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Future Shock: What’s Ahead forthe US Economy and the
Insurance Industry
Robert P. Hartwig, Ph.D., CPCU ♦Clinical Associate Professor of Finance ♦ Darla Moore School of Business
University of South Carolina andSpecial Consultant ♦
Insurance Information Institute Tel: 917.453.1885 ♦ [email protected] ♦ www.iii.org
THE ECONOMY
2
How Will “Trumponomics” Impactthe Insurance Industry and the Overall
Economy?
2
3
Trumponomics: The Essential Elements
5 Elements Healthcare Fair TradeDeregulationTax Reform Infrastructure Investment Immigration
Reform/Enforcement
Most of these have direct impacts for insurers
Awakening America’s“Animal Spirits”
44
Economic Policy and the Insurance Industry
The Strength of the Economy Will Greatly Influence Insurer Exposure
Base Across Most
5
US Real GDP Growth*
* Estimates/Forecasts from Blue Chip Economic Indicators.Source: US Department of Commerce, Blue Economic Indicators 10/17; Insurance Information Institute.
2.7%
1.8%
-1.8
%1.
3%-3
.7%
-5.3
%-0
.3%
5.0%
2.3%
2.2% 2.6%
2.4%
0.1%
2.5%
1.3%
4.1%
2.0%
1.3%
3.1%
0.4%
2.7%
1.8%
3.5%
-0.9
%4.
6%4.
3%2.
1%2.
0% 2.6%
2.0%
0.9%
0.8% 1.
4%3.
5%2.
1%1.
2%3.
1%3.
0%2.
5%2.
3%2.
4%2.
3%2.
2%
-8.9%
4.5%
1.4%
4.1%
1.1% 1.
8% 2.5% 3.
6%3.
1%
-9%
-7%
-5%
-3%
-1%
1%
3%
5%
7%
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
08:1
Q08
:2Q
08:3
Q08
:4Q
09:1
Q09
:2Q
09:3
Q09
:4Q
10:1
Q10
:2Q
10:3
Q10
:4Q
11:1
Q11
:2Q
11:3
Q11
:4Q
12:1
Q12
:2Q
12:3
Q12
:4Q
13:1
Q13
:2Q
13:3
Q13
:4Q
14:1
Q14
:2Q
14:3
Q14
:4Q
15:1
Q15
:2Q
15:3
Q15
:4Q
16:1
Q16
:2Q
16:3
Q16
:4Q
17:1
Q17
:2Q
17:3
Q17
:4Q
18:1
Q18
:2Q
18:3
Q18
:4Q
Demand for Insurance Should Increase in 2017-18 as GDP Growth Continues at a Steady, Albeit Moderate Pace and Gradually Benefits the
Economy Broadly
Real GDP Growth (%)
Recession began in Dec, 2007
The Q4:2008 decline was the steepest since the Q1:1982 drop of 6.8%
2017/18 GDP forecasts were revised upwards by ~0.2%
following Trump election. Tax reform could add 0.1% - 0.2%
to real GDP growth in 2018
The Economy Drives P/C InsuranceIndustry Premiums: 2006:Q1 – 2017:Q2Direct Premium Growth (All P/C Lines) vs. Nominal GDP: Quarterly Y-o-Y Pct. Change
Sources: SNL Financial; U.S. Commerce Dept., Bureau of Economic Analysis; I.I.I.
-6%
-3%
0%
3%
6%
9%
12%
2006:Q1
2006:Q3
2007:Q1
2007:Q3
2008:Q1
2008:Q3
2009:Q1
2009:Q3
2010:Q1
2010:Q3
2011:Q1
2011:Q3
2012:Q1
2012:Q3
2013:Q1
2013:Q3
2014:Q1
2014:Q3
2015:Q1
2015:Q3
2016:Q1
2016:Q3
2017:Q1
DWP y-o-y change y-o-y nominal GDP growth
Direct Written Premiums track Nominal GDP—not quarter by quarter but overall fairly well.
-4%
-2%
0%
2%
4%
6%
8%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. DWP: All Lines
SC DWP: All Lines
All Lines Direct Written Premium Growth: SC vs. U.S.: 2007–2016
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Average 2007–2016
U.S.: 2.1%SC: 2.7%
8
Animal Spirits: Unleashed from the Oval Office?
