Latest Studies - June 2016

Each month the Insurance Information Institute compiles recent studies from industry, government, academic and other sources. Topics include consumer issues, industry trends, climate and environment, and studies covering individual lines of business like automobile liability and workers compensation.

David Fennig
NICB Forecast Report; 7 Pages
May 2, 2016

This report contains an analysis of insurance claims associated with hail storms in the United States from 2013 to 2015. In 2013, there were 720,473 hail damage claims filed. That number increased in 2014 to 824,325 then dropped in 2015 to 572,182 claims—an overall decrease of 21 percent from 2013 to 2015. There were 10 major hail-producing storms during this period, according to the National Oceanic and Atmospheric Administration (NOAA), each of which caused over $1 billion in property damage. According to data from Verisk’s A-PLUS™ property database, U.S. insurers paid almost 9 million claims for hail losses, totaling more than $54 billion from 2000 through 2013. In recent years, the costs of these hail-related claims has dramatically increased. The average claim severity during the period 2008–2013 was 65 percent higher than it was from 2000 through 2007.   A total of 2,116,980 hail loss claims were processed from January 1, 2013 through December 31, 2015. During this period, the top five states generating hail damage claims were Texas (394,572), Colorado (182,591), Nebraska (148,346), Kansas (127,963) and Illinois (120,513).  The top five months, on average, when the most hail loss claims were reported during this period were May (165,087), April (149,040), June (129,085), March (61,072) and July (55,650).  The NICB warns consumers to be wary of unethical contractors posing as legitimate repairmen and to always check first with their insurance company before signing any documents presented by a contractor who appears without being called. The report breaks down the number of claims by state, by month and by policy type. Full Report.

Travelers; 8 Pages
May 1, 2016

Travelers analyzed more than 1.5 million workers compensation claims submitted from 2010 through 2014 for this report on worker injuries. The analysis identified the most common workplace injuries, those with the greatest severity and the top causes of accidents by business size, industry and region. The top injury, strains/sprains (30 percent of all claims), is driving opioid use. These soft tissue injuries often lead to chronic pain, which opioids are prescribed to treat. Of the workers compensation claims Travelers processes a year – 90 percent involve pain medications. Small and mid-sized businesses accounted for 59 percent of claims and large businesses accounted for 40 percent. Travelers research shows that 28 percent of new hires are injured within the first year of employment. The costs of replacing an employee are 9 percent of an employee’s annual wage, spanning recruitment, training and any separation costs (Source: The Institute for Research on Labor and Employment). Full Report

AAA Foundation for Traffic Safety; 26 Pages
May 1, 2016

This study set out to determine the frequency of marijuana involvement in fatal crashes in the state of Washington from 2010 to 2014 and to investigate whether the rate changed after Washington Initiative 502, which legalized recreational use of marijuana for adults, took effect on 6 December 2012. The study examined the presence and concentration of delta-9-tetrahydrocannabinol (THC), the main psychoactive chemical in marijuana, in the blood toxicological test results of Washington drivers involved in fatal crashes. Statewide, 3,031 drivers were involved in fatal crashes from 2010 to 2014. From 2010 through 2013, the estimated number and proportion of drivers involved in fatal crashes who had a detectable concentration of THC in their blood ranged from a low of 48 (7.9 percent) to a high of 53 (8.5 percent); the number and proportion both approximately doubled from 49 (8.3 percent) in 2013 to 106 (17.0 percent) in 2014. Analysis of trends over time before and after Initiative 502 took effect indicated that the proportion of drivers positive for THC was generally flat before and immediately after Initiative 502 took effect, but began increasing significantly at a rate of 9.7 percentage points per year approximately 9 months after Initiative 502 took effect. The study summary states that these results do not indicate that drivers with detectable THC in their blood at the time of the crash were necessarily impaired by THC or that they were at-fault for the crash. Full Report

