Baby Boomers Impact on Personal Injury Claims

Posted on: October 2, 2014

Population demographics may soon play a major role in the way personal injury claims, in particular accident benefits claims, are handled in Canada. Canada’s baby boom is larger than most of the other G8 countries and next year the first baby boomers will be reaching the age of 70. In fact, 27% of Canada’s population is comprised of baby boomers and in the last 10 years the number of Canadians aged 65 and above increased 15%.

For years economists have been concerned about how this is going to impact Canada’s workforce, but now it is clear insurance companies need to consider how this is going to impact their personal injury claims because, unlike previous generations, most baby boomers maintain two vehicle households, and do not plan to give up their licenses any time in the near future.

Liberty Mutual conducted a study in the United States which can easily be extrapolated to Canada outlining that, despite retirement and declining physical abilities, senior drivers still drive regularly with 41% driving every day and 38% driving several times per week. Based on the survey the seniors plan to continue with their driving habits despite indicating that:

• 78% feel they have declining physical abilities
• 16% said they tire easily when driving
• 13% report they have difficulty hearing and/or with vision
• 9% indicate they often get lost or feel confused while driving

This study was conducted recently and we can only anticipate that these numbers will continue to go up as more and more baby boomers reach retirement age and based on psychological studies of this generation it is clear that they will not give up driving as quickly as their parents because of a more determined and independent mindset coupled with increased generational wealth.

How will this impact Canadian P&C insurers? Aside from the argument/assumption that older drivers present an increased risk on the roadways (this is a current topic of hot debate which we will not wade into) we can agree that, all else being equal, the vast majority of people over the age of 70 are not as physically robust as they were in their younger years. It is a natural fact of aging that the human body starts to decline after the age of 40 and muscle tone starts to decrease at a more advanced pace and other common physical ailments start to present themselves such as osteoporosis, osteoarthritis, back pain, type II diabetes, heart conditions, etc. While all extremely common conditions for people over the age of 70, they clearly present more of a risk in the event of any type of physical trauma, such as a car accident. Therefore, even if accidents don’t increase with a far greater number of older drivers on the roadways, we can make a confident assumption that the injuries sustained from the accidents that do occur will be more severe with elderly drivers and occupants of the vehicle.

Distracted driving has now become one of the leading causes of vehicular accidents and this has resulted in an increased incidence of rear end collisions which, even if they were not the fault of the elderly driver, often result in injury. Current HCAI data has revealed that at least 70% of the claimants receiving treatment are being diagnosed with strains and sprains which fall under the Minor Injury Guideline and are often the result of this type of accident.

The current numbers from HCAI seem to indicate a trend that at least 23% of these claims will progress and move on to non-MIG treatment. However, the real question that we want to explore is what will these numbers look like when a full 27% of the population is older than age 65 and still driving?

Will that current number of 70% of the soft tissue injuries remaining in the MIG even remain constant? How would the same accident that left a 40 year old healthy female with neck strain and a bruised collar bone impact a 73 year old woman with mild osteoporosis and a bad back? These are important questions that need to be examined from both the insurance side and the practitioner’s side. Would the injury even remain in the MIG at all? We also know that older human bodies do not heal as quickly, especially if complicating age related factors such as diabetes are introduced, and how will this affect those 23% of treatment plans that continue on and become non-MIG claims?

We can conclude there is no question that the aging of Canada’s population will impact personal injury claims and how they are managed. The question is how much and what can be done to proactively minimize the impact?