Source: https://twitter.com/realDonaldTrump
9
Consumer Confidence Index:Jan. 1987 – Oct. 2017
Source: The Conference Board; Wells Fargo Research.
Outlook: Consumers are optimistic about the future, which is consistent with expectations for stronger economic growth (consumers account for nearly 70% of all spending in the economy). Should positively influence
business investment.
The Conference Board’s Consumer Confidence Index stood at 125.9 in
Oct., a post-recession high
10
Consumer Confidence by Household Income: Jan. 1985 – Oct. 2017
Source: The Conference Board; Wells Fargo Research.
Outlook: Consumers are optimistic about the future, which is consistent with expectations for stronger economic growth (consumers account for nearly 70% of all spending in the economy). Should positively influence
business investment.
Optimism is up across all income
levels, though those with incomes below
$25K are lagging behind
11
NFIB Small Business Optimism Index:Jan. 1988 – June 2017
Source: National Federal of Independent Business; Wells Fargo Research.
Outlook: Small businesses are much more optimistic about the future
The NFIB’s Index of Small Business
Optimism remains near recent highs, but slipped in June
as hopes for significant
regulatory and tax reform fade
12
16.9
16.5
16.1
13.2
10.4
11.6 12
.714
.4 15.5 16
.4 17.4
17.5
16.9
16.8
16.8
16.7
16.7
16.7
16.9
16.9
16.617
.117.5
17.8
17.4
910111213141516171819
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17F18F 19F 20F21F 22F 22F
(Millions of Units)
Auto/Light Truck Sales, 1999-2023F
New auto/light truck sales fell to the lowest level since the
late 1960s. Forecast for 2014-15 is still below 1999-2007 average of 17 million units,
but a robust recovery is well underway.
Job growth and improved credit market conditions
boosted auto sales to near record levels in
recent years
Truck, SUV purchases remain strong but have slumped a bit
Yearly car/light truck sales are slowing slightly, as demand tapers following the recovery from the recession. PP Auto premium might
grow by 3.5% - 5%.
Sales have returned to pre-
crisis levels
Source: U.S. Department of Commerce; Blue Chip Economic Indicators (10/17 for 2017-18; 10/17 for 2018-23F; Insurance Information Institute.
13
Manufacturing: ISM New Orders IndexJan. 1990 – Oct. 2017 (>50 implies expansion)
Source: Institute for Supply Management (ISM); Wells Fargo Securities.
Manufacturing activity remains near its cyclical
high
14
(Millions of Units)
New Private Housing Starts, 1990-2023F
1.48
1.47 1.
62 1.64
1.57 1.60 1.
71 1.85 1.
96 2.07
1.80
1.36
0.91
0.55 0.59 0.61
0.78 0.
92 1.00 1.
11 1.17 1.21 1.
31 1.36 1.40 1.43 1.45 1.48
1.351.
461.
291.
201.
011.
19
0.3
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17F18F19F20F21F22F23F
Source: U.S. Department of Commerce; Blue Chip Economic Indicators (19/17 for 2017-18; 10/17 for 2018-23F; Insurance Information Institute.
Insurers Are Continue to See Meaningful Exposure Growth in the Wake of the “Great Recession” Associated with Home Construction: Construction Risk
Exposure, Surety, Commercial Auto; Potent Driver of Workers Comp Exposure
New home starts plunged 72% from 2005-2009; A net
annual decline of 1.49 million units, lowest since records began
in 1959
Job growth, low inventories of existing homes, still-low mortgage
rates and demographics should continue to stimulate new home
construction for several more years
15
Construction Spending:Jan. 2000 – Oct. 2017 ($ Bill)
Source: US Dept. of Commerce; Wells Fargo Securities.
Private (but not public)
construction spending remains relatively
strong. Public construction
spending could benefit from a
boost in infrastructure
investment
16
New Home Sales: By RegionJan. 1989 – July 2017 (thousands, annual rate)
Source: US Dept. of Commerce; Wells Fargo Securities.
New home sales are strongest
in the South, West
17
US Unemployment Rate Forecast4.
5%4.
5% 4.6% 4.
8% 4.9%
5.4%
6.1%
6.9%
8.1%
9.3% 9.
