$6,347 17% $400K 45% Top 5 Class Codes * $17.5 Million Plan Premium in Force. VCAP Service Redirected $42K. Premium. 3Q Market Share.

Transcription

1 # of Policies/Applications West Virginia Residual Market Performance Report Top 5 Class Codes * 7711 Firefighters - Volunteer (23.3%) 5645 Carpentry Construction (4.8%) 2702 Logging - Non Mechanized (4.2%) 7228 Trucking-Local Hauling (4.1%) 8380 Automobile Service Center (2%) $17.5 Million Plan Premium in Force 2% *By policy count Total Policy Count 1% 0.6K 0.7K 0.7K 0.5K 0.3K 0.2K 0.2K 0.3K Q Q Q Q Policies Applications VCAP Service Redirected $42K Premium Savings from Redirected Premium 6% Avg Policy Size $6,347 17% Policies with Premium 100K+ 95.5% 3Q Market Share Voluntary Market Residual Market $400K 45% 4.5% Third Quarter 2015 policy and estimated annual premium data, compared to Third Quarter Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved.

2 Table of Contents Executive Summary... 1 Total Applications Bound... 2 Total Application Premium Bound... 3 Residual Market Total Policy Counts... 4 Residual Market Total Premium Volume... 4 Residual Market Total Policies and Premium in Force... 5 Total Premium Distribution by Size of Risk... 6 Residual Market Top 10 Classification Codes by Policy Count... 7 Residual Market Top 10 Classification Codes by Premium Volume... 7 Residual Market Share... 8 Voluntary Coverage Assistance Program... 9 Collections/Indemnification West Virginia Residual Market Reinsurance Pool Booked Loss Ratio West Virginia Residual Market Reinsurance Pool Ultimate Net Written Premium West Virginia Residual Market Reinsurance Pool Net Operating Results Glossary of Terms Copyright 2015 National Council on Compensation Insurance, Inc. This material is owned by NCCI and is protected by copyright law. NCCI will seek all appropriate legal remedies for the unauthorized use, sale, reproduction, distribution, preparation of derivative works, transfer or assignment of this material, or any part thereof. NCCI makes no representation or warranty, express or implied, as to any matter whatsoever, including but not limited to the accuracy of any information, product, or service furnished hereunder. The recipient of this material is subject to any license agreement that governs the use of this information and subscribes to and utilizes the information as is.

3 Executive Summary NCCI, as Pool and Plan Administrator of the West Virginia Workers Compensation Insurance Plan, is pleased to provide the Third Quarter 2015 Residual Market State Activity Report. Readers will notice an update of the key measurement factors and issues relating to the operation of the West Virginia Plan. NCCI has enhanced our data reporting tools to provide a more accurate picture of what is happening in your state. If you have any questions or comments about this report, please feel free to contact any of the individuals listed below. David Benedict, State Relations Executive (804) Althea Keen, Business Operations Analyst (561) Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 1

4 Total Applications Bound 2012 vs vs vs The number of applications both new and churn that are assigned to a Servicing Carrier or a Direct Assignment Carrier (if applicable). 1,200 1, Applications Bound st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 2

5 $1,655,795 $6,403,671 West Virginia Residual Market Performance Report Total Application Premium Bound 2012 vs vs vs The total estimated premium on bound applications both new and churn that are assigned to a Servicing Carrier or a Direct Assignment Carrier (if applicable). $12,000,000 $10,000,000 Premium Bound $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 3

6 Residual Market Total Policy Counts Third Quarter Data for Policies Reported through September 30, 2015 Total number of all Assigned Risk Plan policies with effective dates during the calendar period listed above Number of Policies Policy Year Residual Market Total Premium Volume Third Quarter Data Reported through September 30, 2015 Total amount of all Assigned Risk Plan premium with effective dates during the calendar period listed above. $5,696,162 $5,319,732 $6,000,000 $5,000,000 $4,519,408 $4,354,205 $4,000,000 Premium Volume $3,000,000 $2,000,000 $1,000,000 $ Policy Year Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 4

7 Residual Market Total Policies and Premium in Force As of September 30, 2015 compared to prior year Total number of Assigned Risk Plan policies and estimated premium volume in force reported as of the date listed above. The other exhibits in this report describe quarterly and year-to-date data vs # 2014 vs % Policy Count 2,363 2, % Premium Volume $17,091,689 $17,511,901 $420, % Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 5

