WHEN WORKERS’ COMPENSATION & AUTO LIABILITY COLLIDE

5 things every insurer needs to know.

Economic Recovery

+

=Low Gas Prices

More Vehicle Miles Traveled (VMT)

PEOPLE ARE DRIVING MORE MILES.

Sources: http://www.verisk.com/verisk-review/summer-2016/auto-claims-frequency-severity-what-s-behind-the-rise.html; U.S. Federal Highway Administration, Total Vehicle Miles Traveled, Moving 4-Quarter Average, Vehicle Miles Driven Represented in Trillions(T); Texas A&M University study, “Traffic Gridlock Sets New Records for Traveler,” INRIX, 8/26/15; CNN Money; U.S. Energy Information Administration

2.94T

2.96T

2.98T

3.00T

3.02T

3.04T

3.06T

3.08T

3.10T

3.12T

3.14T

Q1 Q2 Q3 Q4

2006

Q1 Q2 Q3 Q4

2007

Q1 Q2 Q3 Q4

2008

Q1 Q2 Q3 Q4

2009

Q1 Q2 Q3 Q4

2010

Q1 Q2 Q3 Q4

2011

Q1 Q2 Q3 Q4

2012

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1

2016

MIL

ES D

RIV

EN (4

-QU

AR

TER

RO

LLIN

G A

VER

AG

E)TOTAL VEHICLE MILES TRAVELED (VMT) USA

VMT increased 3% in 2015, which is above the 37-year average of 2.5% (1990 – 2007)

Up 6.7% since 2012

Gas prices high / Stocks down

Economic Recession

Your employees may be careful drivers, but is the teen in the next lane?

DISTRACTED DRIVING IS ON THE RISE.

Sources: National Safety Council; Property Casualty 360

DISTRACTED DRIVING:

Teen Crashes All Crashes

60% 25%

Sources: AAA Foundation for Traffic Safety, “2015 Traffic Survey Culture Index,” February 2016; http://www.verisk.com/verisk-review/summer-2016/auto-claims-frequency-severity-what-s-behind-the-rise.html

70%

42%

32%

31%

12%

8%

Talking while driving

Anytime

Often/Regularly

Reading texts or emails while driving

Sending messages while driving

RISE IN SMARTPHONE USE CAN BE LINKED TO THE RISE IN AUTO CLAIMS

DUI doesn't just mean alcohol.

DRIVING WHILE DRUGGED OR DROWSY IS AS BAD AS DRIVING DRUNK.

Source: Governors Highway Safety Study

DRUGGED DRIVING:

After fatal accidents, tests have shown more drivers were drugged than drunk!

42% 37%

Sources: Optum Workers’ Comp and Auto No-Fault Solutions, 2017; http://www.asam.org/docs/default-source/advocacy/opioid-addiction-disease-facts-figures.pdf; IMS, National Prescription Audit (NPATM), 2012; http://www.narconon.org/blog/heroin-addiction/5-reasons-prescription-addiction-turns-to-heroin; medicalmarijuana.procon.org; AAA Foundation

DRUGGED DRIVING:

Workers’ Comp prescriptions are going down while

Auto No-Fault prescriptions are going up 2X.

Heroin is cheaper than prescription opioids –

a reason some opioid users turn to it.

29 states have legalized medical

marijuana.

Fatal crashes are 2X more likely from legal marijuana –

Marijuana with opioids presents an even greater risk.

More than 250M prescriptions annually

in the U.S.

80% of the world’s opioid prescriptions

are in the U.S.

Prescription

Sources: http://dui.drivinglaws.org/drink-table.php; AAA Foundation

DROWSY DRIVING:

CAUTION for night-shift workers, first-responders, doctors, nurses and truck drivers:

31% OF DRIVERS admit recently driving when they “could not keep their eyes open.”

STOPDriving after 24 hours without sleep mimics blood alcohol level of 0.1%.

It's like having 4-7 drinks!

For each 5 mph increase in a state's speed limit, accident fatalities increase 4%.

20 states have increased their maximum speed limits since 2010.

HIGHER SPEED LIMITS DON’T HELP.

Source: Insurance Institute for Highway Safety

85 mph

80 mph

MT

SD

TX

IDWY

UT

NV

Source: AAA Foundation for Traffic Safety, “2015 Traffic Survey Culture Index,” February 2016

TOP SPEED LIMITS

Source: AAA Foundation for Traffic Safety, “2015 Traffic Survey Culture Index,” February 2016

DRIVERS ADMITTING TO RECENTLY DRIVING ON A FREEWAY 15 MPH OVER SPEED LIMIT:

Often/RegularlyAnytime

15%48%

In Commercial Auto, 10 states have 62% higher loss ratios than states with the best loss ratios.

SOME STATES HAVE WORSE LOSS RATIOS THAN OTHERS.

70.5%

43.6%

AVG. LOSS RATIO

Worst 10 States

AVG. LOSS RATIO

Best 10 States

Source: http://www.naic.org/documents/cipr_events_safety_landscape_pres.pdf

62%gap

Alabama

Michigan

Florida

New York

Delaware

New Jersey

Georgia

Nevada

Louisiana

Texas

Sources: PCI, Fast Track Monitoring System, 4Q 2015; PCI and American Trucking Research Institute, “The Changing Auto Safety Landscape,” NAIC CIPR, 2016; PCI, Fast Track Monitoring, 4Q 2016

Best Performing

Worst Performing by Loss Ratio

MT

NEIA

MNVT

OR

WY

AK

HI

D.C.

NJ

DENV

LATX

GAAL

FL

MINY

Source: https://www.titlemax.com/media/worst-traffic-congestion.jpg

Alabama

Michigan

Florida

New York

Delaware

New Jersey

Georgia

Nevada

Louisiana

Texas

5 OF THOSE WORST PERFORMING STATES HAVE THE MOST CONGESTED TRAFFIC.

Impacting Personal Auto too!

MINY

TX

GA

FL

Source: PCI, Fast Track Monitoring System, 4Q 2015

5 OF THOSE SAME STATES HAVE SEEN INCREASED AUTO ACCIDENTS.

Alabama

Michigan

Florida

New York

Delaware

New Jersey

Georgia

Nevada

Louisiana

Texas

NV

LATX

GA

FL

/in/dianedbrown9

ddbrown@genre.com

Casualty Business Development Specialist

INSURERS NEED TO WATCH THE ROAD FOR WAYS TO REDUCE AUTO CRASH FREQUENCY AND SEVERITY AFFECTING WORKERS’ COMPENSATION.

© 2017 General Re Corporation. This presentation is based on Gen Re’s understanding of a number of external sources. It is intended to provide background information for our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.

Diane Brown Call us+1 203 328 5456

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