Update from the UK deafness and asbestos working parties fro… · asbestos working parties Robert...

07/04/2016

1

Update from the UK deafness and

asbestos working parties Robert Brooks, Philip Jacob, Darren Goldthorpe

and John Wilson

07 April 2016

Colour palette for PowerPoint presentations

Dark blue

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Gold

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Mid blue

R64 G150 B184

Secondary colour palette

Primary colour palette

Light grey

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Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

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Purple

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Fuscia

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Red

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Orange

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Agenda

07 April 2016 2

• Deafness: Update on recent experience

• Deafness: The future - new loss quantification guidelines

• Asbestos: Survey 2015 vs. 2009 market estimate

• Asbestos: Mesothelioma deaths

• Asbestos: Key points and this year’s work

07/04/2016

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Bottle green

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Cyan

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Light blue

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Violet

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Update from the UK deafness working party

Recent claims experience – Philip Jacob

07 April 2016 3


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Cyan

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Light blue

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Violet

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Recent experience – monthly notifications

07 April 2016 4

-

2,000

4,000

6,000

8,000

10,000

12,000

Jan

-20

13

Feb

-20

13

Ma

r-2

01

3

Ap

r-2

01

3

Ma

y-2

01

3

Ju

n-2

01

3

Ju

l-2

01

3

Au

g-2

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3

Se

p-2

01

3

Oct-

20

13

No

v-2

01

3

De

c-2

01

3

Ja

n-2

01

4

Feb

-20

14

Ma

r-2

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4

Ap

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4

Ma

y-2

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n-2

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4

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Au

g-2

01

4

Se

p-2

01

4

Oct-

20

14

No

v-2

01

4

De

c-2

01

4

Ja

n-2

01

5

Feb

-20

15

Ma

r-2

01

5

Ap

r-2

01

5

Ma

y-2

01

5

Ju

n-2

01

5

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l-2

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5

Au

g-2

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5

Se

p-2

01

5

07/04/2016

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Bottle green

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Cyan

R0 G156 B200

Light blue

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Violet

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Purple

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Fuscia

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Red

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Orange

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Update from the UK deafness working party

Impact of the Quantification Guidelines on NIHL Claims –

Darren Goldthorpe

07 April 2016 5


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Assessing Disability – the present

07 April 2016 6

• The DHSS method of assessing disability is used:

• Hearing averaged at 1-3 kHz in each ear.

• Better ear weighted to reflect that it will ‘assist’ the worse hearing ear

and compared with expected age related loss

07/04/2016

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07 April 2016 7

• The DHSS method of assessing disability is used:

• Hearing averaged at 1-3 kHz in each ear.

• In claims the loss is compared with age related loss and

a reduction made.


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07 April 2016 8

07/04/2016

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Bottle green

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Cyan

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Light blue

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Violet

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Assessing Disability – the problems

07 April 2016 9

• Very arbitrary method and ignores the impact of other conditions, it

assumes all damage left after deduction for age is noise related.

Normal Hearing

Ignored Abnormal Hearing

attributed to noise


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Violet

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Assessing Disability – the future

07 April 2016 10

• The Lutman, Coles and Buffin Guidelines (the quantification

guidelines) were formally published in February 2016 but have been

available online since October.

http://onlinelibrary.wiley.com/doi/10.1111/coa.12569/abstract

• They make calculation of loss entirely dependent upon the level of

loss seen at 4 kHz.

• No damage at 4 kHz is going to make a significant overall loss

unlikely.

• Most people agree that it will lower level of loss.



07/04/2016

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07 April 2016 11

• Introduces a new comparison line for calculations

• The large gaps seen under the DHSS method will always reduce.


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07 April 2016 12

• In theory this should reduce disability, particularly where there is an

excess loss unlikely to arise as a result of noise damage


07/04/2016

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07 April 2016 13

• But there will be cases where the loss increases under the new

method.


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07 April 2016 14

• There are also gaps in the paper.

• Although it gives guidance on how to calculate loss on one ear it is

completely silent as to how a binaural calculation will be made.

• Professor Lutman has indicated that better ear weighting should

remain but has yet to commit to a methodology.

• This is a significant defect and will lead to uncertainty.

• There are already various arguments springing up, particularly

surrounding how the ‘better’ ear is determined.

07/04/2016

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Light blue

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Violet

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Red

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07 April 2016 15

• Which is the better ear – an extreme example:

• How any software determines ‘better ear’ will have a big

impact.

