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P/C Industry Overview and Outlook
Buckeye Actuarial Continuing Education
October 19, 2018
James Lynch, FCAS MAAA, chief actuary
Insurance Information Institute 110 William Street New York, NY 10038 212.346.5533 [email protected] www.iii.org
2
I.I.I. Mission Statement
Improving public understanding of insurance...
…what it does and how it works
2
3
10 Key Ways Insurance Drives Economic Growth
Economic/Financial Stability
3. Insurers are capital protectors
5. Insurance sustains the supply chain
4. Insurance is a partner in social policy
6. Insurers are capital infusers
1. Insurers are financial first responders
2. Insurers are risk mitigators
Safety/Security
Development
10. Insurers are credit facilitators
7. Insurers are community builders
8. Insurance enables infrastructure improvements
9. Insurers are innovation catalysts
Financial Results
Light, Favorable Winds Buoy Results
5
11.3%
5.4%
-6%
-3%
0%
3%
6%
9%
12%
08 09 10 11 12 13 14 15 16 17 18
NPW Growth Nominal GDP Growth
Net Premium Growth, Annual Change
All data through second quarter.
SOURCES: NAIC data sourced through S&P Global Intelligence, Bureau of Economic Affairs, Insurance Information Institute.
The tax reform act at the end of 2017 led to the spike in net written premium
in 2018 - $314B at Second Quarter.
As a general rule, net written premium growth tracks nominal GDP growth.
6
5.8%5.4%
-4%
-2%
0%
2%
4%
6%
08 09 10 11 12 13 14 15 16 17 18
NPW Growth GDP Growth
Direct Premium Growth, Annual Change
All data through second quarter.
SOURCES:NAIC data sourced through S&P Global Intelligence, Bureau of Economic Affairs, Insurance Information Institute.
Rising Auto Rates Driving Premium Growth - $337B at Second Quarter.
7
Net Underwriting Gains & Losses,1st Halves of Each Year, 2007-2018
Sources: ISO/PCI; Insurance Information Institute.
$17,000
-$6,300
-$2,500
-$5,700
-$26,100
-$7,500
$2,400
$300
$3,500
-$1,500-$4,500
$6,000
-$29,000
-$25,000
-$21,000
-$17,000
-$13,000
-$9,000
-$5,000
-$1,000
$3,000
$7,000
$11,000
$15,000
$19,000
07 08 09 10 11 12 13 14 15 16 17 18
Low Cats in First Half of Year Helped 2017 Result.
$ Millions
Second-highest first-half U/W gains in last
dozen years
8
4.44
4.03
4.59 4.50 4.494.20
3.933.73 3.83
3.683.43
3.64
3.18 3.04 3.02
0%
1%
2%
3%
4%
5%
6%
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
P/C Insurer Portfolio Yields,2002-2017
Sources: NAIC data, sourced from S&P Global Market Intelligence; Insurance Information Institute.
Even as Prevailing Rates Rise in the Next Few Years, Portfolio Yields Are Unlikely to Rise Quickly,
Since Low Yields of Recent Years Are “Baked In” to Future Returns.
Net Yield on Invested Assets for 2018:1st quarter: 2.93%2nd quarter: 3.66%
9
Net Investment Gains Vary Mainly With Realized Capital Gains/Losses, 1st Halves, 2007-2018
Sources: ISO/PCI; Insurance Information Institute.
$31.0$29.0
$26.9 $26.6 $27.0 $25.3 $24.4 $23.7 $24.1 $22.6 $23.4$26.8
$5.0
-$1.2
-$12.8
$2.5$3.9
$1.8 $4.1$7.4
$3.5$4.5 $3.6
$5.4
-$13
-$10
-$7
-$4
-$1
$2
$5
$8
$11
$14
$17
$20
$23
$26
$29
$32
$35
07 08 09 10 11 12 13 14 15 16 17 18
net investment income realized capital gains/losses
In the first half of the year, net investment income has been steady but realized capital gains/losses have been variable.
$ Billions
10
P/C Industry Net Income After Taxes*,1st Halves, 2007-2018
*adjusted for inflation using the BLS CPI calculator, to 2018 dollarsSources: ISO, a Verisk Analytics company; Insurance Information Institute.
$44.3
$18.0
$7.7
$21.5
$5.8
$19.3
$27.2$28.3
$33.7
$23.0
$16.0
$34.0
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
07 08 09 10 11 12 13 14 15 16 17 18
In the first half of the year, net income varied considerably.
