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MIRA II Reserve Preliminary Report MIRA II vs MIRA I. Presented to the BWC-Actuarial Committee July 21, 2008 Presenter: Rex Blateri, MIRA II Project Manager/Business Lead. MIRA II Project: Major Events. Online Tutorial to External Customers MIRA II Reserve Evaluation MIRA II Web Testing

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Mira ii reserve preliminary report mira ii vs mira i

MIRA II Reserve Preliminary ReportMIRA II vs MIRA I

Presented to the BWC-Actuarial Committee

July 21, 2008

Presenter: Rex Blateri, MIRA II Project Manager/Business Lead


MIRA II Project:Major Events

  • Online Tutorial to External Customers

  • MIRA II Reserve Evaluation

  • MIRA II Web Testing

  • Preparation for MIRA II Training-Phase II

  • MIRA II Reprediction Service

  • MIRA II Reserve Sign Off: Prediction as of Aug 17, 2008

  • Prepare Staff for Sept 5 Release of Reserves


MIRA II vs. MIRA I Statistics

Report Data: Original File

  • Reserves calculated as of June 30, 2008

  • 1.7 million claims sent through original prediction process

  • Approximately 328,000 claims with MIRA II or MIRA I reserves greater than zero


MIRA II vs. MIRA I Statistics

Report Data: Limited File for Statistical Reporting

  • Private and Public Employer Claims with date of injury 2000 thru 2008

  • Claims with either a MIRA II or MIRA I reserve greater than zero

  • Not including claims with Injury Type 6 (Medical Only) since BWC suppresses reserves on Medical Only claim

    NOTE:

    • Reserve amount is the Total Incurred (prediction) – Total Paid (medical and Indemnity)

    • Claim reserves where both MIRA I and MIRA II is zero (0) are not used in statistical report


MIRA II vs. MIRA I Statistics

  • MIRA II Injury Types:

  • Type 1-Death

  • Type 2-PTD

  • Type 5-Temporary Condition

  • Type 6-Medical Only (not included in claim count and averages)

  • Type 9-Permanent Condition


MIRA II vs. MIRA I Statistics

Lower overall

Reserve predictions

Improved and

quicker

stop logic

Lower avg reserve

prediction

More claims with

Reserve equal to

zero


MIRA II vs. MIRA I Statistics

MIRA II vs. MIRA I Claim Count by Injury Type

Claim Count

shift from Permanent

Condition to

Temporary

* Includes claims with reserve equal to zero (0)



MIRA II vs. MIRA I Statistics

MIRA II vs MIRA I Average Reserve Breakdown by Injury Type

Identified Error in

MIRA II Prediction,

Indemnity Prediction

Too Low

Improved Medical

Cost Predictions

Fewer Claims

Reserved as

Type 9

* Claim Count and Averages revised on July 17, 2008 after the publishing of the initial report

NOTE: Calculation uses only claims with reserves greater than zero, does not include zero claim reserves


MIRA II-Improved Accuracy

Sample PTD Claim

Claim Facts –

Claimant Current Age – 26

Remaining Life Years – 48 years

ICD-9 – Serious Head Injury

Paid to date 2008 - $120,187

Paid 2007 -             $315,959

Paid 2006 -             $282,342

Paid 2005 -             $384,097

Total Medical Paid to date - $2,833,915

Both MIRA I and MIRA II use a method to calculate PTD medical where the first 3 yrs of claim life is consider the ‘critical’ care time period and the years > 3 yrs is consider ‘chronic’ care. 

In MIRA II ‘chronic’ care considers what has been paid in the current year and the prior three years and uses a weighted average of the paid and than calculates for remaining life expectancy years.  MIRA I used a flatter baseline amount for calculating ‘chronic’ care amounts.

Summary: It is obvious the MIRA I incurred is too low based on the claimant age, injury and what is being paid annually.   The claim will be re-predicted on an annual basis and if the medical payments significantly decrease the prediction will trend downward. 

3 + Years of

Medical Payments


MIRA II-Not Always Lower Reserve

Example Claim: Permanent Total Disability (PTD)




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