• Right Better:

0dB loss

• Left Better:

7dB Loss


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07 April 2016 16

• BC Legal have identified eight different methods of calculating

binaural disability – until a definitive method is selected market wide

analysis isn’t possible with any degree of certainty.

• Desktop Claims Supervisor application allows for analysis of resulting

loss across all of these methods.

• Will there be a flurry of De Minimis arguments?

• Bear in mind that a claim cannot be De Minimis if there is a diagnosis

of Noise Induced Tinnitus.

07/04/2016

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07 April 2016 17

• Expect further debate on late onset tinnitus.


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07 April 2016 18

• Expect further debate on late onset tinnitus.

07/04/2016

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07 April 2016 19

• We have seen previous evidence of coaching:

Just tell the solicitor 18

months, or he will not

take your case on.

Just tell the solicitor you

have ringing in your

ears, or he will not take

your case on.


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07 April 2016 20

• Assuming 3dB or less to qualify as De Minimis:

– Increase from 24 DHSS claims to 51 on Full Method

– Increase from 54 to 136 if tinnitus issues can be addressed

– Requires better ear determined at start of process.

07/04/2016

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Cyan

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Light blue

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07 April 2016 21

• Assuming 3dB or less to qualify as De Minimis:

– Increase from 24 DHSS claims to 42 on Full Method (-9)

– Increase from 54 to 114 if tinnitus issues can be addressed (-22)

– Better ear determined at end of process.


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07 April 2016 22

• Assuming 5dB or less to qualify as De Minimis

• Reduction from 238 (165+73) to 193 (134+59).

07/04/2016

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07 April 2016 23

• Choosing the right case to argue De Minimis using the LCB guidance

is essential:

– We do not want a case with accompanying tinnitus to start with

– We do not want a case with large losses at 4 kHz

– Ideal case


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07 April 2016 24

• Choosing the right case to argue De Minimis using the LCB guidance

is essential:

– We do not want a case with accompanying tinnitus to start with

– We do not want a case with large losses at 4 kHz

– Loss is only 3.93db but big loss at 4 kHz allows more argument.

07/04/2016

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07 April 2016 25

• There needs to be a thorough analysis of the cases, rushing off just

because a software package says 2 dB loss on the final output without

further thought could undermine the paper.

• A lot of Defendant’s are running De Minimis arguments badly.


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07 April 2016 26

07/04/2016

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07 April 2016 27


Dark blue

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Gold

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Cyan

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07 April 2016 28

• Expect new methods to be suggested

• *************screenshot from symposium – all frequency method*****

07/04/2016

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07 April 2016 29

• Experts largely instructed by Claimant’s have already prepared papers

seeking to discredit guidelines:


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07 April 2016 30

• Expect damages inflation from more serious attempts at claiming

hearing aids.

07/04/2016

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Update from the UK asbestos working party

Survey 2015 vs. 2009 market estimate

07 April 2016 31


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Insurance costs 2009 to 2014 (£m)

07 April 2016 32 Assuming the 2015 survey covers 80% of the insurance market

£0m

£500m

£1,000m

£1,500m

£2,000m

£2,500m

2009-2014 Projected(Scenario 23 & Scenario 2B)

2009-2014 Actual - ImpliedSettled (Notified No. claims xSettled average)

2009-2014 Actual - Incurred(Notified No. claims xIncurred average)

07/04/2016

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Light blue

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Violet

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Insurance costs 2009 to 2014 (£m)

07 April 2016 33 Assuming the 2015 survey covers 80% of the insurance market

£0m

£200m

£400m

£600m

£800m

£1,000m

£1,200m

£1,400m

£1,600m

£1,800m

Mesothelioma Asbestosis Lung Cancer Pleural Thickening

Scenario 23 / Scenario 2B Implied settled basis (Notified x Settled) Incurred basis


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72


Mesothelioma Number of claims (includes nils)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009 2010 2011 2012 2013 2014

Scenario 23* Survey

Average Claim Size (£) (includes nils)

07 April 2016 34

£0

£10,000

£20,000

£30,000

£40,000

£50,000

£60,000

£70,000

£80,000

£90,000

£100,000

2009 2010 2011 2012 2013 2014

Scenario 23* Settled basis

Incurred basis

* Assuming 23% nil rate based on 5yr weighted average from Survey 2015

07/04/2016

18


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72


Mesothelioma deaths

07 April 2016 35


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Mesothelioma deaths

Age-cohort model - Nielsen et al (2013) • No constructing exposure measures and no projecting of future populations.

• Inspired by the chain ladder methodology.

• Basically an age-period-cohort model using a GLM in R to fit parameters.

• Similar forecasts produced for age–cohort model and the age–period–cohort

model, so used age–cohort model.

• Simplifications taken : Discards cohorts younger than 1966, no future cohorts

and only projecting ages 35–89.

• Provides a simple benchmark method, checking the robustness of other more

sophisticated methods.

07 April 2016 36

07/04/2016

19


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Mesothelioma deaths Actual experience up to 2013 and all recent projections

07 April 2016 37

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

GB

male

meso

thelio

ma d

eath

s (

ag

es 2

0-8

9)

Actual HSE Non-clearence (2015)

Nielsen et al - AC (2015)* AWP (2009) Adjusted HSE

* A simple benchmark for mesothelioma projection for Britain - Jens Nielsen et al - September 2015


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Mesothelioma deaths Actual experience up to 2013 and rescaled projections

07 April 2016 38

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

GB

male

meso

thelio

ma d

eath

s (

ag

es 2

0-8

9)

Actual HSE Non-clearence (2015)

Nielsen et al - AC (2015)* AWP (2009) Adjusted HSE

* A simple benchmark for mesothelioma projection for Britain - Jens Nielsen et al - September 2015

07/04/2016

20


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Mesothelioma deaths Distribution of actual age by year of death

07 April 2016 39

67 80 66 86 74 94 108 127 146 175 182 174 195 206 122 171 158 206 227 233 239 270 277 315 312

353 404 388 248 309

278

314 315 324 341

368 373 404 407

397 434 447 289 295 334

273 323 321 310

314 372 397 380

363 433 416

224 243 259

276 287 295 315 332

311 292 313 286

351 346 218 215 230 204 226 237

220 223 225 198 216 200 161 163 226 261 233 224 198 228 176 159 139 133 114 115 92 83

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Pro

po

rtio

n o

f G

B m

ale

meso

thelio

ma d

eath

s

90+ 85-89 80-84 75-79 70-74 65-69 60-64 20-59


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Mesothelioma deaths Average age: HSE (2015)* vs. experience

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

15%

20-64 65-69 70-74 75-79 80-84 85-89

Perc

en

tag

e d

evia

tio

n :

(A

-E)/

E

Age band

2008 2009 2010 2011 2012 2013

07 April 2016 40

2008 2009 2010 2011 2012 2013

A-E (25) 4 (15) (78) 81 42

(A-E)/E (1%) 0% (1%) (4%) 4% 2%

* AWP recreation of HSE central estimate less than 0.3% difference

07/04/2016

21


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72


Key points and plan for next year

07 April 2016 41


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Key points and this year’s work

Key points • After 5 years our market estimates are reasonably in line at the total level.

• However we are beginning to see deviations from our assumptions.

– The propensity for mesothelioma sufferers to make a claim.

– Age of mesothelioma claimants.

• GB male mesothelioma deaths still to peak

– Key questions still: When will deaths peak? How will they run off from the peak?

– HSE recalibrated their “non-clearance” model. The peak is one year later (in 2016)

and 1% higher (at 2,008 deaths) than their 2013 projection.

– Nielsen et al (2015) has a peak in 2017 of 2,079 deaths.

– AWP models based on deaths up to 2008.

07 April 2016 42

07/04/2016

22


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

Key points and this year’s work

What is the AWP doing? • Investigating initial findings and potentially a new insurance market estimate

for GIRO 2016.

– Focus on the estimation of mesothelioma deaths and propensity for mesothelioma

sufferers to make a claim.

– Looking at recreating the Nielsen et al and HSE 2015 models.

• Continue to collect market data to support a new market estimate.

– Announced via the GI newsletter and on the IFoA website.

– Deadline is 22nd April.

07 April 2016 43


Dark blue

R17 G52 B88

Gold

R217 G171 B22

Mid blue

R64 G150 B184



Light grey

R63 G69 B72

Pea green

R121 G163 B42

Forest green

R0 G132 B82

Bottle green

R17 G179 B162

Cyan

R0 G156 B200

Light blue

R124 G179 B225

Violet

R128 G118 B207

Purple

R143 G70 B147

Fuscia

R233 G69 B140

Red

R200 G30 B69

Orange

R238 G116 29

Dark grey

R63 G69 B72

07 April 2016 44

Expressions of individual views by members of the Institute and Faculty of

Actuaries and its staff are encouraged.

The views expressed in this presentation are those of the presenter.

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