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 jamesl@iii.org 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!

www.iii.org