Insurance News - Thursday, August 28, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, August 28, 2014:

• Google has recently admitted that its driverless cars are designed to intentionally break the speed limit by up to 10 miles-per-hour.
• A study suggests digital display advertising is nine times better at creating immediate brand awareness for auto and life insurance providers than a commercial on TV.
• A new California rule says that driverless cars are only legal on public roads if a driver is able to take “immediate physical control,” which means that Google is going to have to make a couple of small adjustments to the cars: fitting that missing steering-wheel and pedals.
• A vehicle-to-vehicle transmitter for only $350 could mean the end of car collisions.
• Ottawa police union claims the collision reporting centres give impaired drivers time to sober up.
• Fast-moving technology runs into slow-moving regulators as U.S. Federal regulators are stalled the approval of driverless cars.

HCAI Data: Most Early Treatment Is Provided By Chiropractors and Physiotherapists

The IBC has now published the standard HCAI reports for the first half of 2014. The document provides over 75 pages of aggregate data collected by HCAI going back to 2011. HCAI was made mandatory on February 1, 2011.

The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years.

The chart below sets out the treatment reported on the HCAI system by healthcare profession.  It shows that the majority of claimants see a chiropractor or physiotherapist which is expected since the majority claims are strains and sprains.  But as the claims develop, claimants are seeing additional healthcare professionals.  In the most recent accident half year (first half of 2014) claimants saw an average of 1.5 professionals.  For the second half of 12013, claimants saw an average of 2.1 professionals and in the first half of that year 2.4 professionals.

The largest increases in interventions for older claims relate to physicians and psychologists. Because the data includes both treatment intervention and assessments, this is expected outcome. Older claims are more likely to undergo an independent medical assessment or a psychological assessment.  There appears to be minimal growth in chiropractic and physiotherapy interventions over time.

HCAI Data: Most MIG Claimants Continue to Receive Some Treatment After Completing MIG Treatment

The IBC has now published the standard HCAI reports for the first half of 2014. The document provides over 75 pages of aggregate data collected by HCAI going back to 2011. HCAI was made mandatory on February 1, 2011.

The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years.

The chart below provides some insight into what might be happening to MIG claims over time. Although as many as 75% of claims are classified as strains and sprain and should fall under the minor injury definition, only a fraction of those claims receive MIG treatment only. A majority of those claims actually receive treatment within the MIG and additional treatment outside the MIG, likely when the MIG funding is used up.  However, that is not to day that they are actually "escaping" the minor injury definition and cap.  The average cost of treatment for strains and sprains is under $3,000.

One must be careful interpreting this data.  One might want to conclude that the number of claims receiving only MIG treatment has been increased over time based on the chart below since each accident half year, fewer claims are receiving both MIG and non-MIG treatment. However, the newer claims are likely still open and many of those in the MIG only category move over time into the MIG and non-MIG category.  When you compare data from previous reports you begin to understand how the data continues to develop.  I had previously reported that for the first half of 2013, 48.3% of strains and sprains received MIG treatment only and just 23.2% received both MIG and non-MIG treatment.  The most recent report indicates that only 26.7% of these injuries have only received MIG treatment and now 53.8% received both MIG and non-MIG treatment. These numbers will continue to develop further.

HCAI Data: Over 70% of MVA Injuries Continue to be Strains and Sprains

The IBC has now published the standard HCAI reports for the first half of 2014. The document provides over 75 pages of aggregate data collected by HCAI going back to 2011. HCAI was made mandatory on February 1, 2011.

The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years.

The chart below breaks down the percentage of claimants receiving treatment per injury group. The data is further broken down by accident half year and the percentages are based on claims transactions between the accident date and June 30, 2014.

The injury group sizes have remained consistent since the HCAI began collecting data.  The data suggests that there doesn't appear to be any obvious erosion of the minor injury definition.  At least 70% of claimants receiving treatment are being diagnosed under strains and sprains which fall under the minor injury definition.  The diagnosis does change over time when you look at previous periods in a chart I posted earlier this year. There has been some drifting from strains and sprains to WAD III (PN) and third degree tears (FD).  For example, for the first half of 2013, the SS injury group dropped 2.2% between the two reports while the PN and FD groups increased by 1.0% and 0.8%.  This may reflect disputed claims and the time it takes to resolve disputes.

Driverless Cars Will Create Cities with No Parking Lots, Congestion, Collisions...and No Car Insurance

Cars changed the world and our cities in the 20th Century by freeing people of the limitations of their geography.  People now have the freedom to live, work, shop and travel almost anywhere they want. The car industry has caused suburbs to grow, and made the development of road and highway systems necessary.  Cars also made possible the development of shopping malls, roadside businesses, supermarkets, motels and hotels, intercity travel, the taxi industry, and of course auto insurance.  Of course along with the positive contributions of cars, there have been negative implications - car accidents are a leading cause of death and injury in the world. Cars have also created traffic congestion and contributed to air and noise pollution.   

