RESEARCH BRIEF September 2018 By Robert Fogelson, Brett King, and Ziv Kimmel

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1 September 2018 By Robert Fogelson, Brett King, and Ziv Kimmel A Study of New York State Workers Compensation Motor Vehicle Accident Claims INTRODUCTION The purpose of this study is to provide insight into New York workers compensation motor vehicle accident ( MVA ) claims. To that end, the Rating Board examined detailed Unit Statistical Report data to identify how MVA claims differ from industrywide claims. Industrywide claims are workers compensation claims in the state of New York, including MVA claims. This study analyzes a variety of components including severity, loss development, and part of body, among others, to detail and determine the impact of MVA claims in the New York State workers compensation system. KEY FINDINGS The following findings relate to workers compensation MVA claims from policy years to 2015: The average cost of an MVA claim is one and a half to two times greater than the cost of an average workers compensation claim. The share of medical costs for an MVA claim is larger than that of an average workers compensation claim, which implies that medical costs are a significant driver of the higher than average observed severity. MVA claims represent a larger share of open claims than they do of total claims indicating that they take longer to close than typical claims. MVA claims represent a sizable portion of fatal and permanent total claims in the New York State workers compensation system. The distribution of MVA claims by injury type contains more fatal and permanent total claims than the industrywide distribution. On average, an MVA claim develops less than the average workers compensation claim. This is consistent with the development pattern observed for other claims by size of loss. 1 Claims from a policy year refer to all claims arising out of policies with an effective date within the specified year. NYCIRB 2018, All Rights Reserved.

2 MVA claims are far more likely to involve subrogation than other claims. Subrogated MVA claims are generally more severe than other MVA claims even after accounting for the subrogation. The severity and nature of MVA claims do not appear to be impacted by the employment classification of the worker. However, the mix of MVA claims versus non-mva claims impacts the overall severity of an employment classification. Surprisingly, MVAs account for only 17.8% of all claims for employment classifications that primarily involve driving. MVA claims have a different distribution of losses by injured part of body than the industrywide distribution. The severity of an MVA claim is directly correlated with the age of the claimant, which is consistent with the industrywide pattern by claimant s age at the time of injury. Although MVA claims are generally more severe than industrywide claims, they are not always the most severe claims by cause of injury. The most severe claims generally appear to be caused by falls from height. Claims caused by other falls are almost as severe as MVA claims and occur roughly four times more often. 2

3 STUDY DATA This study primarily utilizes the Rating Board s Unit Statistical Report (USR) data, which provides claim level detail such as loss amounts, cause of injury, part of body, and class code of the injured worker. Data from the New York State Workers Compensation Board was also used, such as information on claimants age at the time of injury. The data used in this study covers claims from policies written between 2006 and 2015 and is as reported to the Rating Board by insurance companies. This data is generally well validated because many of the fields are used in calculating the pure premium and loss cost information at the class level. The data in this study is as reported at each report level, 2 i.e., no development factors are applied. 2 The data is analyzed at the most recent report level, meaning that claims on policies written in 2015 are valued at 18 months from the policy effective date. Claims on policies written in 2014 are valued at 30 months from the policy effective date, and so on. 3

4 TABLE OF CONTENTS Section Page I. MVA Severity 5 II. Medical/Indemnity Split 7 III. MVA Claim Count and Claim Status Statistics 8 IV. Mix of Claims by Type of Injury 9 V. Loss Development 13 VI. Subrogation 14 VII. MVA Claims by Class of Worker 16 VIII. Part of Body Analysis 21 IX. Severity by Age 23 X. MVA Compared to Other Causes of Severe Claims 24 XI. Appendix 27 4

5 I. MVA Severity The Take Away: The average cost of an MVA claim is one and a half to two times greater than the cost of an average workers compensation claim. The Details: The severity, or total cost, of a workers compensation claim includes the total dollars paid to date as well as the amount expected to be paid out in the future for indemnity and medical benefits, which is held as case reserves. Claim values 3 are based on the latest reported information available from insurers. The average severity of MVA claims by policy year ranges from 154% to 201% of the average severity of industrywide claims 4 for that same policy year, indicating that MVA claims are costlier than average workers compensation claims. Consequently, MVA claims make up a larger percentage of industrywide dollars than they do of industrywide claim counts. Exhibit 1 displays the severity information for MVA claims versus all workers compensation claims over the most recent ten policy years. Exhibit 2 displays the percentage of MVA claims out of industrywide claims in terms of both total dollars and claim counts by policy year. 3 Claim values may change over time based on new payments and changes in case reserves. Therefore, the values for different policy years are at different maturities, and the information presented should not be used to draw conclusions on changes from year to year but rather on differences between MVA and industrywide claims. 4 As defined above in the Introduction, industrywide claims are workers compensation claims in the state of New York, including MVA claims. 5

6 Exhibit 1 MVA vs. Industrywide Claim Severity ($) Average Cost ($) 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 MVA Claims Industrywide Claims Policy Year Exhibit 2 Percentage of Industrywide Due to MVA Policy Year Total Dollars Claim Counts % 3.4% % 3.7% % 4.2% % 4.2% % 4.2% % 4.2% % 4.2% % 4.5% % 4.6% % 5.1% Weighted Average 7.1% 4.2% 6