$ Billions, 2018 dollars
2018:1H was the second-highest first-half profit in
the last dozen years.
11
P/C Insurance Industry Combined Ratio*
Through Q2.
*Excludes Mortgage & Financial Guaranty insurers 2008-2014.Including M&FG, 2008=105.1, 2009=100.7, 2010=102.4, 2011=108.1; 2012:=103.2; 2013: = 96.1; 2014: = 97.0.
Sources: A.M. Best; ISO, a Verisk Analytics company; I.I.I. projection for 2018.
110.1
115.8
107.5
100.1
98.4
100.8
92.6
95.7
101
99.3
101.1
106.5
102.5
96.4 97.097.8
100.7
103.7
96.4
100.1
90
100
110
120
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 todate
18P
Hurricanes, Wildfires Drive CR Higher.
Best Combined
Ratio Since 1949 (87.6)
Higher CAT Losses, Shrinking Reserve Releases, Toll of
Soft Market
Sandy
3 Consecutive Years of U/W Profits; 1st time
since 1971-73
12
12
Policyholder Surplus By Quarter
Amount of Surplus Change from Prior Quarter
Sources: ISO, A.M .Best.
($ Billions)
749
761
$400
$500
$600
$700
$800
09
:Q2
10
:Q1
10
:Q4
11
:Q3
12
:Q2
13
:Q1
13
:Q4
14
:Q3
15
:Q2
16
:Q1
16
:Q4
17
:Q3
18
:Q2
Tax Law Increased Surplus at Year-End 2017 and Makes Surplus Growth a Bit More Volatile. $1.30 Surplus per $1 Premium.
-0.4%
1.6%
-2%
-1%
0%
1%
2%
3%
4%
5%
15
:Q2
15
:Q3
15
:Q4
16
:Q1
16:Q
2
16
:Q3
16
:Q4
17
:Q1
17
:Q2
17
:Q3
17
:Q4
18
:Q1
18
:Q2
Ohio Results
An Industry Prospers
14
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. All Lines OH All Lines
RNW All Lines: OH vs. U.S., 2007–2016
Source: NAIC.
P/C Insurer Profitability in OH is Above That of the U.S. Overall Over the Past Decade
U.S.: 7.1%OH: 9.6%
15
0%
2%
4%
6%
8%
10%
12%
14%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. PP Auto OH PP Auto
RNW PP Auto: OH vs. U.S., 2007–2016
Source: NAIC.
Average 2007–2016
U.S.: 4.2%OH: 8.1%
16
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. Comm Auto OH Comm Auto
RNW Comm. Auto: OH vs. U.S., 2007–2016
Source: NAIC.
Average 2007–2016
U.S.: 5.6%OH: 11.4%
17
All Lines: 10-Year Average RNW OH and Nearby States, 2007–2016
Sources: NAIC, Insurance Information Institute.
2.6%
5.1%
6.8%
7.1%
7.3%
9.6%
0% 2% 4% 6% 8% 10% 12%
Michigan
Kentucky
Pennsylvania
U.S.
Indiana
Ohio
Ohio All Lines Profitability is Above the U.S. Average and
Regional Average (6.3%)
18
PP Auto: 10-Year Average RNW OH and Nearby States, 2007–2016
Sources: NAIC, Insurance Information Institute.
-3.0%
2.5%
4.2%
5.8%
6.3%
8.1%
-4% -2% 0% 2% 4% 6% 8% 10%
Michigan
Kentucky
U.S.
Pennsylvania
Indiana
Ohio
Ohio PP Auto Profitability is Above the U.S. and
Regional Average (3.9%)
19
Top Ten Most Expensive and Least Expensive States for Automobile Insurance, 20151
1Based on average automobile insurance expenditures.
Source: © 2017 National Association of Insurance Commissioners.
RankMost
Expensive StatesAverage
Expenditure RankLeast
Expensive StatesAverage
Expenditure
1New Jersey $1,265.69
1Idaho $573.83
2New York 1,234.84
2Iowa 599.03
3Louisiana 1,231.77
3South Dakota 615.78
4Michigan 1,231.39
4Maine 617.73
5D.C. 1,190.39
5North Dakota 637.54
6Florida 1,185.25
6North Carolina 655.37
7Rhode Island 1,147.95
7Wyoming 656.64
8Delaware 1,145.66
8Wisconsin 664.81
9Massachusetts 1,058.50
9Indiana 666.24
10Connecticut 1,048.56
10Vermont 680.18
Ohio Ranked 38th in Average Expenditure for Auto Insurance in 2015. The Average Expenditure was $702.59.
