Workers’ Compensation has experienced a long-term decline in overall claim frequency. However, for motor vehicle claims, the story is quite different.
The National Council on Compensation Insurance (NCCI), just published an update to it’s 2018 research brief titled “Motor Vehicle Accidents in Workers Compensation,” which examined the frequency and severity of motor vehicle accidents (MVA) from 2000 to 2016.
The brief noted that frequency decreased for both MVAs and all claims from 2000 to 2011. However, a key finding was that from 2011 to 2016, while the frequency of all workers compensation claims continued to decrease, the frequency of MVAs increased in both WC and in the general population. It cited the rapid expansion of smartphone ownership during this period as a possible contributing factor. Some key findings of the new update show:
— MVA frequency increased. From 2011 to 2018, the frequency of MVA lost-time claims increased, while the frequency of all lost-time claims decreased. Our previous research showed that the same was true for the period 2011 to 2016.
— Smartphone ownership over 80%. Smartphone ownership skyrocketed after the introduction of the iPhone in 2007, but growth has tapered off in recent years. As of year-end 2018, the percentage of US adults who own a smartphone is estimated to be over 80%.
— Safety evolves. State-of-the-art vehicle safety features, such as automatic emergency braking, will take time to penetrate the driving pool, as the average car age is just under 12 years.
— MVA claim severity. MVA lost-time claims continue to cost over 80% more than the average lost-time claim, because MVA claims tend to involve severe injuries (e.g., head, neck, and spine).
There is a notable disparity in smartphone ownership between younger and older drivers. Nearly all drivers under age 30, but only half of drivers over age 65, own a smartphone. This suggests that smartphone ownership among employed drivers may creep further upward as younger individuals enter the workforce and older workers retire.
However, since the vast majority of drivers now own smartphones, we may not see the same MVA frequency increases that occurred during the period when smartphone ownership was significantly increasing.
Greater use of cell phone blocking technology would also be expected to make driving safer, if enabled by the driver. This technology, available through smartphone apps, prohibits calls or texts while the vehicle is in motion. Alternatively, Bluetooth technology allows for hands-free communication while driving.
Several factors that may put downward pressure on MVA claim frequency include (i) stricter state cell phone laws, and (ii) vehicle safety improvements.
The source of data for this study is Statistical Plan data for NCCI states. This database contains detailed policy information, which allows an analysis of frequency and severity by various claim characteristics.