Latest Studies

A rocky road so far: Recreational marijuana and impaired driving
James Lynch and Lucian McMahon
Insurance Information Institute special report; 19 pages
March 12, 2019

Marijuana legalization is spreading. What does this mean for traffic safety? More than 30 states, the District of Columbia, Guam and Puerto Rico have programs that allow qualifying patients to access medical marijuana products. Another 13 states permit non-intoxicating medical marijuana products. Ten states and D.C. permit recreational marijuana, where any adult over the age of 21 can possess and use the drug. While recreational marijuana sales are booming, many people are rightly concerned about road safety. This report examines the current state of knowledge related to marijuana impairment: its effects on driving abilities, how traffic safety might be impacted, and how states are grappling with the issue of "stoned driving.” Full report

First Look: 2018 Property/Casualty Financial Results
A.M Best; Page N/A
March 13, 2019

This report containing early insight into U.S. property/casualty (P/C) insurers’ 2018 profitability, discloses that U.S. P/C insurers saw net income rise $25.2 billion to $61.40 billion in 2018. Best attributed the jump to a reduction in catastrophe losses and an increase in net investment income. Data from insurers’ 2018 annual statutory statements received as of March 11, 2019, show net premiums written increased 11.1 percent to $600.3 billion, and net investment income rose 17.3 percent to $57.4 billion. Best estimates catastrophe losses accounted for 5.9 points on the 2018 combined ratio, down from an estimated 10.1 points in 2017. According to the report, the industry’s underwriting loss in 2018 was $794.8 million, compared with $22.80 billion in the prior year. Full report

National Building Code Assessment Report 2019
ISO, a Verisk business;
March 19, 2019

This report examines the code enforcement efforts of more than 25,000 building departments in the United States and offers key insights into how building codes can help prevent losses from disasters. "We have seen heightened incidents of natural disasters during the past few years that have put the nation’s building codes to the test,” said Robert Andrews, vice president and chief field operations officer, ISO Community Hazard Mitigation. "Hurricanes, flood, and wildfire have caused billions of dollars in losses across multiple states. Our new report provides valuable insights about building codes throughout the country and how well they are enforced, which is vital information for communities, municipalities and insurers.” The report features analyses of natural hazards and catastrophes in each state and diverse perspectives on catastrophe mitigation from the federal government, nonprofit organizations, and academia. Full report

Representation of Minorities and Women in Management and Practices to Promote Diversity, 2007-2015
U.S. Government Accountability Office (GAO); Page N/A
February 27, 2019

The insurance industry beats other financial services sectors in its representation of women in management positions, but trails when it comes to minorities in management positions, according to this report. The insurance sector consistently had the highest proportion of women in management positions, followed by banks and other credit institutions from 2007 to 2015. The proportion of women in management decreased in each sector except for the insurance sector, where it increased by 1.9 percentage points to 49.6 percent, according to a GAO analysis of Equal Employment Opportunity Commission data. The representation of minorities increased in all four sectors of the financial services industry (banks and other credit institutions, securities and other activities, insurance, and funds and trusts) but was lowest in the insurance sector at 19.2 percent. Full report

Most pickups need better passenger-side protection
Insurance Institute for Highway Safety; Page N/A
March 21, 2019

Most of the pickup trucks the IIHS recently put through the passenger-side small overlap front test struggled to maintain their structure, but two trucks — the Ford F-150 and the Nissan Titan — earn a good rating. The F-150 and the Titan join the Ram 1500, whose good rating in the test was released late last year. The Honda Ridgeline, which earns an acceptable rating in the passenger-side test, is the only pickup so far to qualify for the 2019 TOP SAFETY PICK award, thanks to available good-rated headlights, which the other models all lack, and available superior-rated front crash prevention. The Ridgeline qualifies for the award only when equipped with those features. The Toyota Tacoma also earns an acceptable rating in the passenger-side test, but it falls short of an award because of headlights. In total, IIHS has rated 11 crew cab pickups in the passenger-side test — four small and seven large. The Toyota Tundra, a large pickup, earns the only poor rating, while five of the trucks rate as marginal. Full report

Pedestrian traffic fatalities by state. 2018 preliminary data
Richard Retting
Governors Highway Safety Association; Page N/A
February 01, 2019

This report indicates that that the number of pedestrians killed on U.S. roads rose to a nearly 30-year high in 2018, reaching an estimated 6,277 deaths. The report attributes the increase to distraction from smartphones and the growing prevalence of SUVs. Pedestrian fatalities now represent approximately 16 percent of motor vehicle deaths, compared with 12 percent a decade ago. All other categories of traffic fatalities increased less than 5 percent during the same period. During the first half of 2018, pedestrian deaths rose in 25 states and Washington, D.C. Federal data show that pedestrian fatalities fell from 6,482 to 4,109 during the period of 1990 to 2009, and then increased 45 percent from 2009 through 2017. Full report

Three in four Americans remain afraid of fully self-driving vehicles
American Automobile Association (AAA);
March 14, 2019

