connecticut - ncci holdings inc. · 2019-10-10 · p preliminary sources: nai’s annual statement...

© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.

ConnecticutOctober 11, 2019

Justin [email protected] 860-969-7903

[email protected] 561-893-3097

© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 2

Agenda

Countrywide Workers Compensation System

Connecticut Workers Compensation System

Countrywide and Connecticut Labor MarketsOpening Remarks01

03

02

04

07

08

09

10

Legislative Updates

05 11 Back to Work Video

Delivering Modernization

Our Stories Video

Mega Claims

Kids’ Chance of Connecticut

Connecticut Residual Market

06 12 Closing Remarks


Our Stories Video


Unified Adaptive Content (UAC)—Shattering the Way We Deliver Content

Information Answers


Unified Adaptive Content (UAC)

Agents• Answers• Content Access

Stakeholder-Focused Strategies

Carriers• Content access• Information delivery• Answer the question

Regulators• Easier filing process• Content availability• Statutory concerns

Others• Access


Find It on ncci.com/INSIGHTS


Countrywide Workers Compensation System


Countrywide Workers Compensation (WC) System—An Overview

▪ Net written premium increased in the most recent year

▪ The combined ratio has continued to show favorable results

▪ Lost-time claim frequency declined again

▪ Lost-time claim severity increased modestly for both indemnity and medical


Net Written PremiumPrivate Carriers and State Funds

37.8 39.843.2

47.845.0

48.6

10

20

30

40

50

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Calendar Year

p PreliminarySource: NAIC’s Annual Statement data; includes state insurance fund data for the following states: AZ, CA, CO, HI, ID, KY, LA, MD, MO, MT, NM, OK, OR, RI, TX, and UTEach calendar year total for state funds includes all funds operating as a state fund in that year

$ Billions

10


-0.3%

3.1%

0.8%

-8.9%

5.3%

11

Direct Written Premium Change by ComponentPrivate Carriers—NCCI States

Sources: Direct Written Premium Change: NAIC’s Annual Statement Statutory Page 14 for all states where NCCI provides ratemaking servicesComponents: NCCI’s Policy data

2017 vs. 2018

Payroll

Loss Cost and Mix

Carrier Discounting

Other Factors

Change in Direct Written Premium


0% 1% 2% 3% 4% 5%

Prof. & Business Services

Trade, Transportation, & Utilities

Education & Health Services

Manufacturing

Financial Activities

Construction

Leisure & Hospitality

All Other

0% 1% 2% 3% 4% 5%

12

Drivers of Changes in PayrollForecast Change 2017–2018

Sources: Moody’s Analytics and NCCI

Payroll 5.3%

Wage Rate 3.3% Employment 1.9%


P PreliminarySource: NAIC’s Annual Statement Statutory Page 14Values reflect changes in average premium levels between years, based on approved changes in advisory rates, loss costs, assigned risk rates, and rating values, as of 7/26/2019IN and NC are filed in cooperation with state rating bureaus

Approved Changes in Bureau Premium LevelWeighted by Effective Date—NCCI States

Percent

-9.7 -9.9-10

-5

0

5

03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19p

Calendar Year


Impact of Discounting on PremiumPrivate Carriers—NCCI States

p PreliminarySources: NAIC’s Annual Statement Statutory and NCCI’s Financial Call data Rate/loss cost departure reflects carrier departure from NCCI rate level, which excludes a profit and contingency provision and expense constantBased on data for all states where NCCI provides ratemaking services, excluding TX

1.3

-25

-15

-5

5

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Policy Year

Percent


Combined Ratio—Underwriting Gain AchievedPrivate Carriers

p PreliminarySource: NAIC’s Annual Statement data

89.383

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Calendar Year

Percent

100


Combined Ratio by ComponentPrivate Carriers

p PreliminarySource: NAIC’s Annual Statement data

49 43

13 13

26 26

2 2

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Loss Ratio

Loss Adjustment Expense (LAE) Ratio

Underwriting Expense Ratio

Calendar Year

Dividends

Percent


8983

96 97

25

50

75

100

125

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018p

Percent

17

Net Combined RatiosCalendar Year vs. Accident Year as Reported

p PreliminarySource: NAIC’s Annual Statement dataAccident Year information is reported as of 12/31/2018Includes dividends to policyholders


