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Writer Samuel Johnson’s observation about travel, written centuries ago, is more relevant than ever: "The use of traveling is to regulate imagination by reality, and instead of thinking how things may be, to see them as they are." 

In a globalizing economy, foreign travel and residence are inevitable – and the need for balanced, data-driven underwriting decisions is urgent. While prevailing health conditions or civil strife present clear dangers, too often, media coverage – rather than actuarial evaluation – influences perceptions of foreign risk. RGA has released its 2018 Foreign Risk Study, a comprehensive assessment of the relative mortality risk of 205 countries based on weighted rankings across 25 indicators grouped into six broad categories:

• Life Expectancy
• Health
• Safety and Security
• Environment
• Infrastructure
• Economic

Each indicator is assigned a score of 1 through 10, where 1 is the best and 10 is the worst, based on the data for each variable relative to other countries. RGA’s Global Research and Data Analytics (GRDA) team developed a model to produce an ordered ranking of each country, based on the data and the relative importance of each variable. To further understand the interaction of the variables, GRDA predictive modeling experts developed a model that clustered nations into five groups based on data similarities and categorized countries A through E. Countries receiving an A ranking were considered safest, whereas E nations were viewed as the most dangerous. 

Among the study’s surprising findings: overall the U.S. ranks 39 in mortality risk. The top-ranked nation? Monaco. To more accurately assess the real, and sometimes subtle, factors that contribute to mortality risk in different geographies, insurers should carefully weigh a variety of factors.

Look at Health and Longevity

Life expectancy at birth can be an excellent indicator of a country’s overall living conditions that impact mortality expectations. The global average life expectancy in our study is 71.8. For comparison, life expectancy at birth in the United States is 79.8, which ranks 31 of the 205 countries in the analysis. However, life expectancy varies considerably among countries in the study. Those in the top 10% have a life expectancy above 80 while the bottom 10% have a life expectancy below 60. 

Much of this disparity in health and longevity is related to high rates of HIV/AIDS, tuberculosis, malaria and other infectious diseases, as well as high infant mortality and maternal mortality rates due to inadequate medical infrastructure and poor prenatal care. Additionally, obesity rates contribute to chronic conditions that have a considerable role in expected mortality. 

Another contributor to mortality differences is the quality of a country’s health system. There is certainly a relationship between how well a nation's health system provides for its people and that nation's average life expectancy. Pre-existing medical conditions can compound the risks of foreign travel, and the ready availability of high-quality health care is important to consider when traveling abroad.

Evaluate Safety on the Streets

Nations with high homicide rates pose additional mortality risks, even during a short-term visit. The highest homicide rates were experienced in Central and South America. In contrast, San Marino, Singapore, Iceland and Japan have negligible homicide rates. The United States has a homicide rate of 3.9 per 100,000 people, ranking 83 of the 183 countries with data.
 

Perhaps the more prevalent source of safety risk may be the rate of motor vehicle accident deaths. The WHO reports that worldwide approximately 1.3 million people die each year as a result of motor vehicle accidents. Poor road infrastructure and lax traffic safety enforcement can strongly contribute to morality risk for the traveler. The safest place to drive? Monaco. The most dangerous? Thailand. 

Recognize that Terrorism Risk is Low

Stabbings in London, shootings in Paris and attempted bombings in New York – these acts of terrorism often are successful in inspiring profound fear and screaming headlines. Depending on the locale, however, the true mortality risks posted by terrorism can remain low. For example, while 2016 Paris attacks left approximately 130 people dead, roughly three times that number of French citizens died on the same day from cancer.¹  

The University of Ghent in Belgium compiled terrorism statistics over several decades. The total worldwide terrorism fatalities on average were: 376 yearly from 1974 to 1983, 393 yearly from 1984 to 1993, and 705 yearly from 1994 to 2003. To put these numbers in perspective, compare them to the estimated annual global deaths resulting from: HIV/AIDS, 2,900,000; tuberculosis, 1,693,000; motor vehicle accidents, 1,200,000; and malaria, 1,000,000.

View Occupational Risk Through a Broader Lens

The journal Safety Science estimates fatal occupational accident rates per 100,000 workers for 165 countries in our study. Many of these occupational accidents are under reported, especially in developing countries. However, insurers would benefit from viewing occupational risks more broadly. Reporters, missionaries, politicians and judicial personnel are, unfortunately, subject to heightened mortality risk when traveling. 

Conclusions

Bottom line: Perception often clouds reality when it comes to foreign risk. As with all risk assessment, insurers would be well-served to look past perceptions of the world’s countries to numbers-based facts. Or, as Samuel Johnson put it: “…instead of thinking how things may be, to see them as they are.”&�Բ�����;

RGA recently updated its U.S. Underwriting International Guidelines, a reference tool in assessments of international travel and residence risks. These guidelines draw from U.S. State Department reports, RGA’s Worldwide Mortality Risk Study, World Health Organization (WHO) data, as well as a range of other international reference sources.