7 II. Medical/Indemnity Split The Take Away: The share of medical costs for an MVA claim is larger than that of an average workers compensation claim, which implies that medical costs are a significant driver of the higher than average observed severity. The Details: For policy years 2006 to 2014, 5 incurred medical dollars for MVA claims range from 43.7% to 48.9% of total incurred dollars for MVA claims. For those same policy years, incurred medical dollars for industrywide claims range from 36.8% to 41.2% of industrywide incurred dollars. Given that the MVA average claim severity is higher than the industrywide average severity, the higher medical share for MVA claims implies that the medical average cost per claim is much greater than the average industrywide claim s medical cost. Thus, medical costs are a significant driver of the higher MVA claim costs. Exhibit 3 displays the distribution between medical and indemnity loss amounts for MVA claims versus industrywide claims over policy years 2006 to Exhibit 4 displays average medical and indemnity severities for MVA and industrywide claims over policy years 2006 to Exhibit 3 MVA Claims Medical vs. Indemnity Losses Policy Years 2006 to 2014 Industrywide Claims Medical vs. Indemnity Losses Policy Years 2006 to % 46.6% Medical Indemnity 61.5% 38.5% Medical Indemnity 5 Note that policy year 2015 was excluded from this section, because it is not sufficiently mature for use in this section. 7

8 Exhibit 4 Medical vs. Indemnity Severities ($) 6 25,000 Average Cost ($) 20,000 15,000 10,000 5,000 MVA Indemnity Industrywide Indemnity MVA Medical Industrywide Medical Policy Year 6 III. MVA Claim Count and Claim Status Statistics The Take Away: MVA claims represent a larger share of open claims than they do of total claims, indicating that they take longer to close than typical claims. The Details: MVA claims make up 3.4% to 5.1% of total claims for policy years 2006 to 2015, with that number increasing slightly in more recent policy years. However, MVA claims represent a higher percentage (5.2% to 8.7%) of open claims over the same period. The MVA share of open claims is twice that of the MVA share of total industrywide claims in the four most recent policy years. This ratio is around 1.5 in more mature policy years. This means that, on average, MVA claims remain open longer than non-mva workers compensation claims. Exhibit 5 displays the open share of MVA claims as well as the total share of MVA claims. 6 The average costs displayed in this exhibit reflect total claim counts, including medical only claims, for both the indemnity and medical categories. 8

9 Exhibit 5 Percentage Due to MVA 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% MVA Share of Industrywide Claims Policy Year Open Claims Total Claims IV. Mix of Claims by Type of Injury The Take Away: MVA claims represent a sizable portion of fatal and permanent total claims in the New York State workers compensation system. The distribution of MVA claims by injury type contains more fatal and permanent total claims than the industrywide distribution. The Details: Although fatalities and permanent total injuries do not occur as often as other types of injuries such as permanent partial or medical only, they are generally the most severe and cost significantly more than other injury types. In this section, we examine claims by type of injury as they pertain to MVAs. Although MVAs represent 4.2% of industrywide claim counts and 7.1% of industrywide loss dollars for policy years 2006 to 2015, they represent 22.3% of industrywide fatal claim counts and 8.8% of industrywide permanent total claim counts, as well as 16.9% of industrywide fatal dollars and 12.9% of industrywide permanent total dollars. Medical only MVA claims represent 3.4% of industrywide medical only claims and 8.5% of industrywide medical only dollars over the same timeframe, which is less than MVA s overall share of claim counts but more than their overall share of claim dollars. Based on this information, it is apparent that MVAs are more likely to result in lost-time claims 7 and have a higher potential to be very serious claims compared to other causes of injury. Exhibits 6 and 7 display the percentage of MVA claims out of industrywide claims for the various injury types. 7 Lost-time claims are claims for which injured workers receive indemnity payments to replace wages lost while recovering from injuries. These claims tend to be more severe than medical only claims as they have indemnity benefits in addition to medical benefits. 9

