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CASUALTY ACTUARIAL SOCIETY RATEMAKING SEMINAR March 11 – 12, 2004

CASUALTY ACTUARIAL SOCIETY RATEMAKING SEMINAR March 11 – 12, 2004. New York Workers Compensation Ratemaking & Other Issues Martin G. Heagen, CPCU, WCCP. CAS RATEMAKING SEMINAR NEW YORK WORKERS COMPENSATION. Loss Ratio Projections Trend Classification Pricing Rate Filing History

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CASUALTY ACTUARIAL SOCIETY RATEMAKING SEMINAR March 11 – 12, 2004

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  1. CASUALTY ACTUARIAL SOCIETYRATEMAKING SEMINARMarch 11 – 12, 2004 New York Workers Compensation Ratemaking & Other Issues Martin G. Heagen, CPCU, WCCP

  2. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION • Loss Ratio Projections • Trend • Classification Pricing • Rate Filing History • Individual Risk Pricing • Unique New York Issues

  3. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Ultimate Loss Ratios Incurred Method Paid Method

  4. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Ultimate Indemnity Loss Ratios

  5. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Ultimate Medical Loss Ratios

  6. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Trend Claim Frequency Claim Cost Loss Ratio

  7. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Indemnity Claim Frequency (Claims per $1 M Premium at Present Rates)

  8. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Medical Claim Frequency (Claims per $1 M Premium at Present Rates)

  9. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Average Indemnity Claim Cost

  10. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Average Medical Claim Cost

  11. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Classification Ratemaking • 9 Industry Groups - Food & Beverage Mfg. - Chemical Mfg. - All Other Mfg. - Contracting - Stores & Dealers - Prof. & Office - Services - Miscellaneous -Maritime, Admiralty, Federal

  12. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Classification Ratemaking Continued • Industry Group Differentials • 5 Years of Data Irrespective of Class Size • 9/11/2001 Losses (Cat 48) Excluded • Class Credibility Based on Losses, Separately for Serious, Non- Serious & Medical • Class Changes Limited To +/- 25%

  13. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Historical Rate Level Changes

  14. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Individual Risk Pricing

  15. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION Unique New York Issues 3rd Party Liability (Dole vs. Dow) Section 110- Small Claims Total Medical Costs Less Than 40% of Total losses Last Benefit Change - 1992 Duration of Permanent Partial Claims 9/11/2001 Effect Payroll Limitation For Construction Classes Special Funds Assessments

  16. CAS RATEMAKING SEMINARNEW YORK WORKERS COMPENSATION New York Workers Compensation Ratemaking & Other Issues Questions & Answers

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