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Aging in America Potential Impacts in Property Casualty Risk Management

Aging in America Potential Impacts in Property Casualty Risk Management. Christopher S. Carlson, FCAS, MAAA July 14 th , 2014. Property Casualty Lines with Potential Impact. Workers’ Compensation Automobile Homeowners. Workers’ Compensation.

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Aging in America Potential Impacts in Property Casualty Risk Management

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  1. Aging in AmericaPotential Impacts in Property Casualty Risk Management Christopher S. Carlson, FCAS, MAAA July 14th, 2014

  2. Property Casualty Lines with Potential Impact • Workers’ Compensation • Automobile • Homeowners

  3. Workers’ Compensation Provides benefits to injured workers and their eligible survivors for: • Wage replacement (Indemnity) • Future related medical costs

  4. Workers’ Compensation Many injured worker claims are short duration but some may remain active for 50 or more years. After 7 years following the close of a year’s accidents , about 12% of Indemnity payments remain and about 22% of future Medical payments remain.

  5. Increased Longevity Impacts in Worker’s Compensation • Longer than initially anticipated payout horizon when premiums established • Cost of Living Adjustment (COLA) impacts • Potential increased medical costs due to • Duration (especially pharmaceutical costs) • Higher cost of newer treatments

  6. Automobile • Original no-fault laws provided unlimited medical benefits • Many states adopted limitations • Only remaining unlimited state – Michigan • Issues similar to workers’ compensation • Increased # of older drivers and at older ages • Possible increased accident frequency (decreased reaction times, etc.) • Increased related medical costs

  7. Homeowners • Many insurers provide discounts to retirees due to increase daytime occupancy • Impact of increased longevity uncertain

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