Today, as part of the U.S. Department of Transportation’s efforts to increase roadway safety and encourage innovation, the National Highway Traffic Safety Administration published the initial round of data it has collected through its Standing General Order issued last year and initial accompanying reports summarizing this data.
The SAE Level 2 advanced driver assistance systems summary report is available here, while the SAE Levels 3-5 automated driving systems summary report is available here. Going forward, NHTSA will release data updates monthly.
These data reflect a set of crashes that automakers and operators reported to NHTSA from the time the Standing General Order was issued last June. While not comprehensive, the data are important and provide NHTSA with immediate information about crashes that occur with vehicles that have various levels of automated systems deployed at least 30 seconds before the crash occurred.
“The data released today are part of our commitment to transparency, accountability and public safety,” said Dr. Steven Cliff, NHTSA’s Administrator. “New vehicle technologies have the potential to help prevent crashes, reduce crash severity and save lives, and the Department is interested in fostering technologies that are proven to do so; collecting this data is an important step in that effort. As we gather more data, NHTSA will be able to better identify any emerging risks or trends and learn more about how these technologies are performing in the real world.”
High levels of Covid-19 deaths hurt fourth-quarter results in MetLife Inc.’s business of providing employer-sponsored life insurance as the Delta variant persisted in the U.S., but the outsize payouts were more than offset by unusually strong investment gains.
The New York company’s net income soared to $1.18 billion, compared with a year-earlier period that had been hurt by mark-to-market losses on financial hedges that aim to protect against falling interest rates. MetLife’s adjusted earnings, which analysts track as a measure of recurring profitability, were flat at $1.84 billion.
Another household-name insurer, Allstate Corp., reported a 70% drop in net income to $790 million, and a 50% decline in adjusted net income to $796 million, primarily driven by worsened car-insurance underwriting income. Accident volume increased on more-crowded roads, and inflation pushed repair costs higher.
Catastrophe costs were also higher. U.S. property insurers ended the year with two high-profile catastrophes: deadly tornadoes in and around Kentucky, and devastating wildfire between Denver and Boulder, Colo.
Second, one of the key drivers of these stable and low benefit ratios has been steady-to-declining rates of claims incidence. In a recent paper published by the SOA and co‑authored by Gen Re’s Jay Barriss, Individual Disability incidence rates were shown to have steadily improved over the 2005 to 2015 period, relative to the latest Individual Disability Valuation Table (IDIVT) incidence rate expectations.10 The favorable incidence rate trends have likely continued into at least into 2020 as Gen Re analysis on our reinsured blocks of disability business show continuing-to-stable incidence trends since 2015.
Theoretically, wealthier people should buy less insurance, and should self-insure through saving instead, as insurance entails monitoring costs. Here, we use administrative data for 63,000 individuals and, contrary to theory, find that the wealthier have better life and property insurance coverage. Wealth-related differences in background risk, legal risk, liquidity constraints, financial literacy, and pricing explain only a small fraction of the positive wealth-insurance correlation. This puzzling correlation persists in individual fixed-effects models estimated using 2,500,000 person-month observations. The fact that the less wealthy have less coverage, though intuitively they benefit more from insurance, might increase financial health disparities among households.
Insurance is a peculiar business because customers don’t really want it, hence the adage, “insurance is sold, not bought.” As much as she’s a customer, she’s also a counterparty: what’s good for her (a claim) is not good for the company. There’s a zero-sum dynamic to the relationship, which means that the classic Amazon flywheel around customer experience and lower pricing doesn’t work.
This concept got Lemonade tied up in knots this week. In a series of tweets, the company told of how its platform is getting better at “delighting customers”. One way it does this is, “when a user files a claim, they record a video on their phone and explain what happened. Our AI carefully analyses these videos for signs of fraud. It can pick up non-verbal cues that traditional insurers can’t, since they don’t use a digital claims process.”
