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Motor Vehicle Records and All-Cause Mortality. October 11, 2012. Mark S. Dion FALU FLMI Vice President Underwriting Rules Development and Education US Facultative Underwriting RGA. Motor Vehicle Reports. Historically low cost and readily accessible

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Motor vehicle records and all cause mortality
Motor Vehicle Records and All-Cause Mortality

October 11, 2012

Mark S. Dion FALU FLMI

Vice President Underwriting Rules Development and Education

US Facultative Underwriting


Motor vehicle reports
Motor Vehicle Reports

Historically low cost and readily accessible

Routine requirements vs. order for cause after a disclosure

Scored by points

Not identical to states point system

Points adjusted by severity of the infraction and time since conviction

Often only one violation is assigned points if multiple infractions for a given day

Usually concerned about recent activity, often last 3 years only

Sum up the number of points, enter the table, assign the flat extra

Flat extras assigned to cover additional risk

Age & Gender differences

Current underwriting practices - a quick review

What underwriters watch for
What underwriters watch for


Reckless driving

Moving violations



Medical history

Other external cause death risk

“Scoff laws”

Major, minor, accidents, and suspensions

Beyond traditional use
Beyond traditional use

Newer focus

Poor equipment maintenance, lapse risks, risky behavior?

Inattentive driving, texting, phone calls

Seat belt use and risk taking behavior

Interaction with other courts, some exclusivity

Often the only insight to interactions with law enforcement

And various court systems

License is suspended, no apparent violations, why suspended?


Child support

Criminal activity


All cause mortality, not simply accident profile

DUI triggers a different type of underwriting investigation

If they aren’t paying their taxes or child support, what risks do they represent?

Looking beyond the rating table

Some challenges with the art of underwriting mvrs
Some Challenges with the Art of Underwriting MVRs

We don’t necessarily know what individuals were stopped for


State variations in severity and application of tickets, sanctions, fines and suspensions

Variations in retention of records

Some insights to other court actions through Administrative Withdrawals and Suspensions

“The agent says the suspension was for failure to pay child support…”

If a person is stopped and ticketed for multiple violations are they different than someone who only gets one ticket?

And the biggest challenge… where is our empirical evidence?

So now we move on to the RGA-LexisNexis MVR Mortality Study

Structured information and codes don’t tell the whole story

Background information
Background Information

RGA Re approached LexisNexis about doing a joint study

Saw need for a large-scale MVR Life Protective Value Study

LexisNexis is one of the largest providers of MVR records to the insurance industry

LexisNexis provided the data

Random sample of 7.4 million MVR requests made from 2006-2010

Nearly all automobile insurance applicants

Approximately 73,000 deaths were identified using the SSMDF

Data included:

MVR request date

Basic demographic data of the applicant (gender, birth month/year)

Motor vehicle infractions and dates of infractions

LexisNexis proprietary Standard Violation Codes (SVCs)

Month/year of death for deceased individuals

Background information con t
Background Information (con’t.)

Goal of Study: Quantify the additional mortality risk of applicants with adverse driving history and assess the protective value of Motor Vehicle Records (MVR’s) in life underwriting

RGA assigned a severity to each violation. “Major” violations include:

Alcohol or substance related infractions

Excessive Speeding (> 30 mph above speed limit)

Suspended, withdrawn, revoked, surrendered or cancelled drivers license

Failure to provide proof of financial responsibility

Failure to appear in court

Reckless or negligent driving

Mortality Study

Study Period 2007-2010

Expected mortality based on most recent U.S. Population Life Table

Results are relative mortality differentials based on study A/E’s

Includes all-cause mortality

Significant findings of the study
Significant Findings of the Study

Significant mortality differences found for those with “major” motor vehicle violations relative to aggregate levels (true across ages and gender)

Mortality increases as the number of violations (regardless of the type of violation) increase

Mortality increases as the number of “major” violations increase

Prevalence of “major” violations varies significantly by age

Overall, the extra mortality risk present is probably better represented by a mortality multiple (i.e., table rating) rather than a flat extra mortality load.

MVRs likely provide positive protective value across a wide spectrum of ages at relatively low face amounts.

Protective value framework1
Protective Value Framework

Basic Assumptions

10-year actuarial present value model

5.5% discount rate, 6% annual lapse rate

Mortality = 100% of the 2008 VBT Select & Ultimate table

Mortality Savings = A * B * C * D where

A = PV of death benefits expected to be paid for policy

B = Relative mortality differential for those with “Major” violations vs. those without

C = Prevalence of applicants with adverse or “Major” violations

D = Exclusivity of information provided by MVR leading to adverse UW decision

Savings are then compared to the cost of the MVR

Protective value con t
Protective Value (con’t)

Break Even Face Amount

Min face for mort savings to exceed cost of the MVR

Assumes $9 MVR and 25% exclusivity

Savings/Cost Ratio

Ratio of the mortality savings to the cost of the MVR

Assumes $9 MVR, $250,000 policy and 25% exclusivity

Required Exclusivity

Min exclusivity required to offer positive protective value

Assumes $9 MVR and $250,000 policy

Major violations
Major violations

Accidents (though prevalence is actually low)

Criminal complaints (prevalence is low)

Alcohol & drug related violations

Unlicensed driver – includes driving while suspended or revoked

Administrative withdrawals

License suspended or revoked

Reckless or careless driving

Speeding in excess of 35 miles an hour over the limit

Descending order of significance for single violations

The underwriter s view
The Underwriter’s View

Our traditional approach of rating MVR by flat-extras is probably not the best method

Debits and credits, the mortality multiple, numeric rating system works well

MVRs are not merely indicative of accident profiles, they are useful in identifying all-cause mortality

Consider the DUI, once it appears on an MVR, the case becomes an alcohol use case

On the upside elderly applicants with some degree of significant MVR history show better than expected mortality

Surrogate for cognitive testing anyone?

More than 3 major violations of any type suggests a moderate substandard rating is called for

Early results and some client validation suggests the rating can grade down over time, but not in less than 3 years

Some take away points

Next steps
Next Steps?

Time-specific analysis

Years since last violation, DUI, etc

Number of violations in previous __ years

Violation specific analysis

Past Accidents


Speeding Violations

Moving Violations

Administrative withdrawals

We’re open to discussion!