MOTOR ACCIDENTS INSURANCE BOARD Peter Roche Chief Executive Officer 1
Scope of Presentation Scheme Features 4 Year Financial Snapshot Claim Management Accident Prevention 2
Scheme Features - History Commenced 1 December 1974-35 th birthday next week No-fault and common law - no-fault benefits not previously available Long term care benefits - commenced May 1991 - benefits available irrespective of fault 3
Scheme Features - Overview Regulated premiums environment - Govt Prices Oversight Commission Review (Now every 4 years) Stable claim benefit/environment - stable claim numbers - damages payments stable - small annual increase in vehicle numbers Long-term liabilities a key risk - average duration of long-term liability claims approx. 20 years 4
Financial Snapshot 2005/06 2008/09 Net Premium Revenue ($'000) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 06 07 08 09 Year 5
Financial Snapshot 2005/06 2008/09 Profit (Before Tax) 200,000 150,000 ($'000) 100,000 50,000 0-50,000 06 07 08 09 Year 6
Financial Snapshot 2005/06 2008/09 Investment Return 20 15 10 % 5 0-5 -10 06 07 08 09 Year 7
Financial Snapshot 2005/06 2008/09 Net Investment Revenue $ M 150 100 50 0-50 -100-150 06 07 08 09 Year 8
Financial Snapshot 30 June 2009 Asset Allocations at 30 June 2009 28% 1% 19% 17% 20% 5% 8% 2% Australian equities International equities Emerging markets Property Infrastructure Cash Fixed interest Illiquid debt 9
Financial Snapshot 2005/06 2008/09 Tax/Dividend Paid (Cash Basis) 100 80 $ M 60 40 20 0 06 07 08 09 Year 10
Financial Snapshot 2005/06 2008/09 Net Claim Liabilities $ M 800 700 600 500 400 300 200 100 0 06 07 08 09 Year 11
Financial Snapshot 2005/06 2008/09 Solvency Level % 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 06 07 08 09 Year 12
Financial Snapshot 2005/06 2008/09 Motor Car Premium Premium ($) 350 300 250 200 150 100 50 0 06 07 08 09 Year 13
Claims Management Model Statutory no-fault benefits with caps* and limits Common law Complementary to one another * Cap does not apply to long-term care. 14
Claims Management (cont) Early claims reporting: - Police - Newspapers - Hospital 15
Claims Management Approach Guidance and direction for staff Reasonable case loads Well developed IT system 16
Claims Management (cont) Specialist services outsourced, e.g. legal, rehabilitation investigation and facilities Service level agreements 17
Proactive Approach to Claim Management Deliver benefits promptly - Applications for benefits processed on day of receipt - average duration of common law claim - 2.7 years Robust assessment of entitlements - Eligibility criteria must be met - IT system flags caps and limits 18
Proactive Approach to Claim Management (cont.) Regular reviews - Peer review of all claims Stock of open claims at 30 June 2009 reduced to 3,105. 19
Proactive Approach to Claim Management (cont.) Open Claims Number 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 05 06 07 08 09 Year 20
Daily Care Claims Segregated management of daily care claims - includes potential daily care claims and children with head injuries Small caseloads - caseloads of approx. 50 claims 21
Daily Care Claims (cont.) Reserves reviewed on each claim at least annually - Actuarial valuation based on individual claims Standardised assessments of injury related care and support needs being introduced early 2010 22
Daily Care Claims (cont) Purpose built housing in Hobart, Launceston and the North West Coast 23
Average Claim Size Scheduled Benefits $ 8000 7000 6000 5000 4000 3000 2000 1000 0 03 04 05 06 07 08 Year Average PTD per claim Average OSL per claim * Average claim size is based on 31/12/08 values and includes paid and outstanding. 24
Average Claim Size Common Law $ 50,000 40,000 30,000 20,000 10,000 0 02 03 04 05 06 07 Year Average PTD per claim Average OSL per claim * Average claim size is based on 31/12/08 values and includes paid and outstanding. 25
Average Claim Size Future Care $ 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 05 06 07 08 09 Year Average PTD per claim Average OSL per claim * Average claim size is based on 31/12/08 values and includes paid and outstanding. 26
10 8 6 4 2 0 Claim Frequency Claim Frequency 06 07 08 09 Year 27 No. of Claims per 1,000 Vehicles
Accident Prevention Road Safety Task Force since 1996 Motorcycle Safety Strategy Infrastructure 28
Road Safety Task Force Partnership Police, DIER, MAIB Review undertaken every three years Funding in excess of $25 million since 1996 29
1,200 1,000 800 600 400 200 0 Serious Injuries Serious Claims V's Registered Vehicles 600,000 500,000 400,000 300,000 200,000 100,000 0 30 Number of Serious Claims Received Number Of Registered Vehicles
Motorcycle Safety Strategy $500,000 commitment over three years Subsidised refresher training Education campaign 31
Infrastructure Investment of $3.5 million over three years in State Black Spot Program From 2006/07: - Erection of wire rope barriers on highways - Eleven Local Government projects 32
Summary 35 years of successful operation Prudent management of business Stable claim numbers and costs Fully funded scheme 33