6% 10.0
%9.
7%9.
6%9.
6%
8.9% 9.
1%9.
1%8.
7%8.
3%8.
2%8.
0%7.
8%7.
7%7.
6%7.
3%7.
0%6.
6%6.
2%6.
1%5.
7%5.
6%5.
4%5.
2%5.
0%4.
9%4.
9%4.
9%4.
7%4.
7%4.
4%4.
3%4.
3%4.
2%4.
2%4.
1%4.
1%
9.6%
4%
5%
6%
7%
8%
9%
10%
11%
07:Q
107
:Q2
07:Q
307
:Q4
08:Q
108
:Q2
08:Q
308
:Q4
09:Q
109
:Q2
09:Q
309
:Q4
10:Q
110
:Q2
10:Q
310
:Q4
11:Q
111
:Q2
11:Q
311
:Q4
12:Q
112
:Q2
12:Q
312
:Q4
13:Q
113
:Q2
13:Q
313
:Q4
14:Q
114
:Q2
14:Q
314
:Q4
15:Q
115
:Q2
15:Q
315
:Q4
16:Q
116
:Q2
16:Q
316
:Q4
17:Q
117
:Q2
17:Q
317
:Q4
18:Q
118
:Q2
18:Q
318
:Q4
Rising unemployment eroded payrolls
and WC’s exposure base.
Unemployment peaked at 10% in late 2009.
* = actual; = forecastsSources: US Bureau of Labor Statistics; Blue Chip Economic Indicators (10/17 edition); Insurance Information Institute.
2007:Q1 to 2018:Q4F*
Unemployment forecasts have been revised modestly downwards. Optimistic
scenarios put the unemployment as low as 4.2% by Q4 2017 and
3.8% by Q4 2018.
Jobless figures have been revised
downwards for 2017/18
18
Unemployment vs. Underemployment:Jan. 1994 – Oct. 2017 ($ Bill)
Source: US Bureau of Labor Statistics; Wells Fargo Research.
The number of “discouraged
workers” continues to
fall, from nearly 18% in 2010 t0
7.9% in Oct. 2017
19
Jobs Plentiful vs. Hard to Get:Jan. 1987 – Oct. 2017 ($ Bill)
Source: The Conference Board; Wells Fargo Research.
More workers now believe jobs
are plentiful than scarce
20
Average Hourly Earnings:Jan. 2007 – Oct. 2017 ($ Bill)
Source: US Bureau of Labor Statistics; Wells Fargo Research.
Hourly earnings fell in October, but should
soon begin to respond to tightening labor market conditions
21
Annual Inflation Rates, (CPI-U, %),1990–2018F
2.8 2.6
1.51.9
3.3 3.4
1.3
2.5 2.3
3.0
3.8
2.8
3.8
-0.4
1.6
3.2
2.11.5 1.6
0.1
1.3
2.1 1.9
2.92.4
3.23.0
5.14.9
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17F18F
Sources: US Bureau of Labor Statistics; Blue Chip Economic Indicators, 10/17 (forecasts).
Slack in the U.S. economy and falling energy prices suggests that inflationary pressures should remain subdued for an extended period of times
Annual Inflation Rates (%)
Inflation peaked at 5.6% in August 2008 on high energy and commodity crisis. The recession and the collapse of the
commodity bubble reduced inflationary pressures in 2009/10
Inflationary expectations are
up on expectations of
stronger economic
growth, deficit spending
INVESTMENTS: THE NEW REALITY
22
Investment Performance is a Key Driver of Insurer Profitability
The “Trump Bump” Has Lifted Stock Markets and Interest Rates
Will the Gains Help Insurers?22
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16
*Through Nov. 7, 2017.Source: NYU Stern School of Business: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html Ins. Info. Inst.
Tech Bubble Implosion
Financial Crisis
Annual Return
Energy Crisis
2016: +9.5%2017 YTD: +15.7%*
S&P 500 Index Returns, 1950 – 2017*
Fed Raises Rate
Stock markets rose sharply following the 2016 election and continued to rise through the first half of 2017. Trump Bump: Sharp surge in stock post-election
24
U.S. Treasury Security Yields:A Long Downward Trend, 1990–2017*
*Monthly, constant maturity, nominal rates, through August 2017.Sources: Federal Reserve Bank at http://www.federalreserve.gov/releases/h15/data.htm. National Bureau of Economic Research (recession dates); Insurance Information Institute.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Recession2-Yr Yield10-Yr Yield
Yields on 10-Year U.S. Treasury Notes have been essentially
below 5% for more than a decade.
