It appears that bad drivers live shorter lives than good drivers and not just because they get in accidents.
The same motor vehicle driving records already widely used to help determine how much a consumer pays for car insurance can also be used to predict the potential length of an individual’s life. According to a new study, motor vehicle records shed new light on lifestyle risk and can help life insurance executives, actuaries and underwriters better structure insurance policies in the U.S.
The Motor Vehicle Record (MVR) Mortality Study completed by LexisNexis and RGA Reinsurance Co. analyzed more than 7.4 million MVR requests and determined they are a predictive data source of an individual’s all-cause mortality — meaning one’s likelihood of dying in general, not just in a vehicle.
The researchers found that individuals with major violations, such as alcohol-related infractions and excessive speeding, have all-cause mortality rates that are 70 percent higher than individuals who do not.
Additionally, the presence of six or more driving violations on an MVR elevates an individual’s all-cause mortality rate by 80 percent.
The researchers say the trends discovered in the study also apply across all age groups and genders. Generally, women have a lower incidence of adverse driving records. However, the relationship between all-cause mortality and major violations is more pronounced for women than men. Women with major driving violations face 100 percent greater all-cause mortality rates than women who do not; men with major violations have 61 percent higher all-cause mortality rates than men who do not.
Individuals in the study were segmented according to their number of driving violations, regardless of severity. It was found that the more violations on an individual’s MVR, the higher the relative mortality ratio. In particular, individuals with between two and five violations experienced 24 percent higher mortality, and those with six or more violations experienced 79 percent higher mortality ratios. The trends are consistent across all age groups, demonstrating that the number of violations is an important predictor of increased mortality.
Individuals with high numbers of major driving violations represent the worst risks. Having just one major violation on an MVR elevates an individual’s all-cause mortality by 51 percent; while having four or more violations elevates an individual’s all-cause mortality to more than twice that of individuals without major violations.
“Our research shows that motor vehicle records can be a reliable indicator of lifestyle risk for insurance applicants,” explained Elliott Wallace, vice president, life insurance, LexisNexis. “For consumers, this study offers insight into how lifestyle impacts risk and the considerations they need to make for life insurance. By examining the severity and number of violations on an applicant’s MVRs, a life insurer can make more accurate pricing decisions, improve risk posture and improve underwriting efficiency.”
The results from this study also suggest that motor vehicle records likely have positive protective value across a wide spectrum of ages and face amounts for life insurance carriers. Analysis shows that MVRs offer positive protective value across a wide spectrum of ages and genders in life underwriting.
For insurers, LexisNexis researchers note:
- In cases where underwriters are striving to improve the customer experience by ordering fewer reports, MVRs offer excellent protective value because they offer insights into an applicant’s lifestyle risk.
- MVRs are one of the more affordable data sources available for insurers and are non-intrusive for customers — a benefit when applicant retention is an issue for most carriers.
- MVRs can help insurers improve efficiency – real-time availability of MVR data means that insurers can streamline their processes and reduce cycle times.
“As insurers seek to find faster and cheaper ways to underwrite policies, including simplified issue, the use of data sources like MVR can provide big time and cost savings,” said Karen Monks, analyst, Celent.
Monks said the LexisNexis and RGA results provide “strong indications that MVR data is a reliable and cost effective data source to reduce underwriting risk.”
For the study, LexisNexis supplied 7.4 million randomly selected MVR records from all 50 of the states and used proprietary linking technology to cross-reference these requests against the Social Security Death Master File (SSDMF); approximately 73,000 deaths were identified. Subsequently, RGA completed an actuarial mortality study, normalized the data to compensate for possible under-reporting of deaths in the SSDMF, and calculated the relative mortality ratios for various customer segments. Individuals were segmented based on clean records, minor violations or major violations. To avoid bias, major violations were pre-defined by RGA, and include alcohol- or substance-related infractions, excessive speeding, and reckless or negligent driving.