Latest Studies - January 2017

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. JUDICIAL HELLHOLES 2016-2017
The American Tort Reform Association (ATRA); 68 pages
December 15, 2016

According to this annual report, St. Louis, Missouri, tops the list of jurisdictions where judges in civil cases systematically apply laws and court procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants. St. Louis is followed by California, New York City's asbestos litigation, New Jersey and the Chicago area. According to ATRA, St. Louis is a magnet for product liability lawsuits and consumer class actions. The local trial court hosted three very large verdicts this year, totaling $197 million, in cases asserting that talcum powder causes ovarian cancer and other multimillion-dollar awards. In California over 800 new laws are passed every year, making it difficult for California residents and businesses to stay current and thus avoid being targeted by the nearly 1 million new lawsuits filed in the state annually. And in New York City's asbestos court defendants face liability beyond their level of responsibility. The report also includes ATRA’s Watch List and Dishonorable Mentions and reports on positive news in its Points of Light section.  Full Report


2. PRELIMINARY SIGMA ESTIMATES: TOTAL LOSSES FROM DISASTER EVENTS RISE TO USD 158 BILLION IN 2016
Swiss Re News Release; Page N/A
December 15, 2016

According to Swiss Re's preliminary estimates, total economic losses from natural catastrophes and man-made disasters will be $158 billion in 2016. Insured losses from disaster events were around $49 billion. Approximately 10,000 people lost their lives in disaster events in 2016. Earthquakes, hail and thunderstorms, and Hurricane Matthew resulted in the largest insurance losses in 2016. The earthquakes that look place around the globe in 2016 highlighted the need for coverage. The total economic cost was at least $20 billion, of which only $5 billion was insured. The Kumamoto, Japan, quakes were the costliest disaster event globally of the year. In October, Hurricane Matthew wreaked havoc across the east Caribbean and southeastern US. Economic losses were $8 billion, with insured losses estimated to be in over $4 billion. Hurricane Matthew was the strongest of the season and also the deadliest natural catastrophe of the year globally, with up to 733 lives lost, most of those in Haiti. The costliest disaster to strike the U.S. was a hailstorm that hit Texas in April, resulting in economic losses of $3.5 billion and insured losses of $3 billion. The biggest flooding event in the U.S. was in August when heavy rains caused widespread flooding in Louisiana and Mississippi. The economic losses from this event totaled $10 billion, while private insured losses were at least $1 billion. Europe and Asia also experienced heavy flooding.  Wildfires in Canada were another cause of large insurance losses in 2016.  The town of Fort McMurray was evacuated, and many homes there were completely destroyed. Economic losses were $3.9 billion and insured losses were around $2.8 billion. This was one of the costliest wildfire events in insurance industry history, and it is the biggest loss the Canadian insurance sector has ever experienced. Full News Release


3. ACUTE SLEEP DEPRIVATION AND RISK OF MOTOR VEHICLE CRASH INVOLVEMENT
AAA Foundation for Traffic Safety; 21 pages
December 1, 2016

Previous research by the AAA Foundation for Traffic Safety has estimated that as many as 7 percent of all crashes, 13 percent of crashes that result in hospital admission and 21 percent of fatal crashes involve driver drowsiness. However, the relationship between specific measures of sleep deprivation and crash risk has not been quantified in the general driving population. This study quantifies the relationship between the number of hours that a driver had slept in the past 24 hours and the risk of crash involvement. The estimated rate ratio for crash involvement associated with driving after only 4-5 hours of sleep compared with 7 hours or more is similar to the U.S. government’s estimates of the risk associated with driving with a blood alcohol concentration equal to or slightly above the legal limit, and the increase in crash rate associated with driving after less than 4 hours of sleep is much greater. Full Report


4. THE CAMBRIDGE GLOBAL RISK INDEX 2017
The Cambridge Centre for Risk Studies; 24 pages
December 5, 2016

This report predicts that global economic losses could total as much as $1.17 trillion over the next three years from a variety of threats. The report identifies 22 threat levels and lists 300 cities that are considered highly influential on the global economy, including Tokyo, Seoul, Hong Kong, Mumbai, Lima, Jakarta, Tel Aviv, Tehran and Moscow. The potential threats include earthquakes, tropical windstorms, droughts, terrorism, civil unrest, pandemics, increases in the price of commodities, conflicts between states, cyberattacks and nuclear accidents. The greatest risk for economic loss historically has been the crash of the stock market, with conflicts between states following closely. Full Report


5. INSURANCE IMPLICATIONS OF HOME-SHARING: REGULATOR INSIGHTS AND CONSUMER AWARENESS
National Association of Insurance Commissioners; 10 pages
December 13, 2016