Change in Lost-Time Claim Frequency Claims per $1M Pure Premium, Private Carriers and State Funds—NCCI States

2010 and 2011 adjusted primarily for significant changes in audit activityp Preliminary, based on data valued as of 12/31/2018Source: NCCI’s Financial Call data, developed to ultimate, premium adjusted to current wage and voluntary pure premium level, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; NV is excluded through 2001, TX is excluded through 2006, and WV is excluded through 2011

-4.8

-1

-10

-5

0

5

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Accident Year

Average Annual Change: –3.9%(1998–2017)

Percent


Average Indemnity Claim SeverityPrivate Carriers and State Funds—NCCI States

p Preliminary, based on data valued as of 12/31/2018Source: NCCI’s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; WV is excluded prior to 2008; NV and TX are excluded prior to 2004

23.9 24.6

4.4% 3%

5

10

15

20

25

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p

Accident Year

Severity($ Thousands)


p Preliminary, based on data valued as of 12/31/2018Sources: Severity: NCCI’s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; severity changes exclude WV through 2008 and exclude NV and TX through 2004 US Average Weekly Wage: 1998–2007 and 2012–2017, Quarterly Census of Employment and Wages, US Bureau of Labor Statistics; 2008–2011, NCCI; 2018p, NCCI and Moody’s Analytics

98 99 00 01 02 03 04 05 06 07 08 08 09 10 11 12 13 14 15 16 17 18p

Accident Year Accident Year

Indemnity claim severity grew 2.3% per year faster than wages

Wage inflation outpaced changes in indemnity claim severity by 1.2% per year, on average

Relative Growth Rates—Indemnity Severity vs. Wage InflationPrivate Carriers and State Funds—NCCI States


Average Medical Lost-Time Claim SeverityPrivate Carriers and State Funds—NCCI States

p Preliminary, based on data valued as of 12/31/2018Source: NCCI’s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; WV is excluded prior to 2008; NV and TX are excluded prior to 2004

28.7 28.9

4.1% 1%

5

10

15

20

25

30

98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17p 18p

Accident Year

Severity($ Thousands)


p Preliminary, based on data valued as of 12/31/2018Sources: Severity: NCCI’s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; severity changes exclude WV through 2008 and exclude NV and TX through 2004Personal Healthcare Chain-Weighted Price Index: Centers for Medicare & Medicaid Services

98 99 00 01 02 03 04 05 06 07 08 08 09 10 11 12 13 14 15 16 17p 18p

Accident Year

Medical lost-time claim severity grew 4.3% per year faster than medical care prices

Changes in medical lost-time claim severity and medical care prices tracked one another

Accident Year

Relative Growth Rates—Medical Severity vs. Price InflationPrivate Carriers and State Funds—NCCI States


Connecticut Workers Compensation System


▪ Premium has declined for the third year in a row

▪ Combined ratio remains favorable

▪ Lost-time claim frequency continues to decline

▪ Severity increased in the latest policy year

24

Connecticut Workers Compensation System—An Overview


Connecticut Premium VolumeDirect Written Premium in $ Millions

Source: NAIC’s Annual Statement data

818769

0

100

200

300

400

500

600

700

800

900

1000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Calendar Year


Connecticut Combined Ratios

Sources: NCCI’s financial data through 12/31/2018 and NAIC’s Annual Statement data

8491

100

2014 2015 2016 2017 2018

Accident Year


49 55

34 35

1 1

2014 2015 2016 2017 2018

Accident Year

27

Connecticut Combined Ratios by Component

Sources: NCCI’s financial data through 12/31/2018 and NAIC’s Annual Statement data

Loss Ratio

Expense Ratio

Dividends


Connecticut Change in Claim FrequencyPercent Change in Lost-Time Claims, per $ Million of On-Leveled Premium

Based on NCCI’s financial data through 12/31/2018, on-leveled and developed to ultimate, premium adjusted to common wage level

