CTP Schemes Comparison - Actuaries Institute › Library › 1530.2 CTP Schemes Compa… · Scheme...
Transcript of CTP Schemes Comparison - Actuaries Institute › Library › 1530.2 CTP Schemes Compa… · Scheme...
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CTP Schemes Comparison
CTP Working Group
Paul DriessenAaron CutterNeil DonlevySusan Ley
Martin Stollwitzer
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Scheme Background – Underwriting
Privately Underwritten
Source: 2007/08 annual reports for eachScheme (approx premiums)
ICWA$400m
MAC$400m
MAC / TIO$50m
TAC$1.1bMAIB
$125m
ACC$650m
MAIC$1.0b
MAA$1.2b
ACT$100m
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New South Wales – Recent Changes
Source: 2007/08 annual reports for MAA and MAIC
• MACA 2006
• Blameless accidents receivecompensation from 1 Oct 2007
• LTCS available to adults from 1 Oct 2007
• MACA 2007
• Increased ANF threshold to $5,000 from$500
• ANF now allows for past loss of earnings
• 2009 amendments
• Bulk billing extended to any personinjured in a motor vehicle accident
CIC
Allianz
7%
Zurich
7%
GIO
8%
Allianz
16%
AAMI
15%QBE
12%
NRMA
36%
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Queensland – Current Changes
Source: 2007/08 annual reports for MAA and MAIC
• Bill designed to introduce indexation togeneral damages limits and caps
• Other changes, including recognition of:
• Loss of consortium
• Gratuitous services
Suncorp
48%
RACQI
15%
Allianz
22%
NRMA
5%
AAMI
5%
QBE
5%
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ACT – Recent Changes
NRMA100%
• Changes designed to improve theefficiency of the Scheme
• e.g. caps applied to legal feesfor small claims
• Regulatory focus on introducingcompetition
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• Removal of common law rights
• Greater access to attendant carebenefits
• Non-medical benefits may bereduced in certain circumstances
• e.g. not wearing helmet
Northern Territory – Recent Changes
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• Always ongoing refinements
• For example:
• WA - payments for transporting injuredpersons
• Victoria - safety net income benefit forsevere injuries (Nov 2007)
• Tasmania - counselling benefits now paid
Other States – Recent Changes
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• Injury Prevention, Rehabilitation, and CompensationAct (the ‘IPRC Act’)
• For example - expanded eligibility and entitlementprovisions for weekly compensation
• Injury Prevention, Rehabilitation,and Compensation Amendment Billand the “Stock Take”.We’ll know more in February 2010
New Zealand – Recent Changes
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Scheme Background – Types
No fault
Common law
Common law with some no fault access
No fault with some (restricted) common law access
No fault with common law
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Registered Vehicles per Person
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Reporting Year
Re
gis
tere
dV
eh
icle
sp
er
Pe
rso
n
NSW Vic Qld SA WATas NT ACT Aust NZ
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
0
100
200
300
400
500
600
700
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Nu
mb
er
of
Fa
taliti
es
NSW VIC QLD SA WA TAS NT ACT
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Improvement in Fatality Rate - Ten Year Exponential Fit
Improvement Rate
3.5% p.a.
Improvement rate
5.5% p.a.
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
2.5
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Accident Year
Fa
taliti
es
pe
r1
0,0
00
Ve
hic
les
Australia New Zealand
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Fatality Rate Improvement - Ten Year Exponential Trend (1998-2007)
0%
2%
4%
6%
8%
10%
12%
Fra
nce
Port
ugal
Gre
ece
Icela
nd
Luxem
burg
Sw
itzerland
Spain
Neth
erlands
Irela
nd
Nth
.Ir
ela
nd
Norw
ay
Pola
nd
Germ
any
Denm
ark
Belg
ium
Austr
iaF
inla
nd
Slo
venia
Sw
eden
Czech
Rep.
Hungary
Gre
atB
rita
in
South
Kore
aJapan
Isra
el
US
AC
anada
New
Zeala
nd
Austr
alia
AC
TS
AN
SW
Vic NT
WA
Qld
Tas
An
nu
alIm
pro
ve
me
nt
Vehicle (per 10,000)
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Fatality Rate Improvement - Ten Year Exponential Trend (1998-2007)
0%
2%
4%
6%
8%
10%
12%
Fra
nce
Port
ugal
Gre
ece
Icela
nd
Luxem
burg
Sw
itzerland
Spain
Neth
erlands
Irela
nd
Nth
.Ir
ela
nd
Norw
ay
Pola
nd
Germ
any
Denm
ark
Belg
ium
Austr
iaF
inla
nd
Slo
venia
Sw
eden
Czech
Rep.