10 Exhibit 6 Percentage of MVA Claim Counts Out of Industrywide Claim Counts by Injury Type Policy Permanent Permanent Temporary Medical All Fatal Year Total Partial Total Only % 27.7% 9.0% 5.2% 3.9% 2.8% % 13.1% 10.3% 5.0% 4.3% 3.2% % 18.9% 8.4% 5.6% 4.6% 3.7% % 24.1% 5.9% 5.3% 4.8% 3.7% % 22.0% 10.9% 5.6% 4.3% 3.8% % 25.7% 6.1% 5.8% 4.3% 3.7% % 23.7% 11.3% 6.2% 4.4% 3.6% % 22.3% 11.9% 6.3% 4.6% 3.9% % 21.9% 5.4% 6.5% 5.1% 3.9% % 24.7% 11.8% 5.7% 6.6% 4.2% Weighted Average 4.2% 22.3% 8.8% 5.7% 4.8% 3.6% Exhibit 7 Percentage of MVA Dollars Out of Industrywide Dollars by Injury Type Policy Permanent Permanent Temporary Medical All Fatal Year Total Partial Total Only % 15.5% 9.6% 5.5% 4.9% 7.7% % 5.8% 11.0% 5.5% 8.4% 7.7% % 19.4% 11.3% 6.1% 6.6% 8.9% % 19.3% 6.0% 6.3% 6.7% 8.2% % 17.5% 16.1% 5.8% 6.8% 7.4% % 17.6% 9.7% 6.1% 6.2% 8.3% % 24.3% 34.4% 7.3% 7.9% 7.9% % 17.3% 8.2% 7.1% 6.9% 8.1% % 18.8% 2.2% 7.6% 7.2% 9.1% % 23.1% 53.7% 7.5% 10.3% 12.2% Weighted Average 7.1% 16.9% 12.9% 6.4% 7.4% 8.5% Another way to examine MVA claims by injury type is to compare the injury type distribution for MVA claims to that of the industrywide distribution. Fatal and permanent total injury types account for a much larger share of claim counts and dollars for MVA claims than these injury types do for industrywide claims. Over the study period, fatal and permanent total claims represent 0.7% of MVA claim counts and only 0.2% of industrywide claim counts. They also represent 10.7% of MVA dollars and only 5.5% of industrywide dollars over that same period. 10

11 These results can vary significantly from year to year. For example, in policy year 2012, these two injury types represent 16.0% of MVA dollars. 8 The more severe mix of injury type for MVA claims drives the higher severity and open claim ratios seen in Sections I and III above. Exhibits 8 and 9 show the percentage of fatal and permanent total claims for both MVA claims and industrywide claims by claim counts and dollars, respectively. The complete distributions by injury type for claim counts and claim dollars are included in Exhibits 8A and 9A in the Appendix. 0.5% 0.4% Exhibit 8 Percentage of Claim Counts by Injury Type Policy Years 2006 to 2015 Percentage 0.3% 0.2% 0.1% MVA Industrywide 0.0% Fatal Injury Type Permanent Total 8 This statistic is influenced by several large MVA claims in policy year 2012, including one claim with a total severity slightly exceeding $20M. 11

12 Exhibit 9 Percentage of Claim Dollars by Injury Type Policy Years 2006 to 2015 Percentage 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Fatal Injury Type Permanent Total MVA Industrywide Comparing the average cost per claim by injury type for MVA claims and industrywide claims yields results consistent with this study s findings. Medical only claims for MVAs cost more than twice the average for industrywide medical only claims. Permanent total and temporary total MVA claims cost, on average, roughly one and a half times the average industrywide claim for each of these injury types. Furthermore, all injury types, except fatalities, are more severe for MVA claims than for industrywide claims. Interestingly, fatal MVA claims cost roughly 75% of an average fatal claim. Since medical costs do not represent a significant portion of total costs for fatal claims, the difference in severity between MVA and industrywide fatal claims is likely to be a function of the differences in indemnity benefit components and the impact of subrogation, which is discussed in more detail in Section VI below. Exhibit 10 displays severity information for policy years 2006 to 2015 by injury type. 12

13 Exhibit 10 Severity ($) by Injury Type Policy Years 2006 to ,400,000 1,200,000 Average Cost ($) 1,000, , , , ,000 MVA Industrywide - Fatal Permanent Total Permanent Partial Injury Type Temporary Total Medical Only Severity ($) by Injury Type for Policy Years 2006 to 2015 Injury Type Industrywide MVA Percent Difference (MVA/Industrywide 100%) Fatal 381, , % Permanent Total 896,569 1,305, % Permanent Partial 89, , % Temporary Total 23,046 35, % Medical Only 1,036 2, % V. Loss Development The Take Away: On average, an MVA claim develops less than the average workers compensation claim. This is consistent with the development pattern observed for other claims by size of loss. The Details: Based on the data in this study, the average claim develops (grows) by a multiplicative factor of from 1 st report to 10 th report. For example, if a group of claims is estimated to cost $20,000 per claim on average at 1 st report, the average value of these claims could be estimated to be $41,000 after 10 years. Using a loss weighted average over all available data for policy years 2006 to 2014, MVA claims at 1 st report increase by a development factor of by 10 th report, which is a lower factor than the overall average. This result comports with 13