Since roughly 80% of P/C bond/cash investments are in 10-year or shorter durations, most P/C insurer portfolios will have low-yielding bonds for years to come.
Late 2016 “Trump Bump” in the
aftermath of the 2016 election—shrank in 2017
24
Net Investment Yield on Property/ Casualty Insurance Invested Assets, 2007–2016*
4.4
4.0
4.6 4.5
3.73.8
3.7
3.4
3.7
3.2 3.1
4.6
4.2
3.9
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
4.8
03 04 05 06 07 08 09 10 11 12 13 14 15 16
The yield on invested assets remains low relative to pre-crisis yields. Fed rate increases beginning in late 2015 have pushed up some yields, albeit
quite modestly.
Sources: NAIC data, sourced from S&P Global Market Intelligence; Insurance Information Institute.
(Percent) Investment yield in 2016 were down about 150
BP from pre-crisis levels
P/C Insurer Investment Yields:Lowest in Half a Century
0
1
2
3
4
5
6
7
8
9
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Yield on average cash and investment assets,%
Average yields in 2016 dropped to 3.1%, their lowest
level since the mid-1960s
% Change
Insurers Are Major Investors, 2016*
Total invested assets: $6.1 trillion* 22% of corporate bonds outstanding15% of municipal bonds outstanding
*Includes affiliated and unaffiliated investments. All segments of the insurance industry.Sources: NAIC (the Center for Insurance Policy and Research, August 24, 2017) via SNL Financial; I.I.I.
Categories of Investments ($billions) Categories of Bonds ($billions)
$4,088$749
$508$796
BondsStockMortgages & Real EstateOther
$2,222
$562
$906
$267 $131
Corporates
Munis
Mortgage & Asset-Backed
US Gov't
Other
Property/Casualty Insurance Industry Investment Income: 2000–2017E*
$38.9$37.1 $36.7
$38.7
$54.6
$51.2
$47.1 $47.6$49.2
$48.0 $47.3 $46.4 $47.2 $46.3 $46.8
$39.6
$49.5$52.3
$30
$40
$50
$60
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17E*
Due to persistently low interest rates, investment income fell in 2012, 2013 and 2014 but showed a small (1.7%) increase in 2015—
though 2016 experienced another decline.1 Investment gains consist primarily of interest and stock dividends. Sources: ISO; Insurance Information Institute.*2017 estimate based on annualized $23.4B actual figure for 1st Half 2017.
($ Billions)Investment earnings in 2016
were still 15% below their 2007 pre-crisis peak and will fall will
below in 2017 as well
29
Interest Rate Forecasts: 2017F – 2023F
2.8% 2.8% 2.8%
2.2%
1.8%
2.3%
2.8%
3.4% 3.5% 3.5% 3.6% 3.6%
0.1%0.3%
0.9%
1.7%
2.4%2.7%
0%
1%
2%
3%
4%
15 16 17F 18F 19F 20F 21F 22F 23F 15 16 17F 18F 19F 20F 21F 22F 23F
A full normalization of interest rates is unlikely until the early/mid-2020s, more than a decade after the onset of the financial crisis.
Yield (%)
Sources: Blue Chip Economic Indicators (10/17 for 2017 and 2018; for 2019-2021 10/17 issue); Insurance Info. Institute.
3-Month Treasury 10-Year Treasury
Forecast 10-year yield is up
sharply for 2017
30
Insured Catastrophe Losses
2017 Will Become One of the Costliest Years Ever for US Insurers
Hurricanes Harvey and Irma Exacta Big Toll
30
31
$13.
0$1
1.3
$3.9
$14.
8$1
1.9
$6.3
$35.
8$7
.8 $16.
8$3
4.7
$10.
9$7
.7$3
0.1
$11.
8$1
4.9
$34.
6$3
6.1
$13.
1$1
5.5
$15.
2 $21.
6$5
7.7
$75.7
$14.
4$5
.0 $8.2
$38.