-2.9

-5.5

-12

-10

-8

-6

-4

-2

0

2

4

6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cumulative Change of –35%(2003–2017)

Policy Year


28.631.9

-3.5%

+11.7%

0

10

20

30

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Policy Year

29

Connecticut Average Indemnity Claim SeverityLost-Time Claim Severity in $ Thousands

Based on NCCI’s financial data through 12/31/2018, on-leveled and developed to ultimate

Cumulative Change of +48.3%(2003–2017)


25.127.5

-2.9%

+9.4%

0

10

20

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Policy Year

30

Connecticut Average Medical Claim SeverityLost-Time Claim Severity in $ Thousands

Based on NCCI’s financial data through 12/31/2018, on-leveled and developed to ultimate

Cumulative Change of +69.4%(2003–2017)


-3.9%

-10.9%

-14.1%

-16.8%

-2.9%

-7.9%

-10.9%

-12.6%

-19.8%

-4.5%

1/1/2016 1/1/2017 1/1/2018 1/1/2019 1/1/2020*

31

Connecticut Filing ActivityVoluntary Loss Cost and Assigned Risk Rate Changes

*Pending


Connecticut January 1, 2020 Loss Cost Filing

Change in Trend: 1.0%

Change in Experience: –5.3%

Change in Benefits: 0.4%

Change in All Other: 1.1%

Overall Loss Cost Level Change: –2.9%


-1.5%

-5.9%

-2.5%-1.9%

-2.9% -2.9%

Manufacturing Contracting Office & Clerical Goods & Services Miscellaneous Overall

33

Connecticut January 1, 2020 FilingAverage Changes by Industry Group


Reflects the most recent experience filing in each jurisdiction as of 10/4/2019 Due to the timing of the individual loss cost/rate filings, the figures shown may include changes from prior filing seasons

Current NCCI Voluntary Market Loss Cost/Rate Level ChangesExcludes Law-Only Filings

-17.2

-2.9-1.5

MT AK TX SD VT MS AZ VA NC DC NH TN SC KY GA NM CO OR UT NE NV RI ME MD IN ID LA FL IL OK KS AL AR IA CT MO WV HI

Approved Pending

34

(Pending)


-12.9%

-11.6%

-10.0%

-9.6%

-8.1%

-7.5%

-2.9%

Massachusetts

Vermont*

New York

New Hampshire

Rhode Island

Maine

Connecticut*

7/1/2018

4/1/2020

10/1/2019

1/1/2020

8/1/2019

4/1/2019

1/1/2020

35

*PendingReflects the most recent experience filing in each jurisdiction as of 10/4/2019 Due to the timing of the individual loss cost/rate filings, the figures shown may include changes from prior filing seasons

Current Voluntary Market Loss Cost/Rate ChangesNortheastern States


0.83

0.73

0.58

0.50

1.00

1.50

CT ME NH RI VT Region CW

36

Average Voluntary Pure Loss Costs Using Connecticut Payroll Distribution

Based on approved rates and loss costs in various jurisdictions from filings using data valued as of 12/31/2017


Connecticut Residual Market


Plan DataIncludes 22 NCCI Plan Administration States

38

AlabamaAlaskaArizonaArkansasConnecticutDCGeorgiaIdahoIllinoisIowaKansas

MississippiNevadaNew HampshireNew MexicoOregonSouth CarolinaSouth DakotaTennesseeVermontVirginiaWest Virginia


Assigned Risk Plan Market Share Percentage by StateAs of 12/31/2018*

*PreliminaryMarket share percentages are from NCCI’s 2018 Residual Market Management Summary

5.4%

AK AR VT TN KS NH NV GA VA OR SC CT AZ DC IA IL SD WV MS NM AL ID

5.7%

39


6.66.1 5.9

5.6 5.4

6.76.3 6.1 6.0

5.7

2014 2015 2016 2017 2018*

Calendar Year

*PreliminaryMarket share percentages are from NCCI’s 2018 Residual Market Management Summary