It seems a strange way to “delight” customers by allowing AI to auto-reject their claims based on how their face looks or their accent sounds. The company realized its (PR) error, deleted the tweets and issued a denial. But this is what happens when your customers and your shareholders start mixing in an industry that doesn’t lend itself very well to that.
Younger, populist, anti-corporate juries are more prone to make larger awards than baby boomer jury pools. Plaintiff attorneys making good use of the “reptile theory” to provoke jurors to punish defendants painted as dangerous to society have led to staggeringly large verdicts. The combined impact of these trends has led to more and larger lawsuits, as well as year-over-year increases in “nuclear verdicts” — verdicts in excess of $10 million.
Some elements of the COVID-19 litigation torrent fit squarely in Buffet’s meaning of social inflation: expansion of what insurance policies cover. To be sure, the plurality of the 10,000 coronavirus suits filed involve insurance coverage litigation, with plaintiffs seeking coverage for business losses in policies where insurers maintain coverage does not exist.
On Jan. 27, 1986, Allan McDonald stood on the cusp of history.
McDonald directed the booster rocket project at NASA contractor Morton Thiokol. He was responsible for the two massive rockets, filled with explosive fuel, that lifted space shuttles skyward. He was at the Kennedy Space Center in Florida for the launch of the Challenger “to approve or disapprove a launch if something came up,” he told me in 2016, 30 years after Challenger exploded.
His job was to sign and submit an official form. Sign the form, he believed, and he’d risk the lives of the seven astronautsset to board the spacecraft the next morning. Refuse to sign, and he’d risk his job, his career and the good life he’d built for his wife and four children.
“And I made the smartest decision I ever made in my lifetime,” McDonald told me. “I refused to sign it. I just thought we were taking risks we shouldn’t be taking.”
The unwinding has rippled to holders of the Credit Suisse funds, German municipalities that deposited money with Greensill’s bank, and a high-profile duo of venture-capital investors.
Greensill specialized in supply-chain finance, a type of short-term cash advance to companies to stretch out the time they have to pay their bills. The firm was once worth $4 billion based on investments from SoftBank Group Corp.’s Vision Fund. The collapse marks a high-profile blow for the mammoth Japanese investor.
The National Safety Council (NSC) estimate of total motor-vehicle deaths for 2020 is 42,060, up 8% from 39,107 in 2019. The estimated annual population death rate is 12.8 deaths per 100,000 population, up from 11.9 in 2019. The estimated mileage death rate is 1.49 deaths per 100 million vehicle miles traveled, up 24% from 1.20 in 2019. Estimated vehicle miles traveled for 2020 indicate over a 13% decrease compared to 2019, from 3,260 billion to 2,830 billion.
A medically consulted injury is an injury serious enough that a medical professional was consulted. Based on the current medically consulted injury-to-death ratio of 114:1, and rounded to the nearest thousand, the estimated number of nonfatal medically consulted injuries resulting from crashes during in 2020 was 4,795,000.
The estimated cost of motor-vehicle deaths, injuries, and property damage in 2020 was $474.4 billion.
Protection from COVID-19 related lawsuits may be on the way for Illinois businesses through House Bill 3003.
Known as the COVID-19 Liability Act, the legislation was filed in the House of Representatives on Feb. 18. If passed, the bill would offer protection to businesses from people claiming they were infected at a business and therefore the business is liable for medical costs, pain and suffering or more.
Clark Kaericher, vice president of Government Affairs at the Illinois Chamber of Commerce, says so far, there have been two crises proceeding from the coronavirus: a public health crisis and an economic crisis.
Winter storms paralyzing the United States have left millions without power and sent health officials scrambling to protect freezers full of COVID-19 vaccines, which have to be kept at extremely low temperatures or risk going bad.
Rolling blackouts through Texas took out at least one set of freezers full of the Moderna vaccine; 5,000 doses were sent to a university, a jail, and a handful of hospitals before they expired. The Oregon Health Authority is moving vaccines to places with power, although the agency isn’t disclosing which storage sites have their systems down. As part of its storm preparations, Kentucky made sure places holding COVID-19 vaccines had contingency plans.