Throwing cold water on the insurance industry’s dog bite numbers
Today is National Pet Day, a day to cherish the love, entertainment and fulfillment provided to us by our animal companions. Or, if you’re in the insurance industry, it’s a day to stoke fear of dog bites.
“Dog-Bite Claims Surge 18% as Children Bear Brunt of Attacks” reads the headline from Bloomberg, based on a press release from the Insurance Information Institute. Indeed, the III produces a similar release every year, in recognition of National Dog Bite Prevention Week, which runs April 9 to April 15.
The calendar-making gods are sending some decidedly mixed messages.
As is their wont, insurers want to highlight safety, which is a perfectly commendable goal. Dog bites and other pet-related injuries befall thousands of people each year, and better care can and should be taken to mitigate and avoid them. They also constitute a significant portion of the loss costs associated with the liability portion of one’s homeowners insurers policy, which explains the motivation for the public education campaign.
However, when one drills down on the numbers, there’s little to justify the alarmist rhetoric. Dog bites are not “surging” at all.
It first bears noting that liability isn’t actually an especially big ticket item for homeowners insurers. The III notes that the industry paid out $602.2 million in dog-related claims in 2016. That sounds like a lot. But it represents just a tiny portion—just a little more than 1 percent—of the more than $48 billion in claims they paid out, much less the $91.4 billion in direct premiums they collected, according S&P Global’s statutory insurance data.
Also worth mentioning is that, while the headlines tout a rise in dog “bites,” the data actually refer to “dog-related injuries.” If you break your neck after tripping over your shih tzu, that gets included. How often does that happen? A lot. Falls are the number one cause of nonfatal injuries in this country. A 2009 study from the Centers for Disease Control and Prevention found an average of 87,000 fall injuries treated in emergency rooms each year were associated with cats and dogs. Dogs represented 88 percent of the total, or about 76,000 dog-related falls that send Americans to emergency rooms every year.
Of course, that 76,000 figure far exceeds the 18,123 dog-related claims reported by the III, so the vast majority of people who suffer dog-related falls never file a homeowners claim, even if they went to the emergency room. No doubt the same is true of dog bites. Of the claims we know about, what proportion are dog bites and what proportion are other kinds of injuries? We don’t know. The III doesn’t break out those numbers. We do know that dog bites sound scarier than dog falls (even though the latter might actually produce more serious injuries) so it shouldn’t be surprising that’s what gets the headline.
Speaking of headlines, let’s look at Bloomberg’s choice to characterize the rise in dog-related claims as a “surge.” It’s true that claims rose about 18 percent from 15,352 in 2015 to 18,123 in 2016. Is that really a surge? Bear in mind that there are nearly 90 million dogs in the United States. Even if we assume no single dog was responsible for more than one insurance claim, it would still mean only about 0.02 percent of American dogs contributed to an injury that sparked an insurance claim. A difference of less than 3,000 claims per year, in a universe that big, amounts to statistical noise.
But even if we were to take the incredibly small sample size at face value, note that this year’s increase followed back-to-back years when the number of dog-related injury claims declined. From 2013 to 2015, the number of pet-related claims fell 12 percent, from 17,359 to 15,352. But were we treated to headlines about how dog bites had “plummeted?” No. No, we were not.
For that matter, it is just frankly irresponsible to represent these numbers without making basic adjustments for factors like inflation and population growth. The III notes that the average cost of a dog-related claim has risen by 73.4 percent from 2003 to 2016. This would leave one with the impression that pets have become more dangerous or, specifically, that bitey dogs have become more vicious.
But that’s just not true. Of course the average injury claim has gone up since 2003, because the cost of health care has gone up since 2003. Using a medical cost inflation calculator, one would expect the average claim to rise by about 56 percent over that period. Again, dealing with a small sample size, the mix of the kinds of claims in a given year could make the average claim go up by more or less than the baseline cost of medical inflation. Indeed, from 2015 to 2016, the average claim went down by 11 percent.
Even more significant to the overall picture is that neither the III, nor any of the news outlets reporting their findings, make even the slightest effort to put into perspective that, over the long term, the number of claims has been relatively flat, even as the number of people and dogs continues to increase.
According to the III, from 2003 to 2016, the number of dog bites rose by 7 percent, from 16,919 to 18,123. But the population of the United States rose by 11 percent over that same period, from 290.1 million to 322.8 million. And as the chart below makes clear, the population of U.S. dogs surged by a whopping 35 percent.
So, this actually means both that a declining proportion of Americans are being bit by dogs each year and that a way smaller percentage of dogs are biting (or tripping or what have you) people. In a nutshell we’ve gone from one dog-related injury for every 17,146 people and 3,841 dogs to one for every 17,811 people and 4,949 dogs.
That’s the kind of good news we should be celebrating on National Pet Day.
Image by everydoghasastory