20
Comm. Auto: 10-Year Average RNW OH and Nearby States, 2007–2016
Sources: NAIC, Insurance Information Institute.
2.3%
4.2%
5.6%
7.0%
7.0%
11.4%
0% 2% 4% 6% 8% 10% 12%
Michigan
Kentucky
U.S.
Indiana
Pennsylvania
Ohio
Ohio Comm. Auto Profitability is Above the U.S. and Regional
Average (6.4%)
21
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. DWP: All Lines
OH DWP: All Lines
All Lines DWP Growth: OH vs. U.S.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Average 2008–2017
U.S.: 2.5%
OH: 2.3%
22
-2%
0%
2%
4%
6%
8%
10%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. DWP: PP Auto
OH DWP: PP Auto
Private Passenger Auto DWP Growth: OH vs. U.S.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Average 2008–2017
U.S.: 3.6%
OH: 2.8%
23
-15%
-10%
-5%
0%
5%
10%
15%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. DWP: Comm Auto
OH DWP: Comm Auto
Commercial Auto DWP Growth: OH vs. U.S.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
Average 2008–2017
U.S.: 2.4%
OH: 1.8%
2017:Q4 Scuttlebutt
Is a hard market coming?
25
Three Hard Markets in the Last 45 Years
Sources: A.M. Best (1971-2017), ISO (2014-16), A.M. Best, Insurance Information Institute (1986-1994); U.S. Commerce Dept., Bureau of Economic Analysis; Insurance Information Institute calculations.
-10%
-5%
0%
5%
10%
15%
20%
71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15
1.1%
10.7%
16.6%
12.0%
Net Premium Growth (All P/C Lines) Minus Nominal GDP, Annual Change
The three “hard markets” in this 45-year span were in 1976–77, 1985–86, and 2001–03.
27
I.I.I. Hypothesis What causes a hard market?
Return on equity falls to 4% or below?
Surplus drops due to financial market declines and/or significant underwriting losses?
Unusually large losses due to catastrophes?
28
P/C Industry ROE and Hard Markets
Year ROENWP-GDP Growth in
Following YearHard
Market?
1975 2.4% 10.7% Yes
1984 1.8% 14.6% Yes
2001 -1.2% 12.0% Yes
2002 2.1% 5.1% Yes
2017 5.0% 0.4%* No
* Direct Written Premium – GDP Growth through Second Quarter
29
Policyholder Surplus and Hard Markets
YearSurplus Decline
NWP-GDP Growth in Following Year
Hard Market?
1984 -2.7% 14.6% Yes
1999 -0.9% -1.5% No
2000 -4.7% 5.1% Yes
2001 -8.0% 12.0% Yes
2008 -12.5% -2.2% No
2011 -0.8% 0.2% No
2017 +7.4% 0.4% No
* Direct Written Premium – GDP Growth through Second Quarter
30
CAT Claims and Hard Markets
YearCAT Claims Over
$25 billion (2016 Adjusted)
NWP-GDP Growth in Following Year
Hard Market?
1992 $39.6 0.9% No
1994 $27.7 -1.2% No
2001 $36.4 12.0% Yes
2004 $36.4 -6.2% No
2005 $77.1 -3.1% No
2008 $30.7 -2.2% No
2011 $35.2 0.2% No
2012 $36.8 1.3% No
2017 $90.5 0.4% No
31
Hard Market in 2018?
Strong indicator: ≤ 4% ROE
Consistent hard markets in years comparisons.
Indifferent indicator: Surplus Increase/Decrease
Inconsistent hard/soft markets in years comparisons.
Weak indicator: Large Cat Losses
Consistent non-movement.
Commercial Rate Changes
Commercial Auto . . . And Everything Else
33
Rate Changes Worldwide
Sources: Marsh Insurance Market Index, JLT Re.
