1. Aging in America Potential Impacts in Property Casualty Risk Management Christopher S. Carlson, FCAS, MAAA July 14 th, 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: A.Wage replacement (Indemnity) B.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

8. 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

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