maib scheme update - actuaries institute · maib scheme update . christopher hill– chief...
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History • MAIB came into existence on 1 December 1974 . The
second “no fault” CTP scheme in Australia ( just behind the Victorian MAB- now TAC)
• Long Term care benefits
• introduced in May 1991 • unlimited reasonable treatment and care , for those
requiring more than 2 hours care per day.
Scheme Features
Compensation under scheme • Statutory Benefits ( no fault), and • Common Law damages.
Statutory Benefits • medical and hospital expenses , • rehabilitation, • attendant care costs , • death benefits, and • disability allowance ( 80% coverage of lost earnings – up to a
time limit)
Scheme Features
Statutory Benefits cont. • Statutory limit of $400,000 • Exclusions for “No Fault” claims
• Drivers of unregistered vehicles • Reductions in Disability Allowance for DUI • Various serious offences involving a Motor Vehicle • Some off-road ( unregistered) vehicles • Motor Racing
• Inclusions • Driving or riding anywhere - not just on a Public Road
(relates to Common Law and Statutory Benefits) • No Material changes to legislation over last 2 years
Scheme Features
Scheme Features Common Law
• Unlimited access to Common Law (no thresholds) Limits to Common Law damages – • No interest on past losses • Civil Liability Act 2002
• General Damages – minor restrictions on small claims, • Economic Loss - 3 x AWE, • No Gratuitous Care, • 5% discount rate, • 25% presumed con. neg. for intoxication.
• Motor Accidents(Liabilities and Compensation) Act 1973
• Statutory reduction for failure to wear a seat belt.
Scheme Features
Premiums • Regulated pricing – review every 4 years by Office of the
Tasmanian Economic Regulator (OTTER)- formerly Government Prices Oversight Commission (GPOC).
• Based on recommendations – Premiums Order is made
specifying premium rates for vehicle classes and maximum yearly increases.
• Last review 2009 – in the middle of GFC. • Only one CPI increase in last 6 years.
Scheme Features
Key Risks • Investments markets – volatility
• Government Policy / Regulatory Changes – NDIS/NIIS • Fair Work Australia gender equity wage case – Attendant
Care costs • Plaintiff Lawyer advertising ( developing risk) – Pressure
on Common Law Damages
Financial Position
MAIB strives to maintain a balance between- • premium and investment income, • the cost of claims (including a prudential margin), and • the requirement to achieve a sustainable commercial
rate of return that maximises value for the State.
Financial Position
312 316 320 324 328 332 336 340 344 348
08 09 10 11
Prem
ium
($)
Year
Motor Car Premium
Financial Position
0 20,000 40,000 60,000 80,000
100,000 120,000 140,000
08 09 10 11
($'0
00)
Year
Net Premium Revenue
Financial Position
-60,000 -40,000 -20,000
0 20,000 40,000 60,000 80,000
100,000 120,000
08 09 10 11
($'0
00)
Year
Profit (Before Tax)
MAIB not regulated by the Australian Prudential Regulatory Authority (APRA) APRA minimum capital requirement standards for insurers do not apply to MAIB. Solvency calculated by dividing outstanding claims liabilities by net assets (including a prudential margin of 20%) Set target solvency in the range 20% - 25% Apart from 2009 ( GFC) MAIB has maintained its solvency within target range over last 6 years
Financial Position - Solvency
Financial Position - Solvency
0.0 5.0
10.0 15.0 20.0 25.0 30.0 35.0
06 07 08 09 10 11
%
Year
Solvency Level
• Ensure investments achieve long-term real growth to maintain
an acceptable level of solvency.
• 35% / 65% defensive / growth asset split
• Increased average return but with increased volatility
• Diversified portfolio- • nine (9) different classes, • both in Australia and overseas, • nineteen (19) Fund Managers
Financial Position – Investment Philosophy
Financial Position - Investment Philosophy
20%
16%
5%13%
6%
15%
25%
Asset Allocations at 30 June 2011
Australian equities
International equities
Emerging markets
Property
Infrastructure
Cash
Fixed interest
Claims Management
Claims • Claim numbers continue to drop-
• Yearly claim numbers at record low • Open claims count at near record low
• Statutory Benefits payments stable • Common Law Damages payments stable-
• Common Law claim numbers dropping • Average claims cost increasing • No superimposed inflationary pressures
• Approx 2% per annum increase in registered motor vehicles
Claims Management
2700
2800
2900
3000
3100
3200
3300
3400
3500
07 08 09 10 11
Num
ber
Year
New Claims
Claims Management
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
05 06 07 08 09 10 11
Num
ber
Year
Open Claims
Claims Management
0 1 2 3 4 5 6 7 8
08 09 10 11
No.
of C
laim
s pe
r 1,0
00 V
ehic
les
Year
Claim Frequency
Claims Management
62
64
66
68
70
72
74
76
78
80
82
06/07 07/08 08/09 09/10 10/11
$M
Financial Year
Claim Payments
Paid
Claims Management
• Existence of both Statutory Benefits and Common Law assists in managing claimant rehabilitation.
