Latest Studies - January 2015

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.

1. 2011/2012 AUTO INSURANCE DATABASE REPORT
The National Association of Insurance Commissioners. Report.; 249 Pages
December 15, 2014

The National Association of Insurance Commissioners has released its 2011/2012 Auto Insurance Database Report, which provides the average costs associated with personal automobile insurance nationwide. The report features state-by-state auto insurance data designed to provide necessary information and analysis to insurance regulators, consumers and policymakers. The data used for this report includes written premium and exposure data from calendar years 2008-2012 for the combined voluntary and residual market. The report also includes earned premium and exposure data, as well as incurred loss and claims data (separately), from calendar/accident years 2009-2011 for voluntary and residual market business. For each state, average premium and expenditures, pure premium, loss ratio, claim frequency and claim severity are calculated by coverage. The types of auto insurance coverage included are bodily injury and property damage liability (including no-fault), uninsured and underinsured motorist, medical payment, collision and comprehensive. To order the report click here


2. REPORT ON PROFITABILITY BY LINE BY STATE IN 2013
National Association of Insurance Commissioners; Page N/A
December 15, 2014

This statistical report estimates profitability in property/casualty insurance by state and by line  for 2013. It also shows the various components of estimated profits including: premiums earned; losses incurred; loss adjustment expense; general expenses; selling expenses; state taxes, licenses and fees; dividends to policyholders; changes in premium deficiency reserves; underwriting profits; investment income and federal income taxes. Long term historical averages are also provided. The complete report is available for purchase through the NAIC store. A news release is posted at www.naic.org.


3. PERSONAL LINES INSURANCE STATE ENVIRONMENTS CONTINUE TO CHANGE DISPARATELY
Conning. News release; Page N/A
December 15, 2014

The varied pace and character of the economic recovery have changed the outlook for personal lines insurers at the state level, and insurers may wish to reassess their geographic footprints, according to a new study by Conning, “Personal Lines State Environment Annual.” The study analyzes   and presents data for each state for the period 2009 2013, including historical performance, growth and performance drivers, and distribution dynamics. Conning utilizes this data to develop a premium growth outlook for each state. The study is available for purchase from Conning by calling (888) 707-1177 or from the company’s website at www.conningresearch.com.


4. A HISTORICAL LOOK AT VEHICLE THEFT IN THE U.S.
The National Insurance Crime Bureau; Page N/A
December 8, 2014

The National Insurance Crime Bureau (NICB) has released a national analysis of vehicle theft, which compares annual statistics for thefts, population and vehicle registrations from 1960 through 2013. Just released FBI crime figures for 2013 show that 699,594 vehicles were reported stolen, a 58 percent reduction from 1991, when vehicle theft reached an all-time high of 1,661,738. As vehicles rose in numbers across America, they also attracted the attention of the nation’s vehicle thieves. In 1960 there were 328,200 vehicle thefts. In 1991—the peak year—there were 1,661,738 vehicle thefts and the theft rate was 659.01 per 100,000 population. In 2013, despite an increase in population and registrations of over 60 million, thefts were down to 699,594 with a theft rate of 221.3—a decrease of 437.71. For the full news release click here.


5. GLOBAL AVIATION SAFETY STUDY
Allianz; 63 Pages
December 1, 2014

Prepared in collaboration with Embry-Riddle Aeronautical University, this report examines global developments in the commercial aviation sector and air safety from the beginning of the jet age to the present day. The much-improved safety environment is reflected in the fact that premiums for aviation insurance were at their lowest levels for many years, prior to 2014’s loss activity. However, there has been a 50 percent-plus increase in exposure since the turn of the century, driven by increasing fleet values and more passengers. Exposures increased from $576 billion in 2000 to $896 billion in 2014 (according to Aon Airline Insurance Outlook 2014). This means that if exposure growth continues at the same rate, we can expect it to break through the $1 trillion barrier by 2020 or even earlier. In analysis of large insurance claims in excess of $1.36 million (1 million euros), unsurprisingly, plane crashes are the major cause of loss for the aviation sector in terms of number of insurance claims generated (23 percent) and their subsequent value (37 percent). Over/undershot runway incidents ranked second according to value (22 percent). Almost a fifth (18 percent) of aviation claims relate to ground handling claims and 16 percent to mechanical failure.  Full Report
 


6. 2014 INSURANCE REGULATION REPORT CARD
R.J. Lehman
R Street; 34 Pages
December 2, 2014

The R Street Institute has released its annual report card on insurance regulation, awarding Vermont with a grade of “A+” and California and North Carolina grades of “F.” The report examines which states do the best job of regulating the business of insurance, by assigning scores in 12 different areas, including insurer solvency, fraud, competitiveness and willingness to modernize. “Reviewing the data on insurance in 2014, we see mostly stable trends in consumer and business freedom in state insurance markets,” said R Street Editor-in-Chief and Senior Fellow R.J. Lehmann, the author of the study. “In some states – notably Florida – real efforts were made to scale back, or otherwise place on more sound financial footing, residual insurance markets and state-run insurance entities. Other states, notably North Carolina, appear to be moving in the wrong direction.” Vermont received consistent scores across almost all areas of the scorecard, specifically in consumer protection, politicization, auto and homeowners insurance environments, rate freedom and clarity and regulatory restrictions. At the other end of the spectrum, North Carolina received a failing grade in part due to the state’s inflexible rate bureau system and recent growth of the residual market FAIR Plan and Beach Plan. California earned a failing grade due to its similarly inflexible Proposition 103 regulatory system. The report also noted that states continue to draw far more in regulatory fees and assessments than they spend on insurance regulation. The 50 states, Puerto Rico and the District of Colum­bia spent $1.32 billion on insurance regulation in 2013 but collected more than double that. The full report can be read here.


7. CAUSES AND PREDICTABILITY OF THE 2011-14 CALIFORNIA DROUGHT
Richard Seager et al
National Oceanic and Atmospheric Organization, Climate Program Office; 42 Pages
December 1, 2014

According to this study, natural oceanic and atmospheric patterns are the primary drivers behind California's ongoing drought. A high pressure ridge off the West Coast (typical of historic droughts) prevailed for three winters, blocking important wet season storms, with ocean surface temperature patterns making such a ridge much more likely. Typically, the winter season in California provides the state with a majority of its annual snow and rainfall that replenish water supplies for communities and ecosystems.  Further studies on these oceanic conditions and their effect on California's climate may lead to advances in drought early warning that can help water managers and major industries better prepare for lengthy dry spells in the future. Full Report


8. THE WAY FORWARD. INSURANCE IN AN AGE OF CUSTOMER INTIMACY AND INTERNET OF THINGS
The Economist Intelligence Unit. Special Report.; 26 Pages
October 1, 2014

To gain greater insight into future changes in the insurance industry, the EIU surveyed over 300 executives at life and property/casualty insurers. This report, sponsored by SAP, reveals how insurers have increasingly moved towards a stronger consumer orientation in the age of e-commerce. Insurers’ efforts to meet expectations set by other industries have also accelerated with the advent of smart devices and anytime/anywhere computing. Combined with advances in data processing, the proliferation of these and other devices has enabled vastly expanded sharing, collection and analysis of data. The survey covers insurers’ attitudes towards: core processing systems; new ways to interact with customers; new distribution arrangements; new ways of leveraging data; and new ways to underwrite risk by using telematics. Full Report

 

 

 


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