Hungary
Gre
atB
rita
in
South
Kore
aJapan
Isra
el
US
AC
anada
New
Zeala
nd
Austr
alia
AC
TS
AN
SW
Vic NT
WA
Qld
Tas
An
nu
alIm
pro
ve
me
nt
Vehicle (per 10,000) Population (per 100,000)
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Fatality Rate Improvement - Ten Year Exponential Trend (1998-2007)
0%
2%
4%
6%
8%
10%
12%F
rance
Port
ugal
Gre
ece
Icela
nd
Luxem
burg
Sw
itzerland
Spain
Neth
erlands
Irela
nd
Nth
.Ir
ela
nd
Norw
ay
Pola
nd
Germ
any
Denm
ark
Belg
ium
Austr
iaF
inla
nd
Slo
venia
Sw
eden
Czech
Rep.
Hungary
Gre
atB
rita
in
South
Kore
aJapan
Isra
el
US
AC
anada
New
Zeala
nd
Austr
alia
AC
TS
AN
SW
Vic NT
WA
Qld
Tas
An
nu
alIm
pro
ve
me
nt
0
1
2
3
4
5
6
7
8
Fa
talit
ies
pe
r1
0,0
00
Ve
hic
les
Annual Improvement (LHS) 1998 Fatalities (RHS)
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Fatality Rate Improvement - Ten Year Exponential Trend (1998-2007)
0%
2%
4%
6%
8%
10%
12%F
rance
Port
ugal
Gre
ece
Icela
nd
Luxem
burg
Sw
itzerland
Spain
Neth
erlands
Irela
nd
Nth
.Ir
ela
nd
Norw
ay
Pola
nd
Germ
any
Denm
ark
Belg
ium
Austr
iaF
inla
nd
Slo
venia
Sw
eden
Czech
Rep.
Hungary
Gre
atB
rita
in
South
Kore
aJapan
Isra
el
US
AC
anada
New
Zeala
nd
Austr
alia
AC
TS
AN
SW
Vic NT
WA
Qld
Tas
An
nu
alIm
pro
ve
me
nt
0
1
2
3
4
5
6
7
8
Fa
talit
ies
pe
r1
0,0
00
Ve
hic
les
Annual Improvement (LHS) 2007 Fatalities (RHS)
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Fatalities
Source: International Road Safety Comparisons: The 2007 Report (July 2009), Department of Infrastructure, Transport, Regional Development and Local Government
Fatality Rate Improvement - Ten Year Exponential Trend (1998-2007)
0%
2%
4%
6%
8%
10%
12%F
rance
Port
ugal
Gre
ece
Icela
nd
Luxem
burg
Sw
itzerland
Spain
Neth
erlands
Irela
nd
Nth
.Ir
ela
nd
Norw
ay
Pola
nd
Germ
any
Denm
ark
Belg
ium
Austr
iaF
inla
nd
Slo
venia
Sw
eden
Czech
Rep.
Hungary
Gre
atB
rita
in
South
Kore
aJapan
Isra
el
US
AC
anada
New
Zeala
nd
Austr
alia
AC
TS
AN
SW
Vic NT
WA
Qld
Tas
An
nu
alIm
pro
ve
me
nt
0
1
2
3
4
5
6
7
8
Fa
taliti
es
pe
r1
0,0
00
Ve
hic
les
Annual Improvement 1998 Fatalities 2007 Fatalities
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Ultimate Claim Frequency Trend
Source: Claims data provided by each Scheme
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imF
req
ue
nc
y(R
ela
tiv
eto
19
96
)
NSW VIC QLD SA WA TAS NT ACT NZ
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Ultimate Claim Frequency Trend
Source: Claims data provided by each Scheme
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imF
req
ue
nc
y(R
ela
tiv
eto
19
96
)
NSW VIC QLD SA WA TAS NT ACT NZ
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Ultimate Claim Frequency Trend
Source: Claims data provided by each Scheme
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imF
req
ue
nc
y(R
ela
tiv
eto
19
96
)
NSW VIC QLD SA WA TAS NT ACT NZ
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Ultimate Claim Frequency Trend
Source: Claims data provided by each Scheme
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imF
req
ue
nc
y(R
ela
tiv
eto
19
96
)
NSW VIC QLD SA WA TAS NT ACT NZ
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Ultimate Claim Frequency Trend
Source: Claims data provided by each Scheme
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imF
req
ue
nc
y(R
ela
tiv
eto
19
96
)
NSW VIC QLD SA WA TAS NT ACT NZ
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Average Claim Size Trend
Source: Claims data provided by each Scheme
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imS
ize
(Re
lati
ve
to1
99
6)
NSW VIC QLD SA WA TAS ACT
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Average Claim Size Trend