14 the generally held principle that larger claims tend to develop less than smaller claims, and the estimated value of MVA claims are larger than average claims. Further, since MVA claims are generally larger, the same dollar amount increase in incurred losses will result in a lower development factor when compared to smaller claims. Another possible explanation for the lower observed development, which is pertinent to MVA claims, is subrogation, which will be discussed in the next section. Exhibit 11 displays loss development factors (LDFs) derived from the data used in this study. Exhibit 11 Age-to-Age LDFs Claims 1 st to 2 nd 2 nd to 3 rd 3 rd to 4 th 4 th to 5 th 5 th to 6 th 6 th to 7 th 7 th to 8 th 8 th to 9 th 9 th to 10 th MVA Industrywide Cumulative Age-to-10 th Report LDFs Claims 1 st to 10 th 2 nd to 10 th 3 rd to 10 th 4 th to 10 th 5 th to 10 th 6 th to 10 th 7 th to 10 th 8 th to 10 th 9 th to 10 th MVA Industrywide VI. Subrogation The Take Away: MVA claims are far more likely to involve subrogation than other claims. Subrogated MVA claims are generally more severe than other MVA claims even after accounting for the subrogation. The Details: Following acceptance of a claim, an insurer is obligated to compensate the claimant for the duration of the claim. At times, however, a third party may be at fault for the claim. In these cases, an insurer may legally pursue the third party for a full or partial reimbursement of the cost incurred. When a claim is paid for entirely or partially by a third party, the claim is said to have been subrogated. The reported loss amount on a subrogated claim is net of any subrogation recovery, i.e., after recovering some of the loss amount from a third party. MVA claims are subrogated at a much higher rate than industrywide workers compensation claims. In more recent policy years, they are subrogated at a rate greater than ten times the rate of industrywide claims. The ratio of subrogation rates for MVA claims to industrywide claims decreases to roughly seven times as the policy years mature. This distinction may be caused by different subrogation processes employed for different types of subrogated claims. Subrogated MVA claims represent a significant portion of industrywide subrogated claims, especially when considering the small portion of industrywide claims that MVA claims represent in total. In general, the subrogation process can take several years to complete. For 14

15 recent policy years, MVA claims represent nearly 50% of all subrogated claims. This number trends downward toward 25% as policy years mature. This suggests that the subrogation process for MVA claims completes faster than it does for non-mva claims. Exhibit 12 displays subrogation information for both MVA claims and industrywide claims. Exhibit 13 displays subrogation information for MVA claims as a portion of industrywide claims. Exhibit 12 Percentage of Industrywide Claims Subrogated Percentage of MVA Claims Subrogated Policy Year Dollars Counts Dollars Counts % 2.0% 22.7% 13.9% % 2.0% 25.3% 14.0% % 2.1% 25.9% 15.8% % 1.9% 22.7% 14.8% % 1.8% 23.1% 15.1% % 1.7% 23.2% 13.5% % 1.4% 19.1% 13.2% % 1.3% 14.6% 12.1% % 1.0% 10.7% 10.0% % 0.6% 5.0% 5.8% Exhibit 13 Percentage of Industrywide Subrogated Claims Due to MVA Policy Year Dollars Counts % 23.8% % 25.6% % 31.6% % 33.3% % 35.4% % 34.5% % 38.4% % 41.9% % 48.1% % 51.8% Subrogated MVA claims, even after recoveries, are still more severe than non-subrogated MVA claims. On a policy year basis, they tend to be one and half to two times the size of nonsubrogated claims. This phenomenon may be influenced by an insurer s discretion at seeking subrogation on smaller claims where the expected recovery amount may not offset the expense costs of seeking the recovery. Furthermore, the largest recoveries happen on the largest losses. 15

16 In many severe cases, even after insurers recover a large portion of the claim, the remainder could still be quite large. Exhibit 14 displays severity information for both subrogated and nonsubrogated claims. 70,000 60,000 Exhibit 14 Severity ($) of MVA Claims Average Cost ($) 50,000 40,000 30,000 20,000 10,000 Subrogated Non-Subrogated Policy Year VII. MVA Claims by Class of Worker The Take Away: The severity and nature of MVA claims do not appear to be impacted by the employment classification of the worker. However, the mix of MVA claims versus non-mva claims impacts the overall severity of an employment classification. Surprisingly, MVAs account for only 17.8% of all claims for employment classifications that primarily involve driving. The Details: For the purposes of this study, employment classifications were divided into 3 categories: Category 1 Classes that are inherently drivers as the main function of employment (e.g., trucking and taxi driver classifications). The complete list of these classes can be found in Exhibit 15A of the Appendix. Category 2 Classes that include drivers in the classification description but are not considered in the first group (e.g., class code 9072, which represents Restaurant - Fast Food - and Drivers ). 16

17 Category 3 All classes not included above, meaning that they do not necessarily indicate a direct exposure to driving (e.g., class code 8810, which represents Clerical Office Employees Not Otherwise Classified ). Examining MVA severity by class category, category 2 claims have the highest average severity in total and category 3 claims have the lowest average severity in total. However, while MVA claims have significantly higher severity than industrywide claims, there does not appear to be a clear distinction of severity across categories. Some variation by policy year is expected, as the severity differences are generally random due to large losses that can have a significant impact in some years. Information regarding severity for MVA claims by class category is displayed in Exhibit 15. The color shading in the exhibit is added to highlight the highest (red) and lowest (green) values. Exhibit 15 MVA Severity ($) by Class Class Category Policy Year ,391 34,861 27, ,441 46,798 27, ,940 32,419 38, ,257 35,635 33, ,087 40,326 34, ,044 35,076 36, ,902 60,045 38, ,329 44,123 33, ,646 39,045 31, ,401 30,340 27,453 Weighted Average 36,334 39,778 32,836 All three class categories have a very similar injury type distribution for MVA claims. This implies that the result of an MVA is similar despite class category. Exhibit 16 displays the MVA loss distribution by injury code for each class category, as well as the MVA loss composition of each injury code by class category. The results of these exhibits seem consistent by both injury code and class category, despite small variations, which are expected. 17