Connecticut Residual Market Share Compared To All Plan States Market SharePlan Premium as a Percentage of Direct Written Premium

40


Connecticut Residual Market Plan PremiumAs of 12/31/2018

56.2 54.8

47.745.0

40.7

2014 2015 2016 2017 2018

Policy Year

5-Year Average = $48.9 M$ Millions

Premium data is on a policy year basis as reported to NCCI, for policies effective from January 1, 2018, to December 31, 2018, including prorated cancellations, with all policies’ premium associated to the dominant state

41


Connecticut Residual Market Policy CountsAs of 12/31/2018

13,472

14,367 14,555

15,03115,174

2014 2015 2016 2017 2018

Policy Year

5-Year Average = 14,520 policies

Policy data is on a policy year basis as reported to NCCI, for policies effective from January 1, 2018, to December 31, 2018, including prorated cancellations, with all policies’ premium associated to the dominant state

42


Connecticut Residual Market Policy Information

Premium and policy data is on a policy year basis as reported to NCCI, for policies effective from January 1, 2018, to December 31, 2018, including prorated cancellations, with all policies’ premium associated to the dominant state

$2,682Average Policy Size

43

Policy Premium


0.85 0.82 0.790.89

1.08

2014 2015 2016 2017 2018

Policy Year

PY Combined Ratio 5-Year Aggregate Combined Ratio = 0.89

From NCCI’s Residual Market Quarterly Results—equals [1.0 – Residual Market Operating Gain (Loss)] / Pool Written Premium

Connecticut Reinsurance Pool’s Combined Ratios Over the Past Five YearsEstimated Policy Year Combined Ratios as of 3/31/2019

44


Workers Compensation Underwriting Cycle Video


Countrywide and ConnecticutLabor Markets


Change in Private EmploymentPrivate Employment Growth Is Below Average

Year-over-year percentage change; employment is for Total Private IndustryFrequency of observation: quarterly; 2016 Q1–2019 Q1 Sources: US Bureau of Labor Statistics, Moody’s Analytics, and NCCI

+0.5%+0.3%

+0.5%

+1.6%

+1.8%

+2.0%

2017 Q1 2018 Q1 2019 Q1

Connecticut United States

47


Change in Average Weekly WagesWage Growth Is Below the National Average

Year-over-year percentage change; wages are for Total Private IndustryFrequency of observation: quarterly; 2016 Q1–2019 Q1Sources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody’s Analytics, and NCCI

+3.1% +2.9%

+0.3%

+7.0%

+3.7%

+1.5%

2017 Q1 2018 Q1 2019 Q1


48


Private Industry Payroll Growth DecompositionPayroll Growth Is Below the National Average

AWW = Average Weekly Wage2019 Q1 year-over-year percentage changeSources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody’s Analytics, and NCCI

+0.5%

+2.0%

+0.3%

+1.5%

+0.8%

+3.5%

Employment

AWW

Payroll


49


Change in Employment by SectorEmployment Increased in Several Sectors in the Past Year

Employment numbers are rounded to the nearest hundredYear-over-year percentage change; frequency of observation: quarterly; 2019 Q1 Sources: US Bureau of Labor Statistics, Moody’s Analytics, and NCCI

CT +2.7 161,000 9 +4,200US +2.6

CT +6.8 62,000 4 +4,000US +3.8

CT +1.0 337,200 20 +3,500US +2.3

CT +0.9 161,200 9 +1,400US +1.9

CT +3.2 32,900 2 +1,100US –0.2

CT +0.4 126,800 7 +500US +1.2

CT — 236,900 14 0US +0.5

CT –1.4 77,400 5 –1,100US +1.5

CT –1.0 294,700 17 –2,900US +1.0

CT –1.5 217,200 13 –3,300US +2.5

1-Year

ChangeYear-Over-Year Percent Change, 2019 Q1

Sector

Size

Share

%Economic Sector

Leisure and hospitality

Construction

Education and health services

Manufacturing

Professional and business services

Government

Other services

Trade, transportation, and utilities

Information

Financial activities

50


–5% 0 +5% +10%

Payroll Growth

–5% 0 +5% +10%

AWW Growth

Connecticut’s Payroll Growth Decomposition by Sector

AWW = Average Weekly Wage2019 Q1 year-over-year percentage change; sectors are in descending order by the volume of state payroll amountsSources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody’s Analytics, and NCCI