As people became more dependent on cars, those without access to cars have come less independent as they struggle to live, work and shop in cities where everything is spread out over large geographic areas.  Our cities and society are about to undergo another dramatic change as we move closer to the introduction of driverless cars.  Driverless will be here soon.  Google is testing a fleet of driverless cars in the United States and Britain recently announced it will begin a trial on public roads next year.  The Ontario Ministry of Transportation is consulting on a pilot project to test driverless cars so we may soo see driverless cars on Ontario roads.  Many of the negative aspects of cars will soon vanish as robot cars will take us wherever we want with less cost, stress and risk.  Car ownership will no longer be necessary and our cities and suburbs will be transformed again.

So what will this future world look like?  It may be hard to believe but no one will own a car.  Let’s take a look at John and his family.  John steps out of the shower and after drying off picks up his smartphone and orders transportation for his family for the day.  John needs to be picked up for work at 8:15 and brought home at the end of the day.  His wife, Gloria needs a ride to work at 8:40 and on the way will drop off her two sons, Brad and Glenn, at school.  She will need a ride home at 4:30 with a stop at the supermarket.  After school Brad will need a ride to hockey practice and Glenn will be dropped off at a friend’s house.  The cars are provided by RoboTrans which operates a fleet of driverless cars that are on the road 24 hours a day. 

At 8:15 John steps out of the house and a car is waiting in front.  John’s home has no garage or driveway and neither do his neighbours in this relatively new suburb which makes the neighbourhood esthetically more appealing and cheaper to build.  John reviews his presentation that he will be making this morning in the car which zips through traffic at brisk pace.  Rush hour as we know it will no longer exists.  A road full of driverless cars moves at constant speeds and distances between cars allowing the road to accommodate more volume at greater speeds.  The commute always takes 18 minutes and when the car pulls up in front of his office, John steps out and heads inside.  The trip is automatically charged to his credit card and the car pulls away and smoothly gets back into traffic to head off to pick up the next customer or to the city’s periphery where it awaits being wirelessly called back.  At the end of the month, John, Gloria and the kids have planned a driving holiday to the East Coast.  The family has already booked all the hotels and vehicles for the trip.  Not having to drive the long distance will mean that John will arrive fresh and ready to enjoy his holiday. 

Downtown will look quite different with no cars parked on the streets.  For one thing, traffic will be lighter without thousands of cars circling around looking for parking spots.  There won’t be any parking lots or gas stations.  All that ugly space will be gone, which will free up commercial real estate downtown and reduce property values.  As a result living and working downtown will become cheaper.  There will still be gas stations and RoboTrans will likely own its own located in industrial neighbourhoods for refueling its fleet.  There will be no taxis on the road because RoboTrans provides the same service but without a driver and at a much lower cost.  The UPS driver will likely also disappear.

So why won’t I be owning or leasing a car in the future?  Let’s say I drive my car on average 2 hours each day.  That’s about 8% of the day.  The remaining 92% of the time it sits on my driveway or a parking lot.  If I share a vehicle with others then my cost per trip will drop significantly.  My home and property taxes will drop because my home will need a small lot when I no longer require a garage.  I also will no longer need to have a driver’s licence or learn to drive.  When I become old and infirm, it won’t be necessary to give up driving or my independence.

There will no longer be road collisions and be no need to purchase car insurance.  That complex and costly system for insuring drivers and vehicles disappears.  Most collision repair shops, towing operators and private rehabilitation providers will disappear as well.  Personal injury lawyers will see case loads fall significantly.   Just imagine a world where there are virtually no injuries and deaths from car crashes, better mobility for people who can't drive now, more efficient use of resources, and healthier, more vibrant cities.  We will finally stop obsessing about cars and focus on people and making our cities more livable.

Just as Henry Ford revolutionized society when he introduced the Model T over a hundred years ago, Google will take us to the next frontier when driverless cars hit the road in the next few years.

Insurance News - Monday, August 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, August 18, 2014:

• It takes four times longer to recognize new things when multitasking.  So it's not surprising the reaction time for a distracted driver is impaired.
• With all the talk about the Google car, Mercedes Benz has a better driverless car solution...for now.
• User-based insurance is set to continue to have strong growth and is on its way to become an essential part of insurance industry’s offerings.
• If a driverless car gets in an accident, Who is liable?

Insurance News - Tuesday, August 12, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, August 12, 2014:

• BMW plans to be the first car manufacturer to install usage-based insurance telematics into cars.
• A Globe article on how driverless cars will not only transform our cities but potentially displace a lot of workers driving trucks and taxis.
• One thing that insurers will need to be worked out is how to insurer a driverless car since there will not longer be any actual drivers connected to that car.  So long age, sex and marital status since young males will be the same risk as older drivers.
• An article about customer retention in the auto insurance sector.
• CANATICS continues to grow.

Insurance New - Friday, August 8, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, August 8, 2014:

• The UK had committed to launching a £10 million driverless car experiment and the UK government will amend road laws in order to allow trials beginning in 2015. This will kill auto insurance business down the road.
• The FBI is concerned that driverless cars will be used as suicide car bombs except without a driver.
• Insurers have been focusing telematics for young drivers but a study finds demand for telematics among older drivers.
• How U.S. auto insurer Progressive collected 10 billion miles of driving data from its customers.
• A story on how Newfoundland drivers have millions more in accident claims every year than New Brunswick drivers, but have cheaper premiums.