18 Exhibit 16 MVA Dollars by Injury Type for Class Category 1 Policy Years 2006 to 2015 Medical Only 3.6% Fatal 3.5% Permanent Total 7.0% MVA Dollars by Injury Type for Class Category 2 Policy Years 2006 to 2015 Medical Only 3.0% Fatal 3.4% Permanent Total 8.5% Temporary Total 23.9% Temporary Total 22.2% Permanent Partial 61.9% Permanent Partial 62.8% MVA Dollars by Injury Type for Class Category 3 Policy Years 2006 to 2015 Medical Only 4.1% Temporary Total 26.1% Fatal 4.2% Permanent Partial 59.9% Permanent Total 5.7% Percentage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MVA Dollar Breakdown by Class Category Policy Years 2006 to 2015 Category 3 Category 2 Category 1 Injury Type 18

19 As previously mentioned, MVA claims are more severe than other claims. Therefore, it should be expected that the total average claim severity for class categories with a higher proportion of MVA claims would be higher. This expectation is proved true in this study. An examination of the industrywide average severities of the different class categories (including all claims not just MVAs) shows that there is a severity distinction among the categories. This distinction is a direct consequence of the overall mix of causes of injury by category. Since class category 1 has the highest percentage of claims due to MVAs, the expectation is that this category will have the highest severity, and that expectation is confirmed in the subsequent exhibits. Exhibit 17 displays total severity information by class category, while Exhibit 18 displays the corresponding percentage of claims due to MVAs for each class category. The color shadings in these exhibits are added to highlight the highest (red) and lowest (green) values. Exhibit 17 Total Severity ($) by Class Class Category Policy Year ,320 20,387 18, ,965 20,811 19, ,839 22,513 20, ,208 23,968 21, ,322 23,223 22, ,892 24,324 21, ,612 25,257 20, ,242 25,601 20, ,963 23,303 19, ,069 18,634 14,749 Weighted Average 28,258 22,849 19,924 19

20 Exhibit 18 Percentage of Claims Due to MVA Class Category Policy Year % 3.4% 2.4% % 3.7% 2.7% % 4.3% 2.9% % 4.3% 2.8% % 4.5% 2.7% % 4.5% 2.8% % 4.3% 2.8% % 4.7% 2.8% % 4.6% 3.0% % 5.1% 3.4% Weighted Average 17.8% 4.4% 2.8% Interestingly, class category 2 (classes with partial exposure to driving) only has a slightly higher proportion of MVA claims than class category 3 (classes with no inherent exposure to driving). Class category 1 (classes with major exposure to driving) has the highest proportion of claims due to MVA, as expected. However, with 17.8% of claims and 22.9% of loss amounts caused by MVAs in class category 1, many other common causes of injury also affect the classes with major exposure to driving. Exhibit 19 displays the top five non-mva causes of injury for claims in class category 1. Exhibit 19 Percentage of Claim Counts by Cause of Injury in Class Category 1 for Policy Years 2006 to Injury Cause Code Description Percent 56 Lifting 12.0% 57 Pushing or Pulling 6.9% 99 Other Miscellaneous, NOC 6.1% 31 Fall, Slip, or Trip, NOC 6.0% 60 Strain or Cause By, NOC 5.6% 9 Exhibit 19 includes information from private carriers only. 20

21 VIII. Part of Body Analysis The Take Away: MVA claims have a different distribution of losses by injured part of body than the industrywide distribution. The Details: Over policy years 2006 to 2015, the distribution of losses by part of body is different for MVA claims when compared to the distribution for industrywide claims. In particular, Multiple Body Parts (Code 90) made up 24.7% of all MVA claim counts but only 6.4% of industrywide claim counts over the same period. When combining parts of body into groups, Upper & Lower Extremities accounted for 58.6% of industrywide claim counts but only 24.5% of MVA claim counts. Further, Neck accounted for 16.2% of MVA claim counts and 3.8% of industrywide claim counts. Exhibit 20 displays percentages of MVA claims by part of body group, for both counts and loss amounts, as well as percentages of industrywide claims for comparison. Exhibit 20A in the Appendix displays similar percentages for specific parts of body. 21

22 Exhibit 20 Percentage of Claim Counts by Part of Body Group Policy Years 2006 to % 35.0% 30.0% Percentage 25.0% 20.0% 15.0% 10.0% 5.0% MVA Industrywide 0.0% Head Neck Upper Extremities Trunk Lower Extremities Multiple Part of Body Group Percentage of Claim Dollars by Part of Body Group Policy Years 2006 to % 30.0% Percentage 25.0% 20.0% 15.0% 10.0% 5.0% MVA Industrywide 0.0% Head Neck Upper Extremities Trunk Lower Extremities Multiple Part of Body Group Percentage of Claim Dollars and Claims Count by Part of Body Group Policy Years 2006 to 2015 POB Group MVA Counts Industrywide Counts MVA Dollars Industrywide Dollars Head 8.1% 10.1% 11.2% 6.4% Neck 16.2% 3.8% 14.5% 6.8% Upper Extremities 13.0% 37.2% 11.1% 25.6% Trunk 22.8% 18.8% 25.5% 29.9% Lower Extremities 11.5% 21.4% 12.8% 20.4% Multiple 28.4% 8.7% 24.9% 10.9% 22

