© 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
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Our Stories Video
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Unified Adaptive Content (UAC)—Shattering the Way We Deliver Content
Information Answers
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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
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Find It on ncci.com/INSIGHTS
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
Countrywide Workers Compensation System
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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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
-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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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%
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 13
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
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Impact of Discounting on PremiumPrivate Carriers—NCCI States
p PreliminarySources: NAIC’s Annual Statement Statutory Page 14 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
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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
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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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
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Change in Lost-Time Claim Frequency Claims per $1M Pure Premium, Private Carriers and State Funds—NCCI States
2010 and 2011 adjusted primarily for significant changes in audit activityp Preliminary, based on data valued as of 12/31/2018Source: NCCI’s Financial Call data, developed to ultimate, premium adjusted to current wage and voluntary pure premium level, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; NV is excluded through 2001, TX is excluded through 2006, and WV is excluded through 2011
-4.8
-1
-10
-5
0
5
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p
Accident Year
Average Annual Change: –3.9%(1998–2017)
Percent
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Average Indemnity Claim SeverityPrivate Carriers and State Funds—NCCI States
p Preliminary, based on data valued as of 12/31/2018Source: NCCI’s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2017Values displayed reflect the methodology underlying the most recent rate/loss cost filingIncludes all states where NCCI provides ratemaking services; WV is excluded prior to 2008; NV and TX are excluded prior to 2004
23.9 24.6
4.4% 3%
5
10
15
20
25
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18p
Accident Year
Severity($ Thousands)
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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
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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)
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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
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Connecticut Workers Compensation System
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
▪ 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
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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
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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
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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
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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
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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)
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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)
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-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
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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%
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
-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
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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)
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-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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
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Connecticut Residual Market
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Plan DataIncludes 22 NCCI Plan Administration States
38
AlabamaAlaskaArizonaArkansasConnecticutDCGeorgiaIdahoIllinoisIowaKansas
MississippiNevadaNew HampshireNew MexicoOregonSouth CarolinaSouth DakotaTennesseeVermontVirginiaWest Virginia
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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
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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
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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
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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
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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
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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
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Workers Compensation Underwriting Cycle Video
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Countrywide and ConnecticutLabor Markets
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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
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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
Connecticut United States
48
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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
Connecticut United States
49
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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
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–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
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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
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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
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Legislative Updates—Federal and State
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NCCI’s Engagement at the Federal Level
55
55
NCCI
US Department
of Labor
(USDOL)
US Department
of the Treasury
.
.
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 56
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
Hot Topics
Legalization of Marijuana
Prescription Drugs
Single Payer
Air Ambulances
57
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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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
11–20 Bills Introduced
21–30 Bills Introduced
More Than 30 Bills
Introduced
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
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Available on ncci.com
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Mega Claims
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
CLAIMS MILLION$10MEGA
or more per claim paid or expected to be paid
64
Mega Claims | Definition
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
E F GThe most dangerousjobs are found in these groups.
65
Mega Claims | Hazard Groups
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 67
Mega Claims | Contracting Industry Group
Lost-Time Claims
Mega Claims
Mega claims occur most commonly in the Contracting Industry Group
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
Mega Claims | Part of Body
All other (5%)
Neck, spine, head, brain (57%)
Multiple body parts (37%)
69
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20%28% 14%
Fall from elevation
Struck by object
#2 Cause #3 Cause All other causescombined
70
Mega Claims | Causes of Claims
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#1 Cause Motor VehicleAccidents
71
Mega Claims | Causes of Claims
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12.8%
12.0%MVA claim frequency
Lost-time claim frequency
Top 30 MVA Classes 2011–2016
72
Mega Claims | Motor Vehicle Accidents (MVA)
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
2011–2015
TaxicabClassification
73
▪ Largest increase in MVA frequency occurred
▪ MVA frequency more than doubled in this time frame
Mega Claims | MVA Frequency
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 74
▪ Increase in overall miles driven since the Great Recession
▪ Distracted driving
▪ Smartphone usage
▪ Recreational marijuana legalization
Mega Claims | Factors Affecting Frequency
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
75
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Back to Work Video
© 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.
Supplemental Information
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 79
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%
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 80
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 81
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 82
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 83
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 84
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 87
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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 88
Connecticut Indemnity Loss Distribution 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
33%
37%
29%
56%
59%
67%
5%
3%
3%
6%
1%
1%
Temporary Total Permanent Partial Permanent Total Fatal
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved. 89
Connecticut Medical Loss Distribution 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
13%
18%
10%
29%
34%
27%
47%
42%
59%
10%
6%
4%
1%
0%
0%
Medical Only Temporary Total Permanent Partial Permanent Total Fatal
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
Glossary
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
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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
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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.
93
Glossary
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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.
94
Glossary
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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.
95
Glossary
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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.
96
Glossary
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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.
97
Glossary
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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.
98
Glossary
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Appendix
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
100
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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
101
© Copyright 2019 National Council on Compensation Insurance, Inc. All Rights Reserved.
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
102
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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
103
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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
104
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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
105