Post on 12-Feb-2016
description
MIRA II Reserve MIRA II Reserve Preliminary ReportPreliminary Report
MIRA II vs MIRA IMIRA II vs MIRA I
Presented to the BWC-Actuarial CommitteeJuly 21, 2008
Presenter: Rex Blateri, MIRA II Project Manager/Business Lead
MIRA II Project:MIRA II Project: Major EventsMajor 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 overallReserve predictions
Improved and quicker
stop logic
Lower avg reserveprediction
More claims withReserve equal to
zero
MIRA II vs. MIRA I Statistics
MIRA II vs. MIRA I Claim Count by Injury Type
Claim Countshift from Permanent
Condition to Temporary
* Includes claims with reserve equal to zero (0)
MIRA II vs. MIRA I Statistics
MIRA II vs. MIRA I Statistics
MIRA II vs MIRA I Average Reserve Breakdown by Injury Type
NOTE: Calculation uses only claims with reserves greater than zero, does not include zero claim reserves
Identified Error in MIRA II Prediction,
Indemnity Prediction Too Low
Improved MedicalCost Predictions
Fewer Claims Reserved as
Type 9
* Claim Count and Averages revised on July 17, 2008 after the publishing of the initial report
MIRA II-Improved AccuracySample 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 ofMedical Payments
MIRA II-Not Always Lower Reserve
Example Claim: Permanent Total Disability (PTD)
MIRA II vs. MIRA I Statistics
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2008 2007 2006 2005 2004 2003 2002 2001 2000Injury Year
MIRA II vs. MIRA I -Aggregate Reserves by Injury Year
MIRA II MIRA I
28,485
0
2,000
4,000
6,000
8,000
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12,000C
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Reserve Amount-Range
MIRA II & MIRA I Reserve Distribution by Amount (Claims with Date of Injury 2000-08)
MIRA II 28,485 1,105 4,852 5,625 6,799 4,349 5,636 3,294 3,864 3,974 2,025 523 321 195 100 63 30 14 11 54
MIRA I 837 482 8,008 8,055 11,174 8,315 10,822 6,107 5,834 4,766 2,221 2,570 1,176 473 281 108 26 13 11 44
0 1-999 1k-5k 5k-10k10k-20k
20k-30k
30k-50k
50k-70k
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100k-150k
150k-200k
200k-300k
300k-400k
400k-500k
500-600k
600k-700k
700k-800
800k-900k
900k-1,000,000
Over 1 Million
Thank YouThank You