“Definitely the decline in lost-time claims has largely been due to improvements in workplace safety. The improvements that companies have made and the investments that they've made have been considerable and been part of overall strategic planning. It's manifested itself in enhanced automation, robotics, and general overall improvements in risk management, so that's what we've seen.
There's also been effective reform aimed at addressing increasing workers' comp costs and abuses in the system that have resulted in insurers paying lost-time claims, for example, to workers who could have and probably should have been back to work. The effective reforms and also overall workplace safety has had the positive impact on loss frequency.
Now again, while loss frequency has been trending positively, loss severity has definitely been declining or going in an adverse manner. That covers both medical cost severity and also indemnity severity. Although medical cost severity has really been the key driver of severity going in the wrong direction.
What we've seen, for example, one factor in that is motor vehicle accidents. We've seen more motor vehicle accidents that have involved workers and these increasing number of claims have included fatalities. That's occurred despite the fact that we know newer vehicle are definitely being made with more safe and stronger materials.
Also, there have been all kinds of safety improvements with those vehicles, but still we've seen a greater number of motor vehicle accidents impacting workers and having an impact of workers comp severity from that standpoint.
In particular, the classes of business that have been impacted by motor vehicle accidents have included long- and short-haul trucking, taxi drivers, and also sales and service vehicles. We've seen that over time again having an impact on the motor vehicle accidents and an impact on severity.
In addition—and this has been impactful in both personal lines and commercial lines in terms of auto—increased smartphone usage has also had an impact on the losses that have affected workers' compensation, or workers in terms of severe accidents. We'll see how those trends continue on a going-forward basis.”