8 Total Premium Distribution by Size of Risk Third Quarter Data Reported through September 30, 2015 The total number of Assigned Risk Plan policies reported to NCCI by Direct Assignment and Servicing Carriers in a premium range as of the date listed above. % of Total Total State % of Total Average Premium Interval Policy Count Policies Premium Premium Premium $ % $319,970 7% $1,015 $ % $561,820 13% $3,511 $ % $750,827 17% $6,764 $ % $850,379 20% $13,715 $ % $848,467 19% $31,424 $ % $613,690 14% $68,187 $ % $163,113 4% $163,113 $ % $245,939 6% $245,939 Total % $4,354, % $6,347 Third Quarter 2014 Data for Comparison % of Total Total State % of Total Average Premium Interval Policy Count Policies Premium Premium Premium $ % $288,880 5% $989 $ % $598,281 11% $3,716 $ % $878,210 16% $6,703 $ % $811,626 15% $13,756 $ % $1,503,948 27% $32,694 $ % $650,281 12% $65,028 $ % $528,294 10% $132,073 $ % $210,192 4% $210,192 Total % $5,469, % $7,769 Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 6

9 Residual Market Top 10 Classification Codes by Policy Count Third Quarter Data Reported through September 30, 2015 The top 10 governing class codes by total policy count policies issued by Servicing Carriers and Direct Assignment Carriers in this state as of the date listed above. Rank Code Description Policy Count % of Policies Firefighters & Drivers - Volunteer % Carpentry Construction Of Residential Dwellings Not Exceeding Three Stories In Height % Logging Or Tree Removal - Non Mechanized Operations % Trucking-Local Hauling Only-& Drivers % Automobile Service Or Repair Center & Drivers % Bar Discotheque Lounge Nightclub Or Tavern % Excavation & Drivers % Logging Or Tree Removal - Mechanized Equipment Operators % Ambulance Service Companies And Ems (Emergency Medical Service) Providers & Drivers % Stable Or Breeding Farm & Drivers % Residual Market Top 10 Classification Codes by Premium Volume Third Quarter Data Reported through September 30, 2015 The top ten governing class codes by premium volume written on total policies issued by Servicing Carriers and Direct Assignment Carriers in this state as of the date listed above. Rank Code Description Premium % of Premium Firefighters & Drivers - Volunteer $755, % Logging Or Tree Removal - Non Mechanized Operations $265, % Plastics Manufacturing: Molded Products NOC $255, % Ambulance Service Companies And Ems (Emergency Medical Service) Providers & Drivers $171, % Forging Work-Drop Or Machine $163, % Logging Or Tree Removal - Mechanized Equipment Operators $160, % Trucking-Local Hauling Only-& Drivers $145, % Nursing-Home Health Public And Traveling-All Employees $128, % Trucking-Long Distance Hauling-& Drivers $123, % Carpentry Construction Of Residential Dwellings Not Exceeding Three Stories In Height $115, % Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 7

10 Residual Market Share Third Quarter Data through September 30, 2015 States estimated residual market share compared to the voluntary market share by written premium. 95.5% Voluntary Market Residual Market 4.5% Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 8

11 Voluntary Coverage Assistance Program Third Quarter Data through September 30, 2015 The volume of assigned risk applications redirected to the voluntary market through NCCI s VCAP Service. The following shows the results VCAP Service has provided during Third Quarter Number of Applications Reviewed by VCAP Service 259 Associated Premium for Applications Reviewed $1,697, Number of VCAP Service Matches 81 VCAP Service Matches as a % of Applications Reviewed 31.27% Number of VCAP Service Offers 4 VCAP Service Offers as a % of Matches 4.94% Number of Confirmed VCAP Service Policies 4 Confirmed VCAP Service Policies as a % of Applications Reviewed 1.54% Redirected Assigned Risk Premium $41, Associated Voluntary Market Premium $39, Savings $2, Average Savings per Application $ Savings as a % of Redirected Assigned Risk Premium 5.59% Redirected Premium as a % of Associated Premium for Applications Reviewed by VCAP Service 2.46% Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 9

