition causes to the disability insurance claims and the medical claims based on medical condition information.

Abstract: A method of model development for use in underwriting group life insurance for a policy period includes collecting medical claims data for the group to be underwritten, where each medical claim being related to a particular employee of the group. Morbidity categories are provided that categorize the medical claims in the medical claims data. A conditional probability model is developed and applied to the morbidity categories for each employee in the group using his medical claims, thereby calculating the expected conditional probability for each employee dying during the policy period. For each employee, an estimate of the expected life claim cost is estimated using an index of the life coverage to salary. Combining the expected conditional probability for each employee dying during the policy period with the estimate of the expected claim cost of death gives an estimate of the group's total life exposure.