–5% 0 +5% +10%

Financial activities

Professional and business services

Education and health services

Trade, transportation, and utilities

Government

Manufacturing

Leisure and hospitality

Construction

Information

Other services

Employment Growth ≈+

51


Headline Unemployment Rate The Unemployment Rate Is Similar to the National Rate

Headline Unemployment Rate, seasonally adjusted Frequency of observation: monthly; latest available data point: July 2019Source: US Bureau of Labor Statistics (BLS), www.bls.gov

United States: 3.7%

Connecticut: 3.6%

Jul Aug Sep Oct Nov Dec2018

Jan2019

Feb Mar Apr May Jun Jul

52


Connecticut’s Labor Market

▪ Connecticut’s unemployment rate is similar to the US rate

▪ Payroll growth in Connecticut was slight due to modest increases in both wages and employment

▪ Financial Activities has the largest payroll in the state

▪ Payroll grew fastest in the Leisure and Hospitality sector

▪ Employment growth is below the US rate

▪ The Construction sector increased at the fastest rate, outpacing the US rate

▪ The Leisure and Hospitality sector’s increase was similar to the US and added the most jobs

▪ Decreases in the Professional and Business Services and Trade, Transportation, and Utilities sectors weighed heavily on overall employment growth

53


Legislative Updates—Federal and State


NCCI’s Engagement at the Federal Level

55

55

NCCI

US Department

of Labor

(USDOL)

US Department

of the Treasury

.

.


Issue Spotlight: Terrorism Risk Insurance Program

▪ Background

▪ Unique impact of terrorism peril on workers compensation

▪ Current status of Terrorism Risk Insurance Program Reauthorization Act (TRIPRA)of 2015

▪ Absent Congressional action,TRIPRA expires on 12/31/2020

▪ Reauthorization activities

▪ Federal Insurance Office (FIO)

▪ NCCI

▪ Industry

▪ Other stakeholders


Hot Topics

Legalization of Marijuana

Prescription Drugs

Single Payer

Air Ambulances

57


Legislative Overview | NationalAs of September 30, 2019

685All jurisdictions/federal WC-related bills tracked by NCCI

415Bills in NCCI jurisdictions

98Enacted (includes all jurisdictions/federal)

58


Legislative Overview | WC Bills Introduced

59

CA

OR

ID

WA

MT

NV

AK

UT

AZ

CO

NM

WY

TX

OK

KS

NE

SD

ND

MN

IA

MO

AR

LA

IL

WI

MI

IN OH

MS AL GA

FL

TN

KY

SC

NC

VA

WV

PA

NY

NJ

ME

VT

NH

MD

DE

CT

RI

DC

MA

HI

0–10 Bills Introduced



More Than 30 Bills

Introduced


Legislative Overview | National Bill Trends

124

42

46

47

55

First Responder Bills

Reimbursement/Fee Schedule Bills

Indemnity Benefit Bills

Court/Legal Issue Bills

Compliance-Related Bills

60

As of September 30, 2019


Connecticut Enacted Legislation

▪ SB 164

▪ Compensability for mental or emotional impairments of police and firefighters as a result of witnessing death, aftermath of death, or traumatic injury resulting in the loss of a vital body part or function

▪ SB 906

▪ Allows the Insurance Department to use third party consultants to assist in the review of any rate or form filing

▪ HB 6916

▪ Establishes a task force to study remedies and potential liability for unreasonably contested or delayed workers compensation claims

61


Available on ncci.com


Mega Claims


CLAIMS MILLION$10MEGA

or more per claim paid or expected to be paid

64

Mega Claims | Definition


E F GThe most dangerousjobs are found in these groups.