23 In addition to having a different distribution of claim counts by part of body when compared to industrywide claims, MVA claims have a different severity distribution as well. For industrywide claims, Head injuries tend to be the least severe claims, which is primarily due to a high proportion of medical only claims for head injuries. For MVA claims, Head injuries are typically the most severe, as the proportion of medical only MVA Head injuries is lower. Upper Extremities, Lower Extremities, and Trunk injuries tend to be more severe for MVA claims as well, although the disparity is more consistent with the overall MVA to industrywide severity difference. Neck injuries are more common in MVA claims, as displayed in Exhibit 20, but they are significantly less severe, especially when considering the overall MVA to industrywide claim severity ratio. Exhibits 21 and 22 display severity information by part of body ( PoB ) group for MVA claims and industrywide claims, respectively. Exhibits 21A and 22A in the Appendix display severity information by policy year for all MVA and industrywide claims, respectively. Exhibits 21B and 22B display the same information but for lost-time claims only. Exhibit 21 MVA Severity ($) by PoB Group for Policy Years 2006 to 2015 POB Group Medical Only Lost-Time All Head 2, ,063 49,718 Neck 2,400 72,875 31,956 Upper Extremities 1,794 60,672 30,797 Trunk 3,033 78,112 40,035 Lower Extremities 1,950 68,883 39,953 Multiple 2,539 66,588 31,406 Exhibit 22 Industrywide Severity ($) by PoB Group for Policy Years 2006 to 2015 POB Group Medical Only Lost-Time All Head ,590 13,489 Neck 1,728 88,628 38,622 Upper Extremities ,319 14,689 Trunk 1,565 70,845 33,970 Lower Extremities 1,016 44,525 20,344 Multiple 1,277 72,305 26,792 IX. Severity by Age The Take Away: The severity of an MVA claim is directly correlated with the age of the claimant, which is consistent with the industrywide pattern by claimant s age at the time of injury. 23

24 The Details: For MVA claims, the severity increases as the claimant s age at the time of injury increases. This is consistent with previous results published in NYCIRB s 2017 Regional Study. 10 According to data for age of claimant at time of injury obtained from the New York Workers Compensation Board, the youngest group of claimants have losses of about $30,000 per claim. This number steadily increases until it levels off at near $60,000 for older claimants. Exhibit 22 displays the average cost of MVA claims for different age groups of claimants. Exhibit 23 Age Group Average Cost ($) , , , , , ,927 X. MVA Compared to Other Causes of Severe Claims The Take Away: Although MVA claims are generally more severe than industrywide claims, they are not always the most severe claims by cause of injury. The most severe claims generally appear to be caused by falls from height. Claims caused by other falls are almost as severe as MVA claims and occur roughly four times more often. The Details: For the purpose of this section, claims will be categorized into one of four cause of injury categories: MVA, fall from height, other fall, and other cause. MVAs, which have been the focal point of this study, are less severe than falls from height, more severe than other falls, and significantly more severe than other causes. For example, when considering policy years 2008 to 2012, 11 MVA lost-time claims cost $80,331 on average, while lost-time claims caused by falls from height, other falls, and other causes cost $98,357, $65,660, and $53,084, respectively, on average. Examining the distribution of claim costs by cause of injury provides more in-depth understanding of the differences between the four cause of injury categories. For example, 25% 10 Visit to access the Rating Board s 2017 Regional Study. 11 Policy years 2008 to 2012 were used in this section to avoid years prior to the 2007 reform and to minimize the distortion from mixing claims with early maturities that are less developed. 24

25 of MVA lost-time claims are above $73,790, which represents the 75 th percentile. 12 This is significantly less than the corresponding loss amount for fall from height lost-time claims of $94,909 and more than the corresponding loss amounts for other fall lost-time claims and other cause lost-time claims of $67,849 and $50,206, respectively. Certain patterns become evident by examining the distributions further. In the lower percentiles, MVA claims have the highest severity among the four cause of injury categories. For example, at the 10 th percentile, MVA claims cost $2,757, which is more than the other three corresponding 10 th percentiles. However, in the higher percentiles, fall from height claims are the most severe and MVA claims are the second most severe. For example, at the 90 th percentile, MVA claims cost $197,573, which is less than fall from height claims that cost $245,173, and more than the other two categories. Exhibit 24 displays various statistics for these different causes of injury for policy years 2008 to Exhibit 24A in the Appendix displays three views of the same curve that was used to derive the percentile statistics seen in Exhibit 24. Exhibit 24 Lost-Time Claim Severity ($) by Cause of Injury for Policy Years 2008 to 2012 Cause of Injury Statistic MVA Fall from Height Other Fall Other Cause Average Cost 80,331 98,357 65,660 53, th Percentile 2,757 2,380 1,903 1, th Percentile 8,335 7,185 5,383 3,701 Median (50 th Percentile) 28,419 31,283 22,432 13, th Percentile 73,790 94,909 67,849 50, th Percentile 197, , , ,875 Percent Share of Dollars 6.9% 7.4% 24.1% 61.6% Percent Share of Claim Counts 5.1% 4.5% 21.7% 68.7% When looking at these four categories and including medical only claims, similar patterns are evident. The same average cost hierarchy is observed for all claims. When including all claims, fall from height claims are more severe than MVA claims at every recorded percentile with the exception of the 25 th. The inclusion of medical only claims has a small impact on total loss amounts for each of the cause of injury categories, but a large impact on claim counts, severities, and loss percentiles. The difference in percentiles from what was shown above is a result of the proportion of medical only claims in each category. Exhibit 25 displays the same information as Exhibit 24, but for all claims as opposed to just lost-time claims. Exhibit 25A in the appendix displays three views of the same curve that was used to derive the percentile statistics seen in Exhibit The 75 th percentile represents a claim amount for which 75% of claims are at or below and 25% (100% - 75%) are above. This definition of percentile applies throughout this section. 25