9$9
.1$2
7.2
$0
$10
$20
$30
$40
$50
$60
$70
$80
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17*
U.S. Insured Catastrophe Losses, 1989 – 2017E
*Includes PCS H1 insured losses of $17.7B, estimated Hurricane Harvey and Irma insured losses of $20B and $18B, respectively. Stated in 2017 dollars. Excludes NFIP losses.Note: 2001 figure includes $20.3B for 9/11 losses reported through 12/31/01 ($25.9B 2011 dollars). Includes only business and personal property claims, business interruption and auto claims. Non-prop/BI losses = $12.2B ($15.6B in 2011 dollars.) Sources: Property Claims Service/ISO; Insurance Information Institute.
2017 is likely to become the second most costly
year ever for insured CAT losses, behind only 2005. Maria losses in PR could push this figure beyond
$75B ($ Billions, $ 2015)
31
32
Inflation Adjusted U.S. Catastrophe Losses by Cause of Loss, 1997–20161
0.2%2.0%7.0%
5.9%
6.7%
39.9%
38.2%
1. Catastrophes are defined as events causing direct insured losses to property of $25 million or more in 2016 dollars.2. Excludes snow.3. Does not include NFIP flood losses4. Includes wildland fires5. Includes civil disorders, water damage, utility disruptions and non-property losses such as those covered by workers compensation.Source: ISO’s Property Claim Services Unit.
Hurricanes & Tropical Storms, $161.1
Fires (4), $8.4
Events Involving Tornadoes (2), $168.1
Winter Storms, $28.2
Terrorism, $25.0
Other Wind/Hail/Flood (3), $29.7
Other (5), $0.8
Wind losses are by far cause the most catastrophe losses,
even if hurricanes/TS are excluded.
Tornado share of CAT losses is
rising
Insured cat losses from 1997-2016
totaled $421.2B, an average of $21.1B per year or $1.76B
per month
Winter storm losses were much above average in 2014/15 pushing
this share up
33
Top 18 Most Costly Disastersin U.S. History—Katrina Still Ranks #1
(Insured Losses, 2017 Dollars, $ Billions)*
$9.3 $9.7 $11.7 $14.2$18.0 $19.8 $20.0 $22.0
$25.3 $26.0 $27.1
$51.6
$8.3$7.9$7.5$7.1$6.0$5.9
$0
$10
$20
$30
$40
$50
$60
Jeanne(2004)
Frances(2004)
Rita (2005)
Tornadoes/T-
Storms (2011)
Tornadoes/T-
Storms (2011)
Hugo (1989)
Ivan (2004)
Charley(2004)
Wilma(2005)
Ike (2008)
Irma (2017)
Sandy(2012)
Harvey(2017)
Maria (2017)
Northridge(1994)
9/11 (2001)
Andrew(1992)
Katrina(2005)
Harvey, Irma and Maria combined caused an
estimated $60B+ in privately insured losses in the US
Includes Tuscaloosa, AL,
tornado
Includes Joplin, MO, tornado
15 of the 18 Most Expensive Insurance Events in US History Have Occurred Since 2004—3 of those in 2017
*Adjusted to June 2017 values.Sources: PCS, RMS, Karen Clark & Co; USC Center for Risk and Uncertainty Management adjustments to 2017 dollars using the CPI.
34
1,92
6,38
82,
016,
785
2,11
9,03
92,
115,
183
2,14
9,15
32,
292,
947
2,47
7,86
12,
532,
713
2,62
3,40
62,
828,
558
3,47
6,82
93,
693,
076
4,10
2,41
64,
235,
138
4,32
9,98
54,
369,
087
4,45
8,47
04,
519,
799
4,56
5,49
14,
667,
446
4,96
2,01
15,
514,
895
5,65
5,91
95,
684,
275
5,70
0,23
55,
645,
436
5,64
6,14
45,
620,
017
5,56
8,64
25,
406,
725
5,20
5,09
45,
081,
470
4,95
0,56
0
3,040,198
1,44
6,35
41,
843,
441
2,10
3,85
11,
915,
065
1,90
0,54
41,
981,
122
(500,000)
500,000
1,500,000
2,500,000
3,500,000
4,500,000
5,500,000
6,500,000
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
NFIP Policies in Force,1979 – 2017*
*As of June 30, 2017Sources: NFIP/FEMA accessed 9/18/17 at: https://www.fema.gov/total-policies-force-calendar-year; USC Risk and Uncertainty Management Center.
