Enrico Caruso
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Transcript of Enrico Caruso
Enrico CarusoResponsible for Group Non-Life Technical Activity
Head Office
Assicurazioni Generali S.p.A.
( Italy )
Friday, 3 September 2010
Hydra Island - Greece, September 3rd, 2010
DIRECT SETTLEMENTLESSONS LEARNED FROM THE MARKET - ITALY
Enrico CarusoAssicurazioni Generali - Trieste
3Agenda
I. Brief History.II. The new Direct Compensation.III. The “Forfait” Flat Rate Reimbursement
system.IV. General considerations and Data.V. Appendix.
AGENDA
4THE FORMER DIRECT INDEMNITY AGREEMENT AMONG COMPANIES
The C.I.D. (Convenzione Indennizzo Diretto=Direct Indemnity Agreement) was a procedure which allowed the assured to be compensated directly by the
Insurance Company of its own vehicle rather than that of the guilty.This was based on an agreement signed between private companies
participating on a voluntary base
The Direct Indemnity Agreement history
BRIEF HISTORY
May 15th, 1978
The C.I.D. procedure started The maximum reimbursement rate was L. 500,000 (€ 258.23)
1992 Settlement limit was raised to L. 10,000,000 (€ 5,164.57)
2000 Settlement limit for vehicle damages became unlimited
2004 tillJanuary 31th, 2007
The agreement started to manage injury and carried properties
It was possible to manage, on the same claim, damages included and not included in Convention
5
Damaged party
Mandatary
Company
THE C.I.D. DIRECT INDEMNITY AGREEMENT PROCEDURE
Claims reporting
Claim registration
Claim survey
Counter-partcoverage confirmation
Receivereimbursement
Claim settlement
Reimbursement
Debtor Company
ANIA
AccidentData Exchange
ANIA
ClearingHouse
Liable Party
BRIEF HISTORY
6EUROPEAN COUNTRIES POSITIONING ON D.I.A. IN 2006
COUNTRYScope
MD BIRequirements Main recovery rules
Impact on TPL claims
(%)
France
MD (IRSA): 2 cars involved, chain accident, pile-up
BI (IRCA): disability <5%
Valid also without responsibility assumption
MD: flat reimbursement of 1,204 € for claims <6,500 €,entire sum if >6,500 €
BI: one-by-one recovery in price range
73%
Spain
2 cars involved Valid with responsibility
assumption by one party (CIDE) or without (ASCIDE)
Flat reimbursement for each claims (741€ in 2004, updated annually), up to a monthly maximum of 100,000 €
70%
Italy
MD (CID): 2 cars involved, responsibility assumption needed
BI (CID): claims under 15,000 €; responsibility assumption needed
Entire reimbursement
22%
BRIEF HISTORY
7Agenda
I. Brief History.II. The new Direct Compensation.III. The “Forfait” Flat Rate Reimbursement
system.IV. General considerations and Data.V. Appendix.
AGENDA
8THE INSURANCE CODE AND THE NEW DIRECT COMPENSATION
THE NEW DIRECT COMPENSATION
TITLE
The Italian Parliament released in 2005 the Insurance Code, and in 2006 enacted the implementing regulations for Direct Compensation,
pursuant to Article 150 of the above Code. Purpose of the Regulator was:
Simplify the current regulatory framework in the field of private insurance.
Shorten the settlement procedures
Stimulate competition among Companies and assure customer service, through better efficiency, settlement speed etc.
Perform an Antitrust action: companies could not learn details of competitors (the amount actually paid on its behalf by the damaged party’s insurer)
Exclude from the offer procedure the costs of professional assistance - except for medical consultation – so the Insurers have to be a consultant for policyholder
Promote contractual innovations, with the inclusion of clauses covering damages to the vehicle in a “specific form”, expressly indicated in the policy (e.g. use of agreed Bodyshops), giving in return to policyholders reductions in premium costs.
THE INTERVENTION OF THE PARLIAMENT IN
ITALY
9THE NEW “CARD” DIRECT COMPENSATION APPLICABILITY CONDITIONS
Claims involving no more than two vehicles
Also without jointly sign
Collision with trailer hooked to tractors
Part of the vehicle dislodged from the structure
Bodily injuries with P.D. up to 9%
THE NEW DIRECT COMPENSATION
10THE NEW “CARD” DIRECT COMPENSATION NON APPLICABILITY CONDITIONS
Claims occurring outside Italy
Boats
Vehicles without license plate
Claims with trailers not hooked to tractor
THE NEW DIRECT COMPENSATION
11
Damaged party
Mandatary
Company
THE NEW “CARD” DIRECT COMPENSATION COMPULSORY PROCEDURE
Claims reporting
Claim registration
Responsibilityagreement
Claim survey
Counter-partcoverage confirmation
Receiveflat rate
Claim settlement
Flat ratereimbursement
Debtor Company
ANIA
AccidentData Exchange
CONSAP
ClearingHouse
Liable Party
THE NEW DIRECT COMPENSATION
12MAIN DIFFERENCES BETWEEN C.A.R.D. AND C.I.D.
FEATURESC.I.D. (before february 1st,
2007)C.A.R.D. (after february
1st, 2007)
Application It is an agreement among Companies: the Insured is entitled to claim damages to their Insurance Company
It is mandated by the law: the Insured is obliged to claim damages to its Insurance Company
Reimbursement among
companies
Full amount: the Mandatary Company recover from Debtor the entire payment (Clearing House system), with light penalties
Mandatary Company is reimbursed by the Debtor with
CARD-CID: a Flat Rate Reimbursement (forfait)
CARD-CTT: an amount calculated on a Flat Rate Reimbursement (forfait), a Plafond, a Deductible and the damage amount
Driver bodily injuries
settlement
Possible only if the report form (the so-called “blue” form) is signed jointly by both drivers or policyholders: the non guilty injured driver is reimbursed from its own Company
Possible although without jointly signed claim report: the non guilty injured driver is reimbursed from its own Company in presence of single sign
THE NEW DIRECT COMPENSATION
13Agenda
I. Brief History.II. The new Direct Compensation.III. The “Forfait” Flat Rate Reimbursement
system.IV. General considerations and Data.V. Appendix.
AGENDA
14
The “principle of risk reversal” has been recognized as one of the distinctive features resulting from CARD scheme: it means that Insurance Companies should no longer focus so much on caused losses, but especially on handled losses due to the application of pre-established flat rate reimbursements.
In 2007 (introduction of Direct Compensation - art.13, D.P.R. n. 254/2006) it was a single flat rate reimbursement split by geographical area but without any distinction by type of vehicle or damage.
In particular, higher frequency of losses with physical damage were not considered.
E.g.: % of losses with physical damage statistics split by type of vehicle:
50% for mopeds & motorcycles
16% for private cars
7% for buses
The economic impact was negative especially for the Companies with a number of mopeds & motorcycles higher than the Market: flat rate reimbursement was lower than real compensations (and without any consideration regarding the different geographical areas)
THE FLAT RATE REIMBURSEMENT
THE “FORFAIT” FLAT RATE REIMBURSEMENT SYSTEM
15THE EVOLUTION OF FLAT RATE REIMBURSEMENT
• 2008: to avoid huge increase of average premium (especially for mopeds & motorcycles), the Technical Committee defined new flat rate reimbursements distinguishing personal injury and property damage, but still not recognizing them in different way according to the type of vehicles. As in 2007, for Property damage there was the split according to 3 different geographical group.
There still were negative results for the Insurance Companies as the weight and the impact of physical damage split by different type of vehicle was not considered.
• 2010: new flat rate reimbursement were established by the Technical Committee based on the criteria of differentiation detected by the Decree of the Minister of Economic Development on December 11th, 2009
• The compensation is currently split as follows:– a single flat rate reimbursement - CARD CID - for minor personal injuries to the drivers
and for damage to the vehicle insured and property carried - different for two main categories of vehicle: "mopeds and motorcycles" and "other vehicles”. This flat rate reimbursement, in respect to the component of property damage, is also different according to three different geographic macro - areas
– a single flat rate reimbursement for each passenger - CARD CTT - for personal injury and property carried also distinguished for types of vehicles as described above.
THE “FORFAIT” FLAT RATE REIMBURSEMENT SYSTEM
16Agenda
I. Brief History.II. The new Direct Compensation.III. The “Forfait” Flat Rate Reimbursement
system.IV. General considerations and Data.V. Appendix.
AGENDA
17CARD DIRECT COMPENSATION STRENGTH AND WEAKNESS POINTS
GENERAL CONSIDERATIONS AND DATA
STRENGTH
• Increase of direct managed claims from 22% in 2006 to 81% in 2009• Increase of settlement speed, from 65% in 2006 to 69% in 2009• Better efficiency, together with the pervasive use of unique small bodily
injury compensation table up to 9%, helped to stabilize and decrease the risk premium in 2005-2009
WEAKNESS
• Complication of litigation procedures and their length (e.g.: when the defendant explains counter-claim or asks in Guarantee Call its Insurer)
• In June 2009 the Italian Constitutional Court declared optional the lawsuit to its insurer
• Practical claims management problems (e.g.: SARC offices- special internal offices for contacts among companies -, partial use of Clearing House automatic compensation, etc.)
• Increase of submerged speculation on small damages, with a value less the flat rate reimbursement sum: this could cause in aggregate, a slight increase of the overall costs of compensations
18SOME DATA ABOUT CARD
GENERAL CONSIDERATIONS AND DATA
2007 2008 2009 2007 2008 2009
Caused Claims frequency (no IBNR) 7,61% 7,73% 7,76% 8,30% 8,47% 8,58%Managed Claims frequency* (no I BNR) 7,72% 7,92% 7,94% 8,41% 8,67% 8,78%
% CARD Claims** 73,7% 75,9% 80,9% 79,6% 80,9% 85,2%% NO CARD Claims** 27,4% 25,1% 20,0% 21,6% 19,9% 15,7%
CARD Current Year Claim Settlement Speed 71,1% 73,8% 73,2% 72,5% 75,4% 74,6%NO CARD Current Year Claim Settlement Speed 55,4% 53,7% 48,4% 50,3% 49,1% 41,9%
(* ) Manged claims are both CARD and NO-CARD
(**) The CARD/NO CARD sum could be more than 100, a claim could be both CARD and NO-CARD
Sources ANIA : "Motor Focus n. 17" and "I talian I nsurance in 2009-2010"
total motor TPL of wich private cars
MOTOR TPL MARKET
MOTOR TPL MARKET
Hydra Island - Greece, September 3rd, 2010
DIRECT SETTLEMENTLESSONS LEARNED FROM THE MARKET - ITALY
Enrico CarusoAssicurazioni Generali - Trieste
20Agenda
I. Brief History.II. The new Direct Compensation.III. The “Forfait” Flat Rate Reimbursement
system.IV. General considerations and Data.V. Appendix.
AGENDA
21LITIGATION AND SETTLEMENT SPEED (MOTOR TPL MARKET)
301.892
285.031
255.383
268.759
65,20%
67,60%
69,70%
69,00%
2006 2007 2008 2009
Litigation (Civil Lawsuit) Settlement speed
APPENDIX
Source: "Italian Insurance in 2009-2010" (ANIA )
SETTLEMENT SPEED
Percentage of not null Motor TPL claims
settled the same year of occurrence
SETTLEMENT SPEED
Percentage of not null Motor TPL claims
settled the same year of occurrence
LITIGATION
All pending Civil Lawsuits on motor TPL - every Status of Case
and Courts
LITIGATION
All pending Civil Lawsuits on motor TPL - every Status of Case
and Courts
MOTOR TPL MARKET
MOTOR TPL MARKET
22CLAIM FREQUENCY AND AVERAGE COST (MOTOR TPL MARKET)
APPENDIX
4.100
3.967
3.9133.902
7,47%
7,61%
7,73%7,76%
2006 2007 2008 2009
Average paid Claim frequency
CLAIM AVG COST
total cost of claims (paid and reserved) by
their number
CLAIM AVG COST
total cost of claims (paid and reserved) by
their number
CLAIMS FREQUENCY
the ratio between the n. of claims not null
and the n. of vehicles
CLAIMS FREQUENCY
the ratio between the n. of claims not null
and the n. of vehicles
MOTOR TPL MARKET
MOTOR TPL MARKET
Source: "Italian Insurance in 2009-2010" (ANIA )
23INCIDENCE OF DIRECT SETTLEMENT IN MARKET MOTOR TPL OPENED CLAIMS
APPENDIX
% CARD CLAIMS
85,280,979,6
83,179,778,4
43,131,4
16,5
71,5
62,660
44,9
37,9
34,8
58,5
57,8
35
200920082007
Private cars Motorbikes Mopeds Lorries<35q
Lorries>35q Other
% NO CARD CLAIMS
15,719,921,618,121,523
5869,7
84,229,3
38,141,1 55,8
63
66,4 43
44,2
65,7
200920082007
Private cars Motorbikes Mopeds Lorries<35q
Lorries>35q Other
Source: "Motor Focus n. 17" (ANIA )
Note: the CARD/NO CARD sum could be more than 100, a claim could be both CARD and NO-CARD
MOTOR TPL MARKET
MOTOR TPL MARKET
24SETTLEMENT SPEED EVOLUTION – BREAKDOWN BY TYPE OF VEHICLE
APPENDIX
% Claims% CARD Claims
%no CARD Claims
% Claims% CARD Claims
%no CARD Claims
% Claims% CARD Claims
%no CARD Claims
Private cars 70,1 74,6 41,9 70,8 75,4 49,1 68,5 72,5 50,3
Motorbikes 54,5 56,1 47,8 57,2 57,5 54,7 57,4 55,4 58,7
- of wich Motorcycles 52,1 56,2 29,7 54,2 57,9 37,5 52,5 56,1 36,9- of wich Mopeds 61,8 55,6 65,2 65,3 54,7 69,1 69,3 47,4 72,9
Lorries 67,9 73,0 57,3 68,3 72,7 61,7 67,4 69,8 63,3- of wich <35q 68,8 74,5 53,3 69,9 74,6 60,9 68,9 71,8 62,7
- of wich >35q 65,1 66,1 63,5 64,1 64,5 63,0 63,8 61,2 64,1
Others 72,3 74,3 67,1 69,1 70,5 64,1 69,5 66,6 70,2
TOTAL 68,9 73,2 48,4 69,4 73,8 53,7 67,6 71,1 55,4
Source: "Motor Focus n. 17" (ANI A )
YEAR 2009 YEAR 2008 YEAR 2007
MOTOR TPL MARKET
MOTOR TPL MARKET