ACT GOVERNMENT

CTP Regulator Presentation

Lisa Holmes representing the

ACT CTP Regulator

Objectives of the ACT CTP Legislation

• Continue improving CTP insurance

• Encourage timely resolution of claims

• Promote the rehabilitation of injured motorists

• License and supervise insurers

• Promote competition in setting premiums

• Keep costs of insurance at affordable level

• Establish a register of claims

• Promote measures to reduce motor accidents

Functions of the CTP Regulator

• Regulate the licensing of CTP insurers

• Monitor the behaviour of CTP insurers re the obligations under the Act

• Monitor the efficiency of the ACT scheme

• Identify areas for amendment

• Promote public awareness of causes of motor accidents

CTP Premiums

• Aim is to ensure that the benefits each injured person is entitled to claim are fully funded

• Insurers must seek approval of premiums

• Regulator approves or rejects CTP premiums

• Ensure premiums meet the fully funded test and are not excessive

• External actuary provides advice to the Regulator about the requested premium

CTP & Lifetime Care Premiums

Comparison of CTP & Lifetime Care premiums across Australia (passenger vehicles) at 1 July 2017

Where Does Your CTP Premium Go?

* Does not include Government levies for the Lifetime Care and Support Scheme and the Regulator’s Levy

• The top 4 components on the Bar are claims costs

• Nominal defendant costs

are also largely claims costs

2016 Review of the CTP Act

“Despite the recent decreases in premium rates, the affordability of ACT CTP policies compares unfavourably with other jurisdictions. A large part of the relatively high premium rates can be attributed to the scheme design of the ACT scheme. Unlike comparable schemes in other jurisdictions, the ACT has no threshold for eligibility for Non-Economic Loss, nor caps on benefits. This generous scheme design, relative to other Common Law schemes, limits the potential for further future premium reductions.”

Section 275 Review of the ACT CTP Act

March 2016

Number of Claims Reported

2010 2011 2012 2013 2014 2015

750

800

850

900

950

1000

Accident Year

Nu

mb

er o

f cl

aim

s re

po

rts

Claims reported for Passenger vehicles

Reported Claim Numbers

by Injury Severity Profile

Minor injuries

Moderate injuries

Serious, severe, critical or maximum

2016-17 Finalised Claims Claims Reported 2010-2015

How long is it taking to finalise claims

• Depends on the circumstances of the accident and the severity of the injuries

• smaller claims on average settle in around 1.5 years

• larger claims over $500,000 on average settle in just over 4 year, (although some claims can take considerably longer).

Average Claims Size by Injury Severity

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

2009 2010 2011 2012 2013 2014 2015 2016

Accident Year

Minor Moderate & Serious

Claim Amounts by Heads of Damage

2016-17 Finalised Payments

Treatment & Care Costs Economic Loss

General Damages Legal & Investigative Costs

2011 accident year

Claim Amounts by Heads of Damage

by Claim Size

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< $5k $5k - $10k $10k - $75k $75k - $100k $100k - $200k $200k to $500k

$500k to $700k

$700k to $1m >$1m

% o

f C

laim

Am

ou

nt

General Damages Economic Loss Treatment and Care Legal and investigation costs

QUESTIONS?