65

Mega Claims | Hazard Groups


30% of all lost-time

claims come from these hazard groups

Yet, theyaccount for

70%of all

mega claims

66

Mega Claims | Hazard Group Details


Mega Claims | Contracting Industry Group

Lost-Time Claims

Mega Claims

Mega claims occur most commonly in the Contracting Industry Group


Carpentry(HG F)

Salespeople (HG E)

Clerical (HG C) accounts for 30% of all payroll

Trucking (HG F)

Roofing (HG G)

68

Mega Claims | Top Five Classes


Mega Claims | Part of Body

All other (5%)

Neck, spine, head, brain (57%)

Multiple body parts (37%)

69


20%28% 14%

Fall from elevation

Struck by object

#2 Cause #3 Cause All other causescombined

70

Mega Claims | Causes of Claims


#1 Cause Motor VehicleAccidents

71

Mega Claims | Causes of Claims


12.8%

12.0%MVA claim frequency

Lost-time claim frequency

Top 30 MVA Classes 2011–2016

72

Mega Claims | Motor Vehicle Accidents (MVA)


2011–2015

TaxicabClassification

73

▪ Largest increase in MVA frequency occurred

▪ MVA frequency more than doubled in this time frame

Mega Claims | MVA Frequency


▪ Increase in overall miles driven since the Great Recession

▪ Distracted driving

▪ Smartphone usage

▪ Recreational marijuana legalization

Mega Claims | Factors Affecting Frequency


Kids’ Chance believes that we can make a significant difference in the lives of all children affected by a workplace injury by helping them pursue and achieve their educational goals

Elizabeth Sinatro, Vice President

MailKids’ Chance of Connecticut

PO Box 1134Glastonbury, CT 06033

[email protected]

75


Back to Work Video


ConnecticutOctober 11, 2019

Justin [email protected] 860-969-7903

[email protected] 561-893-3097


Supplemental Information


Total Benefit Costs in Connecticut Indemnity vs. Medical

Regional states are ME, NH, RI, and VTBased on NCCI’s financial data

42%

50%

53%

58%

50%

47%


Connecticut Claim FrequencyLost-Time Claims, per $ Million of On-Leveled Premium

Based on NCCI’s financial data through 12/31/2018, on-leveled and developed to ultimate, premium adjusted to common wage level

18.5

0

10

20

30

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Policy Year


Connecticut Average Indemnity Claim SeverityAdjusted to Common Wage Level vs. Actual, in $ Thousands

Based on NCCI’s financial data through 12/31/2018 for lost-time claims at current benefit level and developed to ultimate

31.9 32.2

10

30

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 AY2018

Policy Year


Connecticut Average Medical Claim SeverityAdjusted to Common Wage Level vs. Actual, in $ Thousands

Based on NCCI’s financial data through 12/31/2018 for lost-time claims at current benefit level and developed to ultimate

27.5 26.7

10

30

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 AY2018Policy Year


Average Voluntary Pure Loss Costs Using Connecticut Payroll Distribution

Based on approved rates and loss costs in various jurisdictions from filings using data valued as of 12/31/2017

0.83

0.58

0.50

1.00

TX AR

WV IN TN UT KS

OR

NC

DC

NV AZ

SD KY

CO

MS

AL

VA

MD

NE

NH

NM

MO

OK FL IA

ME RI

SC GA IL HI

LA MT ID CT

AK

VT

CW


Connecticut Average Claim FrequencyLost-Time vs. Medical Only, per 100,000 Workers

Based on NCCI’s Statistical Plan data

3,315

5,200

3,484

3,642

4,102

4,073

2,952

1,056 2,259CT

ME

NH

RI

VT

Region

CW


30.128.8

26.2

16.4

21.0

28.0

CT ME NH RI VT

85

Average Indemnity Claim Severity in the RegionPY 2015 vs. PY 2016, in $ Thousands

Based on NCCI’s financial data for lost-time claims at current benefit level and developed to ultimate, premium adjusted to common wage level


26.3 25.427.7

34.5

9.8

31.7

CT ME NH RI VT

86

Average Medical Claim Severity in the RegionPY 2015 vs. PY 2016, in $ Thousands

Based on NCCI’s financial data for lost-time claims at current benefit level and developed to ultimate, premium adjusted to common wage level