12 Collections/Indemnification The following shows a comparison of gross written premium and uncollectible premium reported in West Virginia for Policy Years , obtained through NP-4 and NP-5 reports including traumatic and black lung claims, evaluated through Second Quarter Policy Year Gross Written Premium Uncollectible Premium Percentage 2011 $10,362,931 $160, % 2012 $14,796,466 $160, % 2013 $17,620,607 $243, % 2014 $18,778,274 $100, % 2015 $9,133,888 * N/A * The uncollectible premiums provided are reported by the servicing carriers on a quarterly basis. Uncollectible premium is generally reported up to 24 months after the policy expiration date due to audit, billing, and collection requirements. Therefore, the uncollectible premium data has not yet developed for the more recent policy years. Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 10

13 Ultimate Premium Percentage West Virginia Residual Market Performance Report West Virginia Residual Market Reinsurance Pool Booked Loss Ratio Policy Year Financial Results through 2nd Quarter 2015 for 2014 and prior years* The ratio of total incurred losses to total earned premiums in a given period, in this state, expressed as a percentage. 150% Booked Loss Ratio 100% 73.3% 54.7% 56.2% 84.5% 50% 0% West Virginia Residual Market Reinsurance Pool Ultimate Net Written Premium (Projected to Ultimate) (000 s) Policy Year Financial Results through 2nd Quarter 2015 for 2014 and prior years* The premium charged by an insurance company for the period of time and coverage provided by an insurance contract in this state. $25,000 $20,000 $15,000 $10,000 $10,203 $14,636 $17,353 $18,363 $5,000 $ Policy Year * Third Quarter 2015 data will be available the end of January 2016 due to the timing of data reporting. Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 11

14 Policy Year Incurred Losses Including IBNR (000)'s West Virginia Residual Market Performance Report West Virginia Residual Market Reinsurance Pool Net Operating Results (Projected to Ultimate) Incurred Losses Policy Year Financial Results through 2nd Quarter 2015 for 2014 and prior years* Policy year incurred losses reflect paid losses, case reserves and IBNR reserves for policies written in a particular policy year in that state. $20,000 $15,517 $15,000 $10,000 $7,479 $8,006 $9,752 $5,000 $ Policy Year West Virginia Residual Market Reinsurance Pool Net Operating Results (Projected to Ultimate) Estimated Net Operating Gain/(Loss) (000 s) Policy Year Financial Results through 2nd Quarter 2015 for 2014 and prior years* The financial statement presentation that reflects the excess of earned premium over incurred losses, less all operating expenses, plus all investment income in that state ($2,325) $2, $2, ($863) -$3,000 -$2,000 -$1,000 $0 $1,000 $2,000 $3,000 $4,000 Operating Gain/(Loss) (000's) * Third Quarter 2015 data will be available the end of January 2016 due to the timing of data reporting. Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 12

15 Glossary of Terms Applications Bound The applications that are actually assigned to a Servicing Carrier or Direct Assignment Carrier (if applicable). Earned Premium or Premiums Earned That portion of written premiums applicable to the expired portion of the time for which the insurance was in effect. When used as an accounting term, premiums earned describes the premiums written during a period, plus the unearned premiums at the beginning of the period, less the unearned premiums at the end of the period. In Force (Policies/Premium) All policies and associated estimated premium that are current as of a given date. Incurred But Not Reported (IBNR) Pertaining to losses where the events that will result in a loss, and eventually a claim, have occurred, but have not yet been reported to the insurance company. The term may also include bulk reserves for estimated future development of case reserves. Premium Bound The total estimated annual premium on bound applications. Residual Market Share The ratio of assigned risk premium (pool plus direct assignment) to the total net direct written premium. Underwriting Gain/ (Loss) The financial statement presentation that reflects the excess of earned premium over incurred losses. VCAP Service Voluntary Coverage Assistance Program is a supplemental program to NCCI s Workers Compensation Insurance Plan. As part of NCCI s strategic vision of maintaining and depopulating the residual market, NCCI s VCAP Service redirects coverage opportunities for employers to voluntary market insurers, which generally provide coverage at a lower cost. VCAP Service provides an additional source for producers and employers to secure voluntary workers compensation coverage prior to entering the residual market for coverage. Loss Ratio The ratio of total incurred losses to total earned premiums in a given period, expressed as a percentage. The formula for loss ratio is (loss + loss adjustment expense)/earned premium. Copyright 2015 National Council on Compensation Insurance, Inc. All Rights Reserved. 13