NFIP policies-in-force are down by nearly 750,000—
or 13.2%—from 5.70 million in 2009 to 4.95 million as of mid-2017
(Policies in Force)
34
Before Harvey and Irma, the NFIP was already $24.9B in debt. Harvey NFIP claims are
expected total $7-$10B with Irma adding to this total. NFIP will need to borrow, likely
pushing its debt load well above $35B
35
Residential NFIP Penetration Rates, August 2016
Source: NFIP accesses 9/18/17 at: https://fema.maps.arcgis.com/home/webmap/viewer.html?webmap=3d76edf9bd0642109b60ffaceead76fd
Few Houston-area residents had
flood insurance
FL residents were much
better prepared
Penetration rates are
relatively high in coastal SC
Health Insurance Markets
36
Decades-Old Problem in Search of an Economically and Politically
Viable SolutionAdverse Selection Death Spiral?
36
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22
National Health Care Expenditures as a Share of GDP, 1965 – 2022F*
Sources: Centers for Medicare & Medicaid Services, Office of the Actuary at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html accessed 3/14/14; Insurance Information Institute.
1965 5.8%
Health care expenditures as a share of GDP rose from 5.8% in 1965 to 18.0% in 2013 and are expected to
reach 19.9% of GDP by 2022
% of GDP
2022 19.9%
1980: 9.2%
1990: 12.5%
2000: 13.8%
2010: 17.9%
Since 2009, heath expenditures as a %
of GDP have flattened out at about 18%--the
question is why and will it last?
NOTE: All plans are offered through BC/BS of SC, the only exchange insurer in SC.Source: SC DOI: http://doi.sc.gov/DocumentCenter/View/10319 accessed 9/26/17.
Example of Health Insurance Exchange Monthly Premiums in SC from HealthCare.gov25-Year Old Single Adult, No Tobacco Use
Average Silver Plan monthly premium in 2018 for 25-yr. old
single adult will rise by 33.7%, to $446.15 from $333.67.60-Year Old Single Adult, No Tobacco Use
Silver Plan for a 60-yr. old single adult will rise by 33.7%, to $1,206.03 from $901.97.
Source: Center for Medicare and Medicaid Services: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/2017-09-13-Issuer-County-Map.pdf as of 9/13/17.
Number of ACA Exchange Insurers by County for 2018
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Claim Trends in SC Private Passenger Auto Insurance
Rising Frequencies and Severities in Many Coverages
Will that Pattern Be Sustained?
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SC Coverage: Collision Severity Is Sharply Higher in Recent Years*
0.2%
6.1%
3.2%
1.5%
6.3%
0.0%
5.7% 5.9%
5.0%
-0.2
%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2013 2014 2015 2016 2017*
Severity FrequencyAnnual Change, 2013 through 2017*
Improving Economy, Distracted Driving, DUI Are Just a Few of the Numerous Factors Pushing Collision Claim Severity Higher
*2017 data are for the 4 quarters ending March 31, 2017.Source: ISO/PCI Fast Track data; Insurance Information Institute
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SC Coverage: BI Severity & Frequency Trends Are Both Higher in Recent Years*
0.9%
-1.8
%
3.6%
6.9%
3.9%
2.5%
8.3%
2.9%
5.1%
7.7%
-4%
-2%
0%
2%
4%
6%
8%
10%
2013 2014 2015 2016 2017*
Severity Frequency
Annual Change, 2013 through 2017*
Improving Economy, Distracted Driving, DUI Are Just a Few of the Numerous Factors Pushing Bodily Injury Claim Frequency and
Severity Higher*2017 data are for the 4 quarters ending March 31, 2017.Source: ISO/PCI Fast Track data; Insurance Information Institute
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USC’s Inaugural RMI Newsletter(http://us16.campaign-archive1.com/?u=de4d9fc579ae40ab21b8a5d36&id=28137b2148)
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Thank you for your timeand your attention!
Twitter: twitter.com/bob_hartwigFor a copy of this presentation, email me at [email protected]
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