Connecticut Distribution of Claims by Injury Type

Regional states are ME, NH, RI, and VTBased on NCCI’s Statistical Plan data for jurisdiction/claim type combinations for which three or more cases exist

76%

75%

69%

15%

20%

21%

9%

5%

10%

0%

0%

0…

Medical Only Temporary Total Permanent Partial Fatal & Permanent Total


Connecticut Indemnity Loss Distribution by Injury Type


33%

37%

29%

56%

59%

67%

5%

3%

3%

6%

1%

1%

Temporary Total Permanent Partial Permanent Total Fatal


Connecticut Medical Loss Distribution by Injury Type


13%

18%

10%

29%

34%

27%

47%

42%

59%

10%

6%

4%

1%

0%

0%

Medical Only Temporary Total Permanent Partial Permanent Total Fatal


Glossary


Active Claim—A workers compensation claim for which there is at least one medical service provided during that service year.

Ambulatory Surgical Center (ASC)—A state-licensed facility that is used mainly to perform outpatient surgery, has a staff of physicians, has continuous physician and nursing care, and does not provide for overnight stays. An ASC can bill for facility fees much like a hospital, but generally has a separate fee schedule.

Assigned Risk Adjustment Program (ARAP)—An assigned risk market program that surcharges residual market risks based on the magnitude of their experience rating modification.

Calendar-Accident Year (CAY)—The accumulation of loss data on all accidents with the date of occurrence falling within a given calendar year. The premium figure is the same as that used in calendar year experience.

91

Glossary


Calendar Year (CY)—Experience of earned premium and loss transactions occurring within the calendar year beginning January 1, irrespective of the contractual dates of the policies to which the transactions relate and the dates of the accidents.

Claim Frequency—The number of claims per unit of exposure; for example, the number of claims per million dollars of premium or per 100 workers.

Claim Severity—The average cost of a claim. Severity is calculated by dividing total losses by the total number of claims.

Combined Ratio—The sum of the (1) loss ratio, (2) expense ratio, and (3) dividend ratio for a given time period.

Detailed Claim Information (DCI)—An NCCI Call that collects detailed information on an individual workers compensation lost-time claim basis, such as type of injury, whether or not an attorney was involved, and the timing of the claim’s report to the carrier.

92

Glossary


Diagnosis Groups—Based on ICD-10 codes; groups based on similar injuries and parts of body.

Direct Written Premium (DWP)—The gross premium income adjusted for additional or return premiums but excluding any reinsurance premiums.

Drugs—Includes any data reported by a National Drug Code (NDC). Also included are data for revenue codes, the Healthcare Common Procedure Code System (HCPCS), and other state-specific codes that represent drugs.

Durable Medical Equipment—Equipment that is primarily and customarily used to serve a medical purpose, can withstand repeated use, could normally be rented and used by successive patients, is appropriate for use in the home, and is not generally useful to a person in the absence of an illness or injury.

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Hospital Inpatient Service—Services for a patient who is admitted to a hospital for treatment that requires at least one overnight stay (more than 24 hours in a hospital). Payment for a hospital inpatient service is limited to the payment made for the facility cost.

Hospital Inpatient Stay—A hospital admission of a patient requiring hospitalization of at least one 24-hour period.

Hospital Outpatient Service—Any type of medical or surgical care performed at a hospital that is not expected to result in an overnight hospital stay (less than 24 hours in a hospital). Payment for a hospital outpatient service is limited to the payment made for the facility cost.

Indemnity Benefits—Payments by an insurance company to cover an injured worker’s time lost from work. These benefits are also referred to as “wage replacement” benefits.

Loss Ratio—The ratio of losses to premium for a given time period.

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Glossary


Lost-Time (LT) Claims—Claims resulting in indemnity benefits (and usually medical benefits) being paid to, or on behalf of, the injured worker for time lost from work.

Medical Data Call—Captures transaction-level detail for medical billings that were processed on or after July 1, 2010. All medical transactions with the jurisdiction state in any applicable Medical Data Call state are reportable. This includes all workers compensation claims, including medical-only claims.

