MMLC - ISCS aviation and hazardous sports study

Area of Science:

• Actuarial science
• Risk management
• Mortality studies

Background:

• Increasingly lower mortality rates in the insurance industry highlight the impact of mortality from high-risk activities.
• This research addresses a 20-year gap in intercompany studies concerning aviation and hazardous sports risks.

Purpose of the Study:

• To investigate the relationship between mortality and participation in aviation or hazardous sports within an insured population.
• To analyze mortality data collected via the Impairment Study Capture System (ISCS).

Main Methods:

• Analysis of 45,206 insurance policies from 1989-2004 coded for aviation or hazardous sports participation.
• Stratification of aviation by hours flown and hazardous sports into categories like motor vehicle racing and underwater sports.
• Calculation of excess death rates per thousand relative to the 2001 Commissioners Standard Ordinary (CSO) table, with stratification by underwriting factors.

Main Results:

• Observed 69 deaths in aviation and 60 in hazardous sports over an average 3.2-year follow-up.
• Extra mortality was noted for aviation in early policy durations, while hazardous sports showed persistent elevated mortality.
• Policies rated for these activities exhibited higher mortality compared to those issued at standard rates.

Conclusions:

• Life insurance underwriting successfully identifies and appropriately classifies the risks associated with aviation and hazardous sports.
• The lack of observed extra mortality in later policy durations may be a genuine finding or a result of the study's design.