Global Insurance Rates Through Q2 2018
Global Reinsurance January Renewals
-12.0%-11.0%
-8.2%
-5.7%
4.8%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
2014 2015 2016 2017 2018
1%
-5%
-2%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
20
12
:Q2
20
13
:Q2
20
14
:Q2
20
15
:Q2
20
16
:Q2
20
17
:Q2
20
18
:Q2
Rates Soft/Flat, Especially in Reinsurance
1%Rates Worldwide Increasing a Bit
(Australia)
34
Liability Rate Changes
Slight Softening, Though Local Markets Vary
SOURCE: Marsh Insurance Market Index.
U.S. Casualty U.S. Financial and Prof Liab
2.6%
-2.4%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0% 2.7%
0.9%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
35
Property/Cyber Rate Changes
A Flat Market, Though Local Markets Vary
SOURCE: Marsh Insurance Market Index.
U.S. Property U.S. Cyber
3.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
20.0%
2.1%
-5.0%
5.0%
15.0%
25.0%
36
Commercial Lines Rate Change
Sources: Willis Towers Watson, MarketScout.
‘Material’ Increases in Auto, Property, Umbrella; Q2 Increases > Q1 Increases
-16%
5%
MarketScout
-4%
2.5%
-6%
7%
Willis
3%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
37
Commercial Property Rate Change (vs. Year Earlier)
Sources: MarketScout, Insurance Information Institute..
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Ma
r-0
9
Ju
n-0
9
Se
p-0
9
De
c-0
9
Ma
r-1
0
Jun-1
0
Se
p-1
0
De
c-1
0
Ma
r-1
1
Ju
n-1
1
Se
p-1
1
De
c-1
1
Mar-
12
Ju
n-1
2
Se
p-1
2
De
c-1
2
Ma
r-1
3
Ju
n-1
3
Se
p-1
3
Dec-1
3
Ma
r-1
4
Ju
n-1
4
Se
p-1
4
De
c-1
4
Ma
r-1
5
Ju
n-1
5
Sep-1
5
15-D
ec
16-M
ar
16-J
un
16-S
ep
16-D
ec
17-M
ar
17-J
un
17-S
ep
17-D
ec
18-M
ar
18-J
un
18-S
ep
Sep-183%
Property Rates Closely Following Loss Experience, Especially in Catastrophe Prone Areas.
Mar-09-8%
Sep-126%
4 Years of Rates 0%
43
Commercial Auto Rate Change (vs. Year Earlier)
-4 -4
-3 -3
-2
-3
-1
-2
-1 -1
0
1
4
5
6
5
6
5
4 4
3
2
1 1
2 2
0
-1
2
3 3 3
4
5 5 5
6 6
-6%
-4%
-2%
0%
2%
4%
6%
8%
Ju
n-0
9
Se
p-0
9
De
c-0
9
Ma
r-1
0
Ju
n-1
0
Se
p-1
0
De
c-1
0
Ma
r-1
1
Ju
n-1
1
Se
p-1
1
De
c-1
1
Ma
r-1
2
Ju
n-1
2
Se
p-1
2
De
c-1
2
Ma
r-1
3
Ju
n-1
3
Se
p-1
3
De
c-1
3
Ma
r-1
4
Ju
n-1
4
Se
p-1
4
De
c-1
4
Mar-
15
Ju
n-1
5
Se
p-1
5
15-D
ec
16
-Ma
r
16-J
un
16-S
ep
16-D
ec
17
-Ma
r
17-J
un
17-S
ep
17-D
ec
18
-Ma
r
18-J
un
18-S
ep
Sources: MarketScout, Insurance Information Institute.
44
Workers Comp Rate Change (vs. Year Earlier)
Sources: MarketScout, Insurance Information Institute.
-9
-7
-9
-6
-7
-4 -4
-3 -3
-2
-3
-1
-2
-1 -1
0
1
4
5
6
5
6
5
4 4
3
2
0 0
1
0
-4
-2
-1 -1
-2 -2 -2 -2 -2 -2
-3 -3
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Ma
r-0
8
Ju
n-0
8
Se
p-0
8
De
c-0
8
Ma
r-0
9
Ju
n-0
9
Sep-0
9
De
c-0
9
Ma
r-1
0
Ju
n-1
0
Se
p-1
0
De
c-1
0
Ma
r-1
1
Ju
n-1
1
Se
p-1
1
De
c-1
1
Ma
r-1
2
Ju
n-1
2
Se
p-1
2
De
c-1
2
Ma
r-1
3
Ju
n-1
3
Se
p-1
3
De
c-1
3
Ma
r-1
4
Ju
n-1
4
Se
p-1
4
De
c-1
4
Ma
r-1
5
Ju
n-1
5
Se
p-1
5
De
c-1
5
Ma
r-1
6
Ju
n-1
6
16-S
ep
16-D
ec
17-M
ar
17-J
un
17-S
ep
17-D
ec
18-M
ar
18-J
un
18-S
ep
Stellar Results Have Created a Soft Market.
