Improvements in insured life mortality have largely been taken as a given over the last 100 years. There have been some signs that this mortality improvement has been slowing, or halting over recent years.
I've been wondering whether the dramatic fall in motor vehicle accidental deaths is part of the story.
Despite the scepticism that some of the road safety initiatives have attracted, it is hard to deny that, overall, the road safety campaigns have been a fantastic success.
Vehicle accident mortality per 100,000 population has dropped by around 80% since the the 1970s, from a rate of 28.95 in 1970 to a provisional rate of 6.48 in 2009. This is the result of better roads, safer cars and law enforcement. The fatality rate per 100,000 cars has dropped even more as the number of cars has increased faster than the population, making the overall reduction even more remarkable.
This is a great boon for society. As a child I remember families we knew devastated by young people killed in car accidents, but this is much rarer these days
The implications for insurance is that a good deal of the last few decades mortality improvement has come from is source, and that even eliminating traffic deaths completely (which isn't going to happen) wold only give a quarter of the improvements from this soure to date. This is particularly important for insurers as accidents make a higher proportion of younger deaths and disablements than at older ages. Also, many of the medical breakthroughs that are driving overall mortality improvements are in diseases that strike at older ages where insurance is less common.
Insurers, particularly reinsurers and group insurers should be cautious about assuming future mortality improvements in their long term pricing.
To see the quite remarkable statistics: RTA fatality rates 1909 to 2009
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