Medical-Only Claims—Claims resulting in only medical benefits being paid on behalf of an injured worker.

Net Written Premium (NWP)—The gross premium income adjusted for additional or return premiums; includes any additions for reinsurance assumed and any deductions for reinsurance ceded.

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Permanent Partial (PP)—A disability that is permanent but does not involve a total inability to work. The specific definition and associated workers compensation benefits are defined by statute and vary by jurisdiction.

Policy Year (PY)—The year of the effective date of the policy. Policy year financial results summarize experience for all policies with effective dates in a given calendar year period.

Prescription Count—Number of drug prescriptions, where refills are counted separately.

Schedule Rating—A debit and credit plan that recognizes variations in the hazard-causing features of an individual risk.

Service Year—A loss accounting term for experience that is summarized by the calendar year in which a medical service was provided.

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Glossary


Surgery Visit—A visit in which at least one surgery procedure is performed based on the reported procedure code.

Take-Out Credit Program—An assigned risk program that encourages carriers to write current residual market risks in the competitive voluntary marketplace.

Temporary Total (TT)—A disability that totally disables a worker for a temporary period of time.

Units—The number of units of service performed or the quantity of drugs dispensed. For Paid Procedure Codes related to medications, the quantity/units depend on the type of drug:

▪ For tablets, capsules, suppositories, and nonfilled syringes, units represent the actual number of the drug provided. For example, a bottle of 30 pills would have 30 units.

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▪ For liquids, suspensions, solutions, creams, ointments, and bulk powders that are dispensed in standard packages, the units are specified by the procedure code. For example, a cream is dispensed in a standard tube, which is defined as a single unit.

▪ For liquids, suspensions, solutions, creams, ointments, and bulk powders that are not dispensed in standard packages, the number of units is the amount provided in its standard unit of measurement (e.g., milliliters, grams, ounces). For example, codeine cough syrup dispensed by a pharmacist into a four-ounce bottle would be reported as four units.

Visit—Any hospital outpatient or ASC service or set of services provided to a claimant on a specific date. At any visit, more than one procedure may be performed, and any claimant may have more than one visit.

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Appendix


NCCI’s Workers Compensation Resources

▪ Financial Aggregate Calls

▪ Used for aggregate ratemaking

▪ Statistical Plan for Workers Compensation and Employers Liability Insurance (Statistical Plan)

▪ Used for class ratemaking

▪ Detailed Claim Information

▪ In-depth sample of lost-time claims

▪ Policy Data

▪ Policy declaration page information

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Financial Aggregate Calls

▪ Collected Annually

▪ Policy and calendar-accident year basis

▪ Statewide and assigned risk data

▪ Premiums, Losses, and Claim Counts

▪ Evaluated as of December 31

▪ Purpose

▪ Basis for overall aggregate rate indication

▪ Research

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Policy Year Financial Aggregate Data

1/1/2017 12/31/20171/1/2016 1/1/2020 12/31/2020

Policy Expiration Date

Policy Effective Date

Policy Year2016

Policy Year2017

Policy Year2020

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Calendar-Accident Year Financial Aggregate Data

1/1/2018 12/31/20181/1/2017 1/1/2021 12/31/2021

Policy Expiration Date

Policy Effective Date

Calendar-Accident

Year2017

Calendar-Accident

Year2018

Calendar-Accident

Year2021

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Statistical Plan for Workers Compensation and Employers Liability Insurance (Statistical Plan) Data

▪ Experience by Policy Detail

▪ Exposure, premium, and experience rating modifications

▪ Individual claims by injury type

▪ Purposes

▪ Classification relativities

▪ Experience Rating Plan

▪ Research

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Valuation of Statistical Plan Data

PolicyEffective

18 Months

1stReport

Valuation

2ndReport

Valuation

3rdReport

Valuation

4thReport

Valuation

5thReport

Valuation

30 Months42 Months

54 Months66 Months

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connecticut - ncci holdings inc. · 2019-10-10 · p preliminary sources: nai’s annual statement...

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