This white paper drafted by the National Association of Insurance Commissioners (NAIC) focuses on insurance coverage issues in the sharing economy for home rentals. Short-term home rentals by home-sharing companies such as Airbnb present new insurance challenges. The paper discusses various coverage options for homeowners and home or apartment renters. Limitations for each type of coverage are discussed as well as legal restrictions. The paper also focuses on the need for consumer outreach and education regarding these new services. The liability coverage for most homeowners policies covers visitors who fall and are injured on the premises, but this coverage does not apply to paying guests. Homeowners insurance is not generally designed to cover mishaps that occur during short-term property rentals, except for occasional exposures. If the policies specifically exclude claims involving home-sharing or rentals, then any claims involving a paying guest will be denied. Unless the company arranging the hosting provides liability insurance protection, or the property owner independently purchases coverage for short-term rentals, then the owner with a standard homeowners or dwelling policy may not have any coverage. Although homeowners insurance varies, most policies exclude or provide limited coverage for homeowners who are operating businesses in their home, and most insurers would classify short-term rentals or home-sharing as a home-based business. The paper discusses three typical exceptions to the business exclusion that applies to rentals. Unit-owners, dwelling and renters policy coverage options and limitations are also summarized. The article also discusses legal restrictions on the rights of property owners to list their properties on short-term rental sites and their coverage options for guests. Full Report


6. 2016 INSURANCE REGULATION REPORT CARD
R.J. Lehmann
R Street Institute; 29 pages
December 1, 2016

This annual report evaluates how well each state regulates the business of insurance based on politicization, fiscal efficiency, solvency regulation, auto and homeowners insurance markets, residual markets, rate regulation and underwriting freedom.  Overall, Vermont, Utah, Maine, Illinois and Idaho earned top rankings and Hawaii, California, Massachusetts, Alaska and North Carolina ranked last. The report includes a summary of national and federal developments as well as a state by state summary of recent regulatory developments. Full Report


7. U.S COUNTY-LEVEL TRENDS IN MORTALITY RATES FOR MAJOR CAUSES OF DEATH 1980-2014
Laura Dwyer-Lindgren et al.
Journal of the American Medical Association; Page N/A
December 13, 2016

This study examines how mortality rates and causes of death vary by county in the United States. Using an original method, the study found significant variation in mortality rates and changes in mortality rates among counties for 21 major causes of death. Mortality rates from substance abuse increased by 1,000 percent in Appalachia from 1980 to 2014. Neurological disorders such as Alzheimer’s were the third leading cause of death in 2014 and were prevalent across the country, but they have become more common in much of the South, while decreasing in the West. Transport injuries caused 1.8 million deaths (2.2 percent of all deaths) between 1980 and 2014 and were the seventh leading cause of years of life lost and the 11th leading cause of deaths in 2014. In general, lower mortality rates from transport injuries were found in urban areas, while higher mortality rates were found in rural areas. Cardiovascular diseases caused 32 million deaths from 1980 through 2014 and were the leading cause of deaths in 2014. Cardiovascular diseases were an important contributor to mortality in every county in 2014. However, the rate of death from cardiovascular diseases was far from uniform; the highest rates in 2014 were observed in counties in a band stretching from Oklahoma to Mississippi and in eastern Kentucky. The lowest rates were observed in counties in central Colorado and near the border of Idaho, Montana, and Wyoming. Full Text (see also How Americans Die May Depend on Where they Live)


8. HAZARDOUS MATERIALS RAIL SHIPMENTS: A REVIEW OF EMERGENCY RESPONSE INFORMATION IN SELECTED TRAIN DOCUMENTS
The U.S. Government Accountability Office ; Page N/A
December 2, 2016

This report examines the emergency response information carried on trains by railroads transporting hazardous materials and how the railroads' emergency response information compares to information provided by the Department of Transportation's (DOT) Emergency Response Guidebook (ERG). According to four emergency response associations, in the first 30 minutes after a rail incident, emergency responders primarily use the train documents to locate and identify hazardous materials and use the ERG to identify potential response actions. In November 2012, a train derailed in Paulsboro, New Jersey, releasing about 20,000 gallons of vinyl chloride, a hazardous material. The National Transportation Safety Board (NTSB) found, among other issues, that the supplemental information in the train's documents on responding to emergencies involving vinyl chloride was inconsistent with and less protective than emergency response guidance in the ERG. This report was authorized following the 2012 incident. Full Report


9. BREATHE EASY. OSHA TAKES ACTION FOR THE NEW GENERAL INDUSTRY SILICA STANDARD
Robbie Collins and Tim Balmer
Lockton Companies; 8 pages
December 1, 2016

This White Paper concerns the Occupational Safety and Health Administration’s determination that the previous permissible exposure limit (PEL) of crystalline silica poses a hazard to employee health and the new rule, effective June 23, 2016, which cuts the PEL in half. The construction industry has until June 23, 2017, to comply and all other industries have an extra year to comply. Employers must engage in air monitoring and have an exposure control plan in order to comply with the rule. Full Text


If you have a suggestion for a study to be included in this section please email info@iii.org.