SUNZ 2011 - ACC case study


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SUNZ 2011 - ACC case study

  1. 1. Projection of ACC Long Term Claim Numbers weekly compensation<br />Todd Nicholson<br />Bee Wong Sim<br />24 February 2011<br />
  2. 2. Section 1: Background<br />Weekly Compensation, Long-term claims, RIS<br />Weekly compensation (WC) claims are those that receive “income replacement” payments after their accident <br />Long-term WC claims are those that have received more than 365 days of weekly compensation<br />Outstanding claims liability provision for WC at June 2011 is> $6 billion– 90% due to claims active one year post accident<br />Recover Independence Service (RIS) set up in July 2009<br />
  3. 3. Section 1: Background<br />
  4. 4. Section 1: Background<br />
  5. 5. Section 2: Purpose<br />Project the optimal size of the long-term claims pool<br />Gain an insight into the characteristics of long-term claims (what is the case-mix and is it likely to change over time?)<br />Allow testing under different scenarios<br />Assist in claims liability estimates<br />Provide a better understanding of the impact of targeted intervention analysis and performance measures<br />
  6. 6. Section 3: Modelling<br />Segment the existing long-term WC claims pool to understand claim-mix<br />Construct a survival analysis model to determine which factors influence claim duration<br />Construct a simulation model to project future long-term claim numbers<br />
  7. 7. Section 3a: Segmentation<br />
  8. 8. Section 3a: Segmentation<br />
  9. 9. Section 3b: Survival Analysis<br />Want to model claim duration at the individual claim level<br />So take into account all the claim characteristics such as diagnosis, claimant age and claim management applied to that claim<br />For example:<br />younger claimants should generally heel faster<br />seriously injured claimants should have longer claim durations<br />claimants near to 65 years old have an upper bound on duration <br />
  10. 10. Section 3b: Survival Analysis<br />But we have a problem with our training data<br />Some claims are still open so we don’t know their final duration<br />
  11. 11. Section 3b: Survival Analysis<br />Reference Characteristics:<br />40-50 year old<br />Male<br />Receiving $400-$520 per week<br />In medium intensity employment<br />Soft tissue injury<br />Upper limb<br />
  12. 12. Section 3b: Survival Analysis<br />lag between injury and lodgement of claim<br />multiple injury indicator<br />injury diagnosis<br />injury site<br />scene of injury<br />serious injury indicator<br />at work injury indicator<br />occupation<br />pre-injury work strenuousness<br />hours at weekend indicator<br />WC rate per week<br />gender<br />age at start of WC payment<br />
  13. 13. Section 3b: Survival Analysis<br />Bad<br />Good<br />
  14. 14. Section 3b: Survival Analysis<br />Bad<br />Good<br />
  15. 15. Section 3b: Survival Analysis<br />How effective is RIS?<br />
  16. 16. Section 3b: Survival Analysis<br />
  17. 17. Section 3b: Survival Analysis<br />
  18. 18. Section 3b: Survival Analysis<br />Injury type is an excellent predictor of claim duration for short term claims Injury type is a poor predictor for long term claimsTherefore:For long term claims its less about the type of injury and more about other factors<br />
  19. 19. Section 3b: Survival Analysis<br />To get the predicted survival curve for each claim we:<br />Take the baseline survival curve<br />Adjust for the claim characteristics<br />Adjust for how long they have survived so far<br />Adjust for the introduction of the service delivery model<br />Adjust for the claim being transferred to the RIS team<br />
  20. 20. Section 3b: Survival Analysis<br />Reference Characteristics:<br />40-50 year old<br />Male<br />Receiving $400-$520 per week<br />In medium intensity employment<br />Soft tissue injury<br />Upper limb<br />
  21. 21. Section 3b: Survival Analysis<br />
  22. 22. Section 3b: Survival Analysis<br />
  23. 23. Section 3b: Survival Analysis<br />
  24. 24. Section 3b: Survival Analysis<br />
  25. 25. Section 3b: Survival Analysis<br />
  26. 26. Section 3b: Survival Analysis<br />
  27. 27. Section 3b: Survival Analysis<br />So we now have a survival curve for each claim, which takes into account that claim’s characteristics.<br />We also know the date of birth so we can calculate when they will retire.<br />So we can calculate a predicted duration for each claim<br />
  28. 28. Section 3c: Simulation<br /><ul><li>We also need to take into account new claims
  29. 29. Simulate new claims using the most recent year’s claims</li></ul>Percentage of current number<br />
  30. 30. Section 3c: Simulation<br />We test three scenarios to give a best case, a most likely case and a worst case <br />
  31. 31. Section 3c: Simulation<br />
  32. 32. Section 3c: Simulation<br />
  33. 33. Questions…<br />