Economic Outlook
The Strength of the EconomyWill Influence the Insurance Environment
53
3.2
1.7
0.5
0.5
3.6
0.5
3.2
3.2
-1.0
5.1
4.9
1.9
3.3
3.3
1.0
0.4
1.5
2.3
1.9
1.8
1.8
3.0
2.8
2.3
2.2
4.2
4.1
-1%
0%
1%
2%
3%
4%
5%
6%
12:1
Q
12:3
Q
13:1
Q
13:3
Q
14:1
Q
14:3
Q
15:1
Q
15:3
Q
16:1
Q
16:3
Q
17:1
Q
17:3
Q
18:1
Q
18:3
Q*
Rea
l G
DP
Gro
wth
U.S. Post-Recession Real GDP Growth,** Quarterly
*GDPnow estimate **Percent change from previous quarter, seasonally-adjusted at an annual rateSources: U.S. Department of Commerce; Insurance Information Institute.
Since the start of 2012, the economy (as measured by real GDP)grew 3% or faster (at an annual rate) in a calendar quarter
only 10 times in 22 quarters. But twice in the last 5.
The start of sustained
3+% growth?
54
Quarterly U.S. Real GDP Growth: Forecasts
Sources: Blue Chip Economic Indicators, September 2018 issue; Insurance Information Institute.
2.8%
2.4%2.5%
2.2%
2.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2018:Q4 2019:Q1 2019:Q2 2019:Q3 2019:Q4
As Interest Rates Rise, Most Economists Forecast Slower Growth.
5555
Length of US Business Cycles, 1960–Present*
8
19
106
36
58
12
92
120
73
112
10 1116
6
16
8
0
10
20
30
40
50
60
70
80
90
100
110
120
Apr 1960 Dec 1969 Nov 1973 Jan 1980 Jul 1981 Jul 1990 Mar 2001 Dec 2007
Month Recession Started
Contraction
Expansion Following
*Through October 2018; June 2009 was the “official” end of recession.
Sources: National Bureau of Economic Research; Insurance Information Institute.
Duration (Months)
The length of the expansions greatly exceedsthe length of contractions (recessions).
56
State-by-State Leading Indicatorsthrough February 2019
Sources: Federal Reserve Bank of Philadelphia at www.philadelphiafed.org/index.cfm , released October 4, 2018; Next release is November 5, 2018; Insurance Information Institute.
Near-term
growth forecasts
vary widely by
state.
Strongest
growth
= dark green
(1.5%-4.5%);
then light green;
then gray;
weakest = beige
(-1.5% to -4.5%)
4.281.58
1.55
1.603.55
4.36
3.903.57
2.622.241.50
1.69
1.77
3.89
3.433.41
1.90
2.15
2.47
2.20
1.87
3.252.811.72
5858
US Treasury Note 10-Year Yields*:Is the long downward trend over?
*Monthly, constant maturity, nominal rates, through August 2018.
Sources: Federal Reserve Bank at http://www.federalreserve.gov/releases/h15/data.htm; National Bureau of Economic Research (recession dates); Insurance Information Institute.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Recession
10-Yr Yield
Since nearly 50% of P/C bond/cash investments are in 5-year or longer maturities, most P/C insurer portfolios will have low-yielding bonds for years to come.
58
Yields on 10-Year US Treasury Notes
have been below 3% for over 7 years:
10-year bonds bought in 2008 at over
3% will be reinvested today at 2.9%
for 10 more years
59
September 2018: Quarterly Yield Forecastsfor 10-Year US Treasury Bonds in 2018-19
3.1
3.2
3.3
3.4 3.4
2.9
3
3.1
3.2
3.3
3.4
3.5
2018:Q4 2019:Q1 2019:Q2 2019:Q3 2019:Q4
59
Yield (%)
Many of the 53 forecasts in the Blue Chip survey expectcontinual increases in the yield of 10-year T-bonds in 2018-19.