26 Exhibit 25 Claim Severity ($) by Cause of Injury for Policy Years 2008 to 2012 Cause of Injury Statistic MVA Fall from Height Other Fall Other Cause Average Cost 37,556 54,219 30,192 18, th Percentile th Percentile Median (50 th Percentile) 2,776 3,559 1, th Percentile 23,821 37,905 17,503 5, th Percentile 85, ,617 78,385 41,516 Percent Share of Dollars 6.9% 7.3% 24.0% 61.8% Percent Share of Claim Counts 4.2% 3.1% 18.2% 74.5% By comparing Exhibits 24 and 25, it is clear that there are many medical only claims in the other cause category and relatively fewer in the three other categories. Notably, there was a significant drop in percent of claim counts due to falls from height when medical only claims were included. There was a smaller decrease in percent of claim counts due to MVAs when medical only claims were included, which was similar to the decrease in the other fall category. Proportionally, falls from height have the least medical only claims, and fewer medical only claims are caused by MVAs than by other causes (excluding both falls from height and other falls). 26

27 XI. APPENDIX Exhibit 8A MVA Claim Counts by Injury Type Policy Years 2006 to 2015 Fatal 0.5% Permanent Total 0.2% Permanent Partial 22.0% Industrywide Claim Counts by Injury Type Policy Years 2006 to 2015 Fatal 0.1% Permanent Partial 16.3% Permanent Total 0.1% Medical Only 53.2% Temporary Total 24.1% Medical Only 62.1% Temporary Total 21.5% Exhibit 9A Medical Only 3.6% MVA Dollars by Injury Type Policy Years 2006 to 2015 Fatal 3.7% Permanent Total 7.0% Industrywide Dollars by Injury Type Policy Years 2006 to 2015 Medical Only 3.0% Fatal 1.6% Permanent Total 3.9% Temporary Total 24.2% Permanent Partial 61.5% Temporary Total 23.3% Permanent Partial 68.3% 27

28 Exhibit 14A Class Category 1 Class Code Class Description 7197 Trucking-Parcels or Packages-Home Delivery from Retail Stores-& Drivers 7219 Trucking NOC-All Employees-& Drivers 7231 Messenger Service Companies-Delivering Mail, Parcels or Packages-All Employees-& Drivers 7364 Independent Livery Drivers 7368 Taxicab or Livery Employees-& Drivers 7377 Limousine or Livery Employees-& Drivers 7380 Drivers and Helpers NOC-Commercial 8394 Ambulance Operation-Ambulance Workers-Not Volunteer-All Other Employees & Drivers 8751 Route Salespersons and Route Supervisors 9402 Street Cleaning & Drivers 9403 Garbage, Ashes or Refuse Collection & Drivers 28

29 Exhibit 20A Percentage of Claim Dollars and Claims Count by Part of Body Policy Years 2006 to 2015 POB MVA Industrywide MVA Industrywide POB Code Counts Counts Dollars Dollars 90 Multiple Body Parts 24.7% 6.4% 22.3% 9.1% 25 Soft Tissue 9.7% 1.6% 7.8% 3.1% 42 Lower Back Area 16.7% 13.1% 17.6% 22.4% 20 Multiple Neck Injury 3.1% 0.6% 2.6% 1.0% 10 Multiple Head Injury 4.5% 2.7% 5.3% 3.1% 22 Disc 1.4% 0.4% 3.0% 1.9% 38 Shoulder(s) 4.7% 6.0% 5.6% 10.2% 31 Upper Arm 1.3% 2.4% 1.3% 2.7% 61 Abdomen 0.3% 1.4% 0.3% 0.7% 32 Elbow 0.8% 2.0% 0.4% 1.5% 33 Lower Arm 1.3% 2.7% 1.2% 1.9% 56 Foot 2.0% 3.5% 1.1% 2.1% 37 Thumb 0.3% 2.8% 0.1% 0.6% 14 Eye(s) 0.3% 3.0% 0.3% 0.4% 34 Wrist 1.7% 4.3% 0.9% 3.0% 55 Ankle 1.3% 4.5% 1.3% 3.1% 53 Knee 4.1% 8.2% 4.2% 10.1% 35 Hand 1.3% 6.4% 0.8% 2.8% 36 Finger(s) 0.6% 9.3% 0.2% 1.6% 29

