Health and safety improvements at work have reduced mortality risk to acceptable levels for just about all occupations. Calvin Cole highlights the underwriting implications.
When the underwriting research team told me test pilots, deep-sea divers and offshore rig workers could now be accepted at standard rates, I had to check my calendar to make sure it wasn't the first of April. But this really is a good news story about improvements in health and safety at work.
A handful of jobs are still risky - if your occupation involves travel to a dangerous part of the world, or putting your head into a lion's mouth on a regular basis, your life cover might be rated. But most other jobs, including those traditionally thought to be highly dangerous, are no longer a risk factor for life insurance.
Health and safety statistics show the rate of fatal injury has decreased steadily, with an overall rate of 0.5 per 100,000 workers in 2009/10. According to provisional numbers from the Health and Safety Executive, there were 151 deaths at work last year in the UK, an impressive one-third reduction compared to the average over the previous 5 years.
Such improvements show the fatal injury rate in most occupations is now small; allowing standard rates for many more life insurance applicants.
The key areas where occupational loadings are being removed for life business are aviation, construction, diving, mining and tunnelling and rig working. Here's the rundown:
Aviation pilots
The safety record of the aviation industry is closely monitored by the UK Civil Aviation Authority and they regularly publish detailed accident statistics. The aviation industry follows extremely rigorous procedures to minimise the risk to pilots and passengers. The latest data show all commercial pilots can be accepted at standard rates, including those flying helicopters or working as test pilots.
Construction workers
One of the main fatal accident risks for construction workers is from falls, particularly for roofers, scaffolders, steel erectors and other people working at heights.
The statistics show a steady and significant reduction in fatal injuries from falls over the past decade. This is largely due to improved health and safety standards.
Divers
Exceptionally high training standards, coupled with strict procedures, means only the best qualified or experienced divers are employed in the UK. This is reflected by the very low number of fatal accidents in recent years.
Miners and tunnellers
The main accident risks from working underground include roof cave-ins, explosions, fires and flooding. Also, long-term exposure to dusts can increase the risk of lung diseases. But in stark contrast to the poor health and safety standards in some parts of the world, the UK has an excellent health and safety record, allowing miners and tunnellers to be accepted at standard rates.
Rig workers
Working on a rig obviously involves potential dangers - extracting volatile substances with heavy machinery, often in remote locations and extreme weather conditions can be a risky combination. Production workers performing day-to-day drilling duties on the rig floor have the highest accident rate.
However, the excellent safety record has reduced the number of fatalities and major catastrophes like the Piper Alpha explosion, which claimed 167 lives in 1988, are mercifully rare.
Britain's most dangerous jobs
A few occupations are still risky and ratings or declinature are still possible. Britain's most dangerous jobs include a wide assortment, ranging from workers going into a war zone and deep-sea fishing, to any occupation where the daily routine includes death-defying feats.
Travel to dangerous countries
Clearly any work involving travel to war torn areas of the world is highly dangerous. Examples include journalists, cameramen, private security guards and armed forces personnel.
Even so, some cases can be accepted with an increased premium. If cover is offered, it would usually be restricted to mortgage related policies, mainly to stop applications for inappropriate amounts of cover. The final decision is based on where the applicant is going and the job itself.
Commercial fishing
Fishing has always been a dangerous occupation with shocking mortality rates during the nineteenth century. Despite significant improvements in the past century, commercial fishing is still one of the most risky British occupations.
A 2009 study by the School of Medicine at Swansea University claimed commercial fishing is Britain's most hazardous occupation. The study reported a fatal accident rate of 102 per 100,000 fishermen, which is more than 100 times riskier than the average British worker. By comparison the next most hazardous rate was for dockers at 28 per 100,000, with roofers and scaffolders at about 12 per 100,000.
The size of the fishing vessel is a key risk factor, with the highest risk on small to medium-sized boats. Statistics published by the Marine Accident Investigation Branch show the main causes of fatal injury are treacherous weather conditions, poor vessel construction, lack of lifesaving equipment and hazardous working procedures.
Other dangerous occupations
Occupations involving unusual risks can also attract a loading. Examples include stunt performers, circus acts and dangerous sports, like motor racing drivers and national hunt jockeys. Even then we look at these risks on an individual basis and ratings are not always justified.
Total and permanent disability insurance
The health and safety improvements also allow better acceptance terms for total and permanent disability cover. Some previously declined occupations can now be accepted, and many others are offered better terms.
This good news story about significantly improved health and safety standards at work has important implications for underwriting. RGA's market leading research shows these improvements allow insurers to offer better acceptance terms to many more customers. And we know fewer rated cases results in better completion ratios!
Calvin Cole is head of underwriting and claims at RGA UK