Sources: Blue Chip Economic Indicators (9/18); Insurance Information Institute
Yield as of 10/17: 3.21%
Cannabis and Insurance
A Sensitive Issue
61
1969, 12
1977, 28
1995, 23
2009, 44
2017, 64
0
10
20
30
40
50
60
70
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
20
05
20
09
20
13
20
17
% Saying Yes
No survey in years where no data appears.
SOURCES: Gallup Poll Social Series, http://news.gallup.com/file/poll/221027/171025Marijuana.pdf.
Support for Legalization Grows
“Do You Think the Use of Marijuana Should Be Made Legal, Or Not?”
62
54
Democrats 72
49Independents
67
28
Republicans
51
20
30
40
50
60
70
80
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Democrats Independents Republicans
% Saying Yes
SOURCES: Gallup Poll Social Series, http://news.gallup.com/poll/221018/record-high-support-legalizing-marijuana.aspx
Support for Legalization Grows
“Do You Think the Use of Marijuana Should Be Made Legal, Or Not?”
63
Cannabis in the USA
Legalization is Accelerating
SOURCE: National Journal.
Congressional Cannabis Caucus
Rohrbacher(CA)
Bluemenauer(OR)
Young (AK)
Polis (CO)
64
The Science of Weed
SOURCE: National Academy of Sciences, https://www.nap.edu/catalog/24625/the-health-effects-of-cannabis-and-cannabinoids-the-current-state
Conclusive evidence
Improves the lot of adults in
chronic pain.
Substantial evidence
Increases the risk of motor vehicle crashes.
What the Experts Say
65
Cannabis as Medicine
Treatments for Occupational-Related Conditions
Source: David Dietz, “Medical Marijuana, Occupational Injuries, and the Workplace: 2017 Status Update,” https://www.ncci.com/Articles/Pages/II_Insights_MedMarijuana-OccupInjuries.aspx
Work-Related Conditions Cannabis vs. Opioids
Chronic Pain
Anxiety and Depression
PTSD
Traumatic Brain Injury
Spasticity Following Spinal Cord Injury
‘Highly suggestive studies’
Death Certificate Study
Dispensaries Study
Medicare/Medicaid Study
Auto Fatality Study
Not conclusive – Further Study Needed
66
Road Safety
Source: Insurance Information Institute research.
Distracted driving
Faster driving
Economic well-being
Legalized marijuana
Expensive auto parts
Safety Devices Can Be
Expensive
Better Economy = More Drivers
= More Accidents
14 Percent of Injury Crashes
Speed
Still
Kills
It’s Not Funny
Why rates go up
67
Accident Probability
SOURCE: Sewell, Poling, Sofuoglu, “The Effect of Cannabis Compared with Alcohol on Driving,” American Journal on Addictions, 2009.
Chance of Accident Rises Sharply As Consumption Rises.
68
Legal Sales Lead to More Accidents
SOURCE: Highway Loss Data Institute.
14.0
6.2
4.5
3.0
0
4
8
12
16
CO WA OR Overall
Percent Change in Collision Frequency, 2012-2016*
* Vs. Neighboring States.
Look at ‘Real World’ Crashes
All Measures Statistically Significant
‘Overall’ Measure a Good Proxy for What Will Happen in Any State
Auto Accidents are 6% of WC claims; 12% of Losses
70
Blood Levels vs. Intoxication
BAC and ‘feeling drunk’ rise and fall in lockstep
SOURCE: Sewell, Poling, Sofuoglu, “The Effect of Cannabis Compared with Alcohol on Driving,” American Journal on Addictions, 2009.
THC levels in blood and ‘feeling high’ rise and fall at different rates
It Is Difficult to Use Blood Test to Measure Whether Someone is High.
71
State of the Debate
Lots of Questions
Source: NCCI, “The Marijuana Conversation: Questions Workers Compensation Insurers Are Asking; Questions Employers Are Asking; Questions Legislators and Regulators Are Asking,”
Insurers Are Asking Employers Are Asking
Regulators Are Asking Legislators Are Asking
Will Schedule I Status Change?
Is Medical Marijuana Covered?
Does WC Cover a High Worker?
Is Drug-Free Workplace Affected?
How Can Reimbursement Be Handled?
Can Worker Rights, Employer Needs Be Balanced?
What Are the Key Issues in the Debate?
If We Legalize, What Will Feds Do?
Questions?
Thank you!
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