30 Exhibit 21A MVA Severity ($) by Part of Body Group 13 Policy Year POB Group Head 53,571 67,105 28,985 42,055 49,297 45, ,238 33,160 27,538 34,469 Neck 26,405 30,696 28,470 30,185 34,091 32,417 34,586 43,622 33,056 27,243 Upper Extremities 23,226 27,823 32,778 26,457 31,532 31,797 33,538 36,151 34,238 28,324 Trunk 50,289 40,688 45,448 45,260 42,224 40,049 45,653 37,552 34,327 27,700 Lower Extremities 31,958 39,836 38,257 38,762 39,802 41,653 46,599 44,545 43,953 32,689 Multiple 25,722 28,981 33,562 30,652 28,957 29,208 33,288 30,892 33,237 38,470 Exhibit 22A Industrywide Severity ($) by Part of Body Group 13 Policy Year POB Group Head 12,726 14,322 11,216 14,601 12,085 16,142 15,191 14,380 13,845 10,082 Neck 27,175 32,931 30,456 36,837 53,062 50,127 51,557 53,787 44,055 31,558 Upper Extremities 11,732 13,091 14,046 14,624 15,648 15,228 16,195 16,860 15,777 13,388 Trunk 38,286 39,101 41,010 38,766 35,439 36,107 33,289 32,634 27,603 19,323 Lower Extremities 17,343 18,267 19,647 20,353 22,080 21,591 21,552 22,721 21,470 17,925 Multiple 21,053 22,820 27,930 28,232 29,578 29,868 30,190 27,633 28,421 25, The color shadings in these exhibits are added to highlight the highest (red) and lowest (green) values by policy year. 30

31 Exhibit 21B MVA Lost-Time Severity ($) by Part of Body Group 13 Policy Year POB Group Head 118, ,135 81, , , , ,021 84,096 74,385 81,213 Neck 54,687 70,106 70,688 77,539 78,594 78,756 78, ,026 69,804 54,938 Upper Extremities 44,676 56,568 68,807 55,372 68,646 63,128 63,947 70,511 66,482 49,381 Trunk 93,387 74,487 89,230 88,048 85,650 83,988 89,665 73,401 67,036 51,514 Lower Extremities 58,846 71,132 68,379 65,346 66,693 75,644 79,325 77,329 71,171 54,077 Multiple 54,468 67,976 73,802 67,947 67,010 63,650 71,790 64,765 64,227 69,453 Exhibit 22B Industrywide Lost-Time Severity ($) by Part of Body Group 13 Policy Year POB Group Head 68,200 79,104 61,062 81,567 66,762 87,651 79,066 71,488 64,712 42,535 Neck 62,579 79,742 76,935 97, , , , ,981 91,701 62,515 Upper Extremities 34,058 37,669 40,050 40,326 43,069 43,191 44,273 44,280 41,340 34,034 Trunk 83,251 81,230 84,396 79,113 75,142 76,724 70,406 67,989 57,066 38,361 Lower Extremities 39,842 41,450 43,932 45,051 49,034 48,198 47,079 48,426 44,918 36,797 Multiple 56,300 67,166 78,522 77,412 79,071 80,334 82,408 77,322 71,306 59, The color shadings in these exhibits are added to highlight the highest (red) and lowest (green) values by policy year. 31

32 Exhibit 24A Severity ($) Curves for Lost-Time Claims by Cause of Injury Policy Years 2008 to ,000 35,000 30,000 Cost ($) 25,000 20,000 15,000 10,000 5,000 Fall from Height MVA Other Fall Other Cause 0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Percentile 410, , ,000 Severity ($) Curves for Lost-Time Claims by Cause of Injury Policy Years 2008 to 2012 Cost ($) 260, , , ,000 60,000 Fall from Height MVA Other Fall Other Cause 10,000 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Percentile 32

33 Severity ($) Curves for Lost-Time Claims by Cause of Injury Policy Years 2008 to , , ,000 Cost ($) 625, , , , ,000 Fall from Height MVA Other Fall Other Cause 125,000 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% Percentile 33

34 Exhibit 25A Severity ($) Curves for All Claims by Cause of Injury Policy Years 2008 to ,000 3,500 3,000 Cost ($) 2,500 2,000 1,500 1, Fall from Height MVA Other Fall Other Cause 0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Percentile 301,000 Severity ($) Curves for All Claims by Cause of Injury Policy Years 2008 to ,000 Cost ($) 201, , ,000 51,000 Fall from Height MVA Other Fall Other Cause 1,000 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% Percentile 34

35 Severity ($) Curves for All Claims by Cause of Injury Policy Years 2008 to 2012 Cost ($) 750, , , , , , ,000 50,000 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% Percentile Fall from Height MVA Other Fall Other Cause 35