A survey from the American Automobile Association (AAA) shows that 71 percent of Americans would not like to travel in self-driving vehicles, virtually the same as in the survey a year ago and eight percentage points higher than in 2017. Familiarity seems to play a key role in impacting how drivers feel about automated vehicle technology. Many cars on the road today are equipped with advanced driver assistance systems (ADAS), which are considered the building blocks for fully self-driving vehicles. The AAA’s survey revealed that regular interaction with ADAS components like lane keeping assistance, adaptive cruise control, automatic emergency braking and self-parking significantly improves consumer comfort level. On average, drivers who have one of these four ADAS technologies are about 68 percent more likely to trust these features than drivers who don’t have them. Americans are receptive to the idea of automated vehicle technology in limited applications. About half (53 percent) are comfortable with low-speed, short distance forms of transportation like people movers found at airports or theme parks while 44 percent are comfortable with fully self-driving vehicles for delivery of food or packages. However, once the passengers become more personal – in particular, transporting their loved ones – one in five remain comfortable. Full text

Dynamic flood modeling essential to assess the coastal impacts of climate change
Patrick L. Barnard et al.
Nature International Journal of Science; Page N/A
March 13, 2019

A group of scientists from the U.S. Geological Survey (USGS) have conducted the most extensive study so far of the effect of rising sea levels in California and concluded that the damage by the end of the century could cause more destruction than the most severe earthquakes and wildfires in the state’s history. The scientists found that even a modest increase in sea levels, a threat that is generally dismissed as a slow-moving disaster, could be devastating to communities when they are hit by storms. The study is the first to consider increases in sea levels in combination with storms. The researchers also considered such factors as wave action, cliff erosion, beach loss and other coastal threats. These factors have been extensively studied but rarely considered together in one model. According to the report, by 2100 more than half a million Californians and $150 billion in property, equivalent to 6 percent of the state’s GDP, will be at risk of flooding along the coast. Full text

2019 U.S. Property Claims Satisfaction Study
J.D. Power;
February 28, 2019

Property insurers are earning high marks for overall customer satisfaction against a backdrop of deteriorating property loss ratios and low premium growth, but there are still some components of the claims process that are falling short, according to the annual study. The three components of the claims process that have the highest importance weights in overall satisfaction metrics are among those rated lowest by claimants: fairness of the claim settlement; how well they were kept informed on the progress of the claim (claim servicing); and time to settle the claim. This highlights the importance of effective communications as an area for improvement. Overall customer satisfaction among claimants who receive accurate claim length estimates is 151 points higher, on average, than among those whose claim takes longer than expected (905 vs. 754, on a 1,000-point scale). Satisfaction is even lower (753) when no expectation is set at all. Concierge-type services provided at first notice of loss (FNOL) boost customer satisfaction and advocacy. When insurers make a hotel reservation for a claimant immediately upon FNOL, satisfaction increases by 42 points. Other ancillary services driving satisfaction and advocacy include discussing repair options (+44 points); notifying a repair company (+38); and scheduling an estimate (+33). The gap in property claims satisfaction between the highest- and lowest-performing insurers is 76 points, underscoring the importance for customers shopping for insurance to select a property/casualty insurer that can deliver a superior claims service. Full report

Global Insurance Potential Index
Fundación MAPFRE;
December 01, 2018

This report summarizes the analysis conducted by MAPFRE Economic Research for the creation of the MAPFRE GIP Index (Global Insurance Potential Index). The GIP index provides a global vision of the potential for closing the insurance gap, based on the analysis and classification of 96 insurance markets, in both the developed and the emerging economies. The insurance protection gap (IPG) has doubled in the last 20 years, essentially due to the dynamism of the emerging insurance markets, particularly in the life insurance business segment. Nevertheless, in relative terms compared with the size of the actual market, the IPG has in fact stabilized and is now even narrowing down, resulting in a convergence between insurance volume and global income. Full report

Emerging markets: The silver lining amid a challenging outlook
Swiss Re sigma ;
March 01, 2019

This Swiss Re sigma report asserts that emerging markets will continue to be the most important factor in the growth of the global economy over the next decade and expects economic power to increasingly shift from the West to the East. Researchers predict that emerging economies will account for 60 percent of the world’s economic growth by the end of the next decade, and that the seven largest emerging markets will account for 42 percent of the global growth, with China representing 27 percent. The insurance industry’s prospects in emerging markets are expected to remain strong, with Asian insurance markets leading the premium growth for the industry in emerging markets over the next decade. The report opens with a figure showing three distinct periods of growth for emerging markets as well as a 10-year forecast. The article includes 16 additional figures in its discussion of five macroeconomic challenges among emerging markets and their implications for the insurance industry. Full report

Generational trends in vehicle ownership and use: Are millennials any different?
Christopher R. Knittel and Elizabeth Murphy
National Bureau of Economic Research;
March 01, 2019

This study sets out to test the anecdotal evidence that millennials are happy to rely on public transit or ride-hailing and are therefore less likely to own vehicles than previous generations. Using data from the U.S. National Household Travel Survey, the U.S. Census, and the American Community Survey, the authors estimated both regression and nearest-neighbor matching models to control for the confounding effect of demographic and macroeconomic variables. They found little difference in preferences for vehicle ownership between millennials and prior generations once they controlled for confounding variables. In contrast to anecdotes often reported, millennials showed higher usage in terms of vehicle miles traveled (VMT) compared to baby boomers. The study also looked at life choices that may affect vehicles ownership and use. It found that millennials are more likely to live in urban settings and less likely to marry by age 35, but tend to have larger families, controlling for age. On net, these choices have a small effect on vehicle ownership, reducing the number of vehicles per household by less than 1 percent. Full report