Thomas G. Brown et al.
PLoS One; Page N/A
February 24, 2016

This study suggests that risky drivers, including speeders, drunk drivers and others who may be reckless, distracted or fatigued, drive dangerously for different reasons. The study concludes that awareness of differences in motivations could lead to improved interventions. The study outlines three distinct psychological profiles for risky drivers—one for drivers with multiple DUIs, one for those with frequent speed violations and another for drivers having both of these problems. The researchers recruited men between the ages of 19 and 39 who fall into each of the three categories. The study found measurable differences among the driving categories. One of the study’s conclusions is that the effect of making drunk drivers work in a morgue in order to make them more aware of drunk driving is overrated. Full Report

Dr. Simon A. Rego and Jennifer L. Taitz
Underwritten by Liberty Mutual Insurance; 18 Pages
May 9, 2016

This report was co-authored by a behavioral psychologist and sponsored by Liberty Mutual in an effort to understand how to mitigate worries. The report found that 38 percent of people worry every day, most frequently in the early morning or late evening. The study found that older adults worry less than younger ones and that what people worry about varies at different stages in their lives. Older adults looking back on their life often say their biggest regret is that they spent so much time worrying! Money and housing worries are typically highest for people aged 25 to 44, years marked by life events including purchasing a first home and having children. This age group commonly worries about protecting their families or their homes. Women generally worry more than men do and often about interpersonal relationships. Dr. Rego stated that “A growing body of scientific literature suggests that consistent worrying can have both short and long term effects on your well-being.”  He offers the following three tips to worry less: schedule a time to worry; replace worrying with a conscientious plan - define the problem, clarify goals, generate solutions, and experiment with solutions; and finally accept uncertainty. Full Report

Swiss Re ; 40 Pages
May 25, 2016

This report is based on the SONAR process, a crowdsourcing tool which uses Swiss Re's internal risk management expertise to identify future risks. The report highlights 21 emerging risks that the re/insurance industry should keep an eye on.  The three emerging risks with the highest potential impact are "emerging markets crisis 2.0", "the great monetary experiment" and "Internet fragmentation". Others topics of concern include "human-induced earthquakes" and "mass migration."  Among these risks, the report also highlights a "crisis of trust" in institutions, the "legal and pricing risks of the sharing economy" and technology-related topics, such as the rise of "precision medicine" and "distributed energy generation." The identified risks are relevant to life and non-life insurance areas and are presented with the goal of helping industry players prepare for new scenarios. Full Report

Ariana Eunjung Cha
The Washington Post; Page A3
May 4, 2016

A study published May 3 in the medical journal BMJ says that medical errors claim 251,000 lives every year, and may now be the third-leading cause of death in the United States. The study, by patient-safety researchers, found that medical errors led to nearly 700 deaths a day, or about 9.5 percent of all deaths annually in the United States. According to the study, medical errors from potent drugs being given to the wrong patient to surgeons removing the wrong body part are incredibly common. “It boils down to people dying from the care that they receive rather than the disease for which they are seeking care,” said Martin Makary, a professor of surgery at the Johns Hopkins University School of Medicine who led the study. Makary said in an interview that he and co-author Michael Daniel—also from Johns Hopkins—conducted the analysis to shed more light on a problem that many hospitals and healthcare facilities try to avoid discussing. Full text. The study is available on the BMJ site. (Subscription required)

No byline
Workers Compensation Research Institute (WCRI); 110 Pages
May 1, 2016

This report presents a large number of tables showing the workers compensation regulations and benefit levels that were generally in effect as of January 1, 2016, in the United States and the Canadian jurisdictions that decided to participate. The U.S. Department of Labor has worked for years to strengthen the system and originated the use of a standard set of tables to encourage uniformity and consistency in reports from states. To save costs, the department suspended production of their tables after the regulations that became effective on January 1, 2006. To meet popular demand for a continuation of the tables, the Workers’ Compensation Research Institute and the International Association of Industrial Accident Boards and Commissions have worked together on a sixth edition of this resource. The two organizations have worked to present the laws accurately and fairly but warn about the difficulty of summarizing complex laws in all applications. Also, workers comp is entirely controlled by legislative bodies and administrative agencies that are not at a national level, so some jurisdictions have individual approaches to the administration of workers comp. Not only is workers comp inherently complex, but interpretive bulletins and traditional practices differ from agency to agency and case law is continually redefining interpretations and applications. In the introduction, the report provides examples of the questions appropriate for the survey. The report is available for purchase online.

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