• Outcome- • Need to bring Common Law claims is reduced; • Claimant “loss” reduced through early rehabilitation; • Already compensated for majority of loss.
• Long term care –
• Awards for significant injuries are not high (reduces ambitious claims by lawyers)
• Threshold of 2 hours care per day is easily identified.
Claims Management
Early claims reporting by – • Hospitals • Media ( newspapers) • Police • Injured Claimants Easy access to claim forms – • Hospitals • Service Tasmania centres • Online Early intervention and relationship building
Claims Management
Prompt Claims Management • Applications for benefits processed on day of
receipt
Robust assessment of entitlements • Eligibility criteria must be met • IT system flags caps and limits
Regular claims reviews • Peer review of all claims
Claims Management
Specialist services outsourced
• Specialist Facilities Manager and Attendant Care provider engaged;
• Separate panels for • Legal; • Rehabilitation; and • Investigations.
• Service level agreements in place to ensure quality and consistency of service
Daily Care
Segregated management of daily care claims • includes potential daily care claims, and • children with head injuries
Small caseloads • caseloads of approx. 50 claims
Daily Care
Reserves • Reviewed at least annually • Actuarial valuation based on individual claims Standardised support needs assessments of injury related care and support was introduced early 2010 Purpose built care facilities and housing in Hobart, Launceston and the North West Tasmania.
Daily Care - Support Needs Assessment
• Support Needs Assessments panel introduced in February 2010.
• The main aims in establishing SNA's were to introduce:
• A standard assessment tool for the provision of consistency in reporting;
• Evidence based assessments; • Clear support program hours, objectives and goals, • Provides specific data for reporting into the future.
• Successful first 12 months.
• Adoption by Panel Providers in their broader work
Accident Prevention
• Sponsorship of the Road Safety Advisory Council (formerly Road Safety Task Force) since 1996
• Motorcycle Safety Strategy
• Infrastructure
• Injury Prevention and Management Foundation
Road Safety Advisory Council
• Partnership – Police, DIER, MAIB
• Reviewed every three years ( latest Review 2011)
• Funding – in excess of $33 million since 1996
• Driver education
• Additional Police personnel
• Automatic Number Plate Recognition
Road Safety – Serious Accidents
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
0
100
200
300
400
500
600
700
800
900
1,000
Dec-
96
Jun-
97
Dec-
97
Jun-
98
Dec-
98
Jun-
99
Dec-
99
Jun-
00
Dec -
00
Jun-
01
Dec-
01
Jun-
02
Dec-
02
Jun-
03
Dec-
03
Jun-
04
Dec-
04
Jun-
05
Dec-
05
Jun-
06
Dec-
06
Jun-
07
Dec-
07
Jun-
08
Dec-
08
Jun-
09
Dec-
09
Jun-
10
Dec-
10
Jun-
11
Num
ber O
f Reg
ister
ed V
ehic
les
Num
ber o
f Ser
ious
Cla
ims
Rece
ived
Serious Claims V's Registered Vehicles
Road Safety - Fatalities
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
06/07 07/08 08/09 09/10 10/11
Rat
e pe
r 1,0
00 V
ehic
les
Financial Year
Fatalities per 1,000 Vehicles
Infrastructure
• $1M per annum for three years from 2006/2007 for the State’s Black Spot Program.
• Programs included • installation of wire rope safety barriers at locations on
the Southern Outlet near Hobart, the Tasman Highway
at Mornington and on the Bass Highway (NW). • Major road upgrade in Hobart • A variety of road safety related remedial works to be
undertaken by nine (9) local authorities state-wide.
Injury Prevention and Management Foundation
Established as part of the Scheme legislation. Objectives : • promote measures that will reduce the number and severity
of accidents; • support measures that will lead to a better outcome for those
suffering injury; and • lend support to organisations dedicated to the care of persons
who have been seriously injured as the result of a motor accident.
Up to 1% of gross premium income is set aside for project funding. Injury Prevention and Management Foundation Charities Committee established in January 2002.