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@8 OLIVER WYMAN
Executive Summary
Workers Compensation Unpaid Losses & ALAE
City of Chandler
Data evaluated as of June 30, 2021
Unpaid Losses & ALAE
as of 6/30/21:
$10,458,761
Unpaid Losses & ALAE
as of 6/30/20:
2020/2021 Ultimate Losses & ALAE
as of 6/30/20
$2,555,000
+5.7%
2.6%
2.0% 2.0%
-1.0%
Total Exposure Limit Loss Change in
Change Growth Change Trend Selection
2021/2022 Ultimate Losses & ALAE
as of 6/30/21
$2,700,000
© Oliver Wyman
Scope of Analysis
¢ Estimated unpaid losses and allocated loss
adjustment expense (ALAE) as of June 30, 2021
for accidents occurring between January 1, 2003
and June 30, 2021 at an actuarial central
estimate and various probability levels
* Projected ultimate losses and ALAE for policy
period July 1, 2021 — 2022 at an actuarial central
estimate and various probability levels
Important Assumptions
* All estimates are