Source: Claims data provided by each Scheme
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Accident Year
Cla
imS
ize
(Re
lati
ve
to1
99
6)
NSW VIC QLD SA WA TAS ACT
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Affordability – Premiums as % AWE
0%
10%
20%
30%
40%
50%
60%
70%
80%
97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10
Underwriting Year
%o
fA
vera
ge
Weekly
Earn
ing
s
NSW VIC QLD SA WA TAS NT ACT NZ
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2009/10 Premiums
Common law
Common law with some no fault access
No fault with some (restricted) common law access No fault
No fault with common law
0
50
100
150
200
250
300
350
400
450
NSW QLD SA WA ACT VIC TAS NT NZ
An
nu
alP
rem
ium
($)
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Premium Setting
• Similarities:
• Discounted central estimate of claims and expenses
• Allowance for profit margin/risk margin
• Actuarial involvement
• Differences:
• Fund view vs. Prospective accident year view
• Discount rate
• Actuarial guidance
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Funding Ratio
Source: Scheme Annual Reports
0%
20%
40%
60%
80%
100%
120%
140%
160%
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Reporting Year
As
se
ts/L
iab
iliti
es
TAC (VIC) MAC (SA) ICWA (WA)
MAIB (TAS) MAC (NT) ACC (NZ)
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Funding Ratio
Source: Scheme Annual Reports
0%
20%
40%
60%
80%
100%
120%
140%
160%
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Reporting Year
As
se
ts/L
iab
ilit
ies
TAC (VIC) MAC (SA) ICWA (WA) MAIB (TAS)
MAC (NT) ACC (NZ) ACC Pre 1999 ACC Post 1999
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Underwriting Result
Source: Scheme Annual Reports
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Reporting Year
%o
fN
et
Ea
rne
dP
rem
ium
TAC (VIC) MAC (SA) ICWA (WA)
MAIB (TAS) MAC (NT) ACC (NZ)
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Profit (Pre Tax)
Source: Scheme Annual Reports
-250%
-200%
-150%
-100%
-50%
0%
50%
100%
150%
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Reporting year
%o
fN
et
Ea
rne
dP
rem
ium
TAC (VIC) MAC (SA) ICWA (WA)
MAIB (TAS) MAC (NT) ACC (NZ)
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Discounting Effect
Source: Scheme Annual Reports
0
2
4
6
8
10
12
14
16
18
20
MAC (SA)
73%
MAIB (TAS)
19%
TAC (VIC)
29%
MAC (NT)
48%
ACC (NZ)
32%
ICWA (WA)
74%
Ce
ntr
alE
sti
ma
teL
iab
ilit
ies
($B
illio
ns
)
0
2
4
6
8
10
12
14
16
18
20
We
igh
ted
Av
gD
isc
.M
ea
nT
erm
Undiscounted CE: 2007-2008 (LHS) Discounted CE: 2007-2008 (LHS)
Mean Term (2007-08) (RHS)
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Investment Mix
Source: Scheme Annual Reports
ACC (NZ)
MAC (NT)
TAC (VIC)
ICWA (WA)MAC (SA)
MAIB (TAS)
0
5
10
15
20
25
0% 20% 40% 60% 80% 100%
%Asset Base Invested in Growth Assets
Me
an
Te
rm(Y
ea
rs)
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Risk Margins (75% PoS)
Source: Scheme Annual Reports (SA has been restated to 75% level from 80% level shown in Annual Report)
TAC (VIC)
ICWA (WA)
MAC (NT)
ACC (NZ)
MAC (SA)
MAIB (TAS)
0
5
10
15
20
25
0% 5% 10% 15% 20% 25%
Risk Margin (as %of Central Estimate)
Me
an
Te
rm(Y
ea
rs)
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• Schemes change continually
• General trends
• Premiums have been kept affordable
• GFC has impacted funding positions
• Schemes are all very different
Summary
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• Can frequency continue to fall?
• Further moves to no-fault?
• Harmonisation of benefits?
• Periodic payments vs. lump sums?
• Investment mix changes (reduce volatility)?
• Premium levels?
Questions for the Future