Personal Injury Claims

Transcription

1 Personal Injury Claims Improving consistency, accuracy & transparency of settlements Mark Strang ACII, Chartered Insurance Practitioner Business Development Manager, ISO

2 Agenda Personal Injury Claims Background Applicable lines of business Compensation Culture something new? Why improve consistency, accuracy and transparency? Improving consistency, accuracy and transparency How technology can help The future )

3 ISO Background Provider of data, analytics and decision-support products designed to help customers measure, manage and reduce risk Run the anti-fraud database in USA (250,000 new claims per day) Catastrophe modelling (AIR Worldwide) Telematics analytics (Driving DNA) Leading personal injury evaluation tool in UK (Claims Outcome Advisor) used by more than 20 UK insurers (also used in USA, Ireland and Israel) ISO established ,500 employees HQ in USA, offices in Europe, Beijing, Hyderabad, Kathmandu, Singapore & Tokyo $1.5bn turnover Quoted on NASDAQ: ISO is part of Verisk Analytics (VRSK)

4 Personal Injury Claims Motor Third Party Liability Employees Compensation (EC) Also known as Employers Liability, Workers Compensation, Work Injury Compensation Public Liability Product Liability Household Liability Travel Insurance Liability

5 Compensation Culture China 3000 BCE first risk management by merchants splitting cargo Kent, England 600 CE Æthelberht's law - oldest surviving English law code and oldest Anglo-Saxon text of any kind in existence 2000 CE Court Settlement Guidelines Singapore England & Wales

6 Compensation Culture (A) Neck Injuries There is a very wide range of neck injuries. Many are found in conjunction with back and shoulder problems. (a) Severe (i) Neck injury associated with incomplete paraplegia or resulting in permanent spastic quadriparesis or where the injured person, despite wearing a collar 24 hours a day for a period of years, still has little or no movement in the neck and suffers severe headaches which have proved intractable. In the region of 97,500 (ii) Injuries which give rise to disabilities which fall short of those in (a)(i) above but which are of considerable severity; for example, permanent damage to the brachial plexus. 43,000 to 86,000 (iii) Injuries causing severe damage to soft tissues and/or ruptured tendons. They result in significant disability of a permanent nature. The precise award depends on the length of time during which the most serious symptoms are ameliorated, and on the prognosis. In the region of 36,000 (iv) Injuries such as fractures or dislocations which cause severe immediate symptoms and which may necessitate spinal fusion. They leave markedly impaired function or vulnerability to further trauma, and some limitation of activities. 16,400 to 21,600 (b) Moderate (i) Cases involving whiplash or wrenching-type injury and disc lesion of the more severe type resulting in cervical spondylosis, serious limitation of movement, permanent or recurring pain, stiffness or discomfort and the possible need for further surgery or increased vulnerability to further trauma. 9,000 to 16,400 (ii) Injuries which may have exacerbated or accelerated some pre-existing unrelated condition. There will have been a complete recovery or recovery to 'nuisance' level from the effects of the accident within a few years. This bracket will also apply to moderate whiplash injuries where the period of recovery has been fairly protracted and where there remains an increased vulnerability to further trauma. 5,150 to 9,000 (c) Minor Minor soft tissue and whiplash injuries and the like where symptoms are moderate: (i) and a full recovery takes place within about two years; 2,850 to 5,150 (ii) with a full recovery between a few weeks and a year. 875 to 2,850

7 Why improve consistency and accuracy? Guidelines are useful, but. Based on court awards Provide ranges, some of which are quite wide Difficult to use for multiple injuries, e.g. neck and lumbar sprain, chest wall contusion, left knee laceration Still doesn t control what a handler actually puts forward as an offer

8 Why improve consistency and accuracy? To avoid overpayment (leakage) To avoid under valuation more likely to litigate and attract court costs To prove treating customers fairly and consistently To provide earlier identification of severe cases and more accurate on-going reserving

9 Why improve consistency? Before GDs V COA High, Closed Claim data 4000 Actual GDs COA High

10 Why improve consistency? After General Damages Settlement vs COA High Settlement Amount COA High

11 Why improve consistency? Before.. 50% 45% 40% 35% Frequency Distribution of Settlement to COA High Ratio Frequency 30% 25% 20% 15% 10% 5% 0% More Ratio of Settlement to COA High

12 Why improve consistency? After.. 50% 45% 40% 35% Frequency Distribution of Settlement to COA High Ratio Frequency 30% 25% 20% 15% 10% 5% 0% More Ratio of Settlement to COA High

13 Why improve transparency? Management Information (MI) to objectively and accurately monitor Claims handler performance Claimant lawyer behaviour Medical expert (defendant and plaintiff) prognoses Severity of claims matching claims handler s experience To identify changes in injury / complication frequency To identify mismatches of: treatments to injuries expected recovery to that in prognosis

14 How to improve accuracy and consistency Utilising a quantum evaluation tool Claims handler enters pertinent information into system Injuries, treatments, complications, pre-existing conditions Prognosis: recovery progress, permanent conditions Based on object model of human body, system derives combined severity (index) Converts severity to HK$, S$, A$ etc amount based on individual companies previous settlement patterns

15 How technology can help Medical ICD-9 18,000 available codes Injuries Treatments Complications Pre-Existing Conditions Prognosis Medical Recovery Future Treatments Permanent Conditions Disability Ratings Loss Of Use Of Occupational Activity Restrictions Occupational Capacity Assessment Report General Damages Special Damages Claimant Impact Rehabilitation Inconsistencies Negotiation advice

16 How technology can help

17 How technology can help Structure - provides for consistent, objective consideration of medical evidence Confidence - provides assessment based on other cases of the same severity. Faster settlements and best practice across organisation Back-up - provides reasons for assessment To smooth staff turnover and training needs - medical encyclopedia

18 How technology can help System ranks all injuries in order of relative severity and understands the relationship of one injury (or combinations of injuries) to the others Increasing Severity System is calibrated by assigning a value (HK$, S$, A$,,, US$ etc) to severity; not necessary to have an example of each type of injury and can be easily modelled to different company s/country s settlement levels

19 How technology can help Expresses the disability % to a body part as a function of the number of days since the injury Can be extended or contracted based on additional information (e.g. claimant age, gender and prognoses) 100% Impairment 0% 0 1 Recovery (Days)

20 How technology can help Web-based application running in Internet Explorer.Net Most customers have it running stand-alone, although some have interfaced via XML web services to avoid re-keying some data items SQL server Hosted by ISO, or iinstalled within customer s infrastructure No other third party software required

21 How technology can help ҡ

22 How technology can help: Other components Case In Point Comparable cases and lawyer-specific litigation risk analytics Liability Advisor Consistently evaluates contributory negligence (comparative 倰 ҡ liability) Subrogation Advisor Maximises recovery opportunities using advanced qualifying methods and text mining Return to Work Module Claimant Return to Work plans specific to an individual s occupation

23 How technology can help: Liability Advisor ң

24 The future Immediate (as reported by the HKFI) Increases in common law claims Higher levels of damages More claims involving psychiatric complications Increasing number of fraudulent claims Automated, electronic settlement ҡ of straightforward claims Merging of data and predictive analytics Telematics data + camera data + injury data Research-based injury likelihood predictive tools e.g. WitKit from Thatcham (used by Korean insurers) Further into the future Underwriting changes as autonomous vehicles introduced Far fewer personal injury claims with the widespread use of autonomous vehicles?

25 Thank you ң Mark Strang ACII, Chartered Insurance Practitioner