Ulrich Werwigk Swiss Re Europe SA German Branch Munich Components of Bodily Injury Claims A European Perspective Bodily Injury Claims in Europe Bodily Injury Scenarios in Europe Sample of Typical Cases ID: 176051
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FIAR – International Insurance-Reinsurance Forum 2012
Ulrich Werwigk, Swiss Re Europe S.A. German Branch; Munich
Components of Bodily Injury Claims – A European Perspective – Slide2
Bodily Injury Claims in EuropeBodily Injury Scenarios in Europe – Sample of Typical CasesSwiss Re Bodily Injury Landscape – Benchmark Case and Trends
Key Drivers of Bodily Injury ClaimsComponents of Bodily Injury Claims – OverviewExemplary Reserve Calculation
Conclusions: "… what is important?"2Agenda and TopicsSlide3
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Bodily Injury Claims in Europe– Facts and Developments*)
According to last
CEA
statistics, published in 2010, Europe is with 315m vehicles the largest motor market of the world.
Comparing with the increase of vehicles of 1,9% each year, the growth of bodily injury claims of 2,3% per year is slightly higher.
Total expenditure of bodily injury claims is quoted with 50% of all MTPL claims expenditure,
even though the share of counted claims is only 14%
(Italy 22% , France, Germany, Austria 10%, Hungary 2,4% of counted claims).
The
share of l
arge personal injury claims (>€ 100.000) counts only 1,1% of all personal injury claims, however they represent 37% of all personal injury claims expenditure MTPL (roughly € 10bn).Statistics show a large spread between European States and an West-East divide.
*) Source of data and graphs: CEA Statistics No. 38 – European Motor Insurance Market, publ. February 2010Slide4
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Bodily Injury Scenarios in Europe – Sample of Typical Cases
AccidentLossAmount*)Macedonia (Austria)British passenger severely injured (quadriplegia)
€ 17m (€ 8m)
Austria
British tourist bus, 48 passengers, hereof 35 injured, 5 fatalities
€ 14m (€ 9m)
Ireland
Latvian lady as passenger severely injured (quadriplegia)
€ 5,4m
Austria / Germany
One person injured, quadriplegiaMultiple injured, one severe (paraplegia)Up to € 8m€ 4 – 5m PolandInjured (paraplegic)€ 0,5 – 0,8mCzech Republic Injured (paraplegia)€ 0,8 – 1,2mRomaniaVarious losses of injured (severe bodily injuries) and fatality€ 125.000 – 750.000RomaniaPain & Suffering of injured and of relative€ 850.000€ 1,2m*) amount in brackets (€ 8m) reflects final settlement by insurerSlide5
Hypothetical victim – Tetraplegic
30-year-old man
Wife without own income2 children (aged 2 and 5)Average income from dependent employmentSevere spinal or head injury; no ventilation necessary; remains 100% disabled; cannot return to workHighest assistance levelCost components: loss of earnings, assistance, pain & suffering, remainderSlide 5
Swiss Re Bodily Injury Claims Landscape
- Benchmark Case - Slide6
Slide
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Swiss Re Bodily Injury Claims Landscape European Comparison 2010in mn €Slide7
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Swiss Re Bodily Injury Claims Landscape European Trends 2012
Poland (EUR)
Czech Republic (EUR)Slide8
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Key Drivers in Increase of Severe BI Claims
Capitalization tables
Increasing
welfare
Higher living standards
Increasing wages
Changes in society / social relationship
Increasing mobility
Increasing claims awareness
Life Expectancy
Superimposed inflation in medical and care sector
Trend to third party assistance in welfare states
Exploding Medical and Care Costs / Healthcare
costs
Discount rates
Changes in financial markets
From whom can I get compensation?
Stronger public awareness
Contingency fees/victim associations/TV
People live longer
Legal Changes
Enforcement of victim protection (EU)
Increasing compensation of non-material losses
Role of courts – victim friendly / but also restrictive re claims
Legal Systems
Different Settlement Methods
Annuities vs. Lump Sum (capitalization)
Settlement periods
Non-material losses; Pain & Suffering vs. Harm of Social Status
Recourse of social security systemSlide9
Medical costs (medical treatment in hospital and ambulant, rehabilitation, medical follow-up treatment)
Loss of Earnings during medical treatment and laterCare costs and assistance (monthly period, calculated on hourly or daily rates)
Pain & suffering of the injured (respectively additional disfigurement)Non-material compensation for relativesAdditional needs (prosthesis, wheelchair, conversion of flat, additional medical expenses, housekeeping loss)Funeral costsAlimony to family members (spouse, children)Lawyers- and court costs9Components of Bodily Injury Claims - OverviewSlide10
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Reserve Calculation - Bodily Injury Claim Motor Accident (Austria) - 2010
potential wage increase? carrier opportunities?
discount rate?
why here and not at care costs?
potential future increase of costs?
what is this amount in 54 years?
Life expectancy / mortality tables / retirement age?
Loss of Earnings / carrier opportunities?
Alimony of wife and children?
Home care or residential care?
Potential for lump-sum agreement?
Key Topics
justification for reduction of LE and proportion?Slide11
… one of the most complex topics in claims handling …consistent strategy and philosophy – what are the key topics for Romanian insurance industry?
… consider the individual elements of bodily injury claims, the requested medical treatment, rehabilitation or assistance… clear principles enable pro-active claims management and reduction costs
Therefore bear in mindbe prepared for special requirements and individual claims settlement as a part of a consistent claims strategySwiss Re is ready to assist and support developing a strategy for bodily injury claims and to provide an appropriate forum with experts for the discussion.11"… what is important for Severe Bodily Injury Claims?"Slide12
Thank you
Ulrich Werwigk, Attorney at Law
Swiss Re Europe S.A., German BranchEmail: Ulrich_Werwigk@swissre.comSlide13
Legal notice
©2012 Swiss Re. All rights reserved.
You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.Although all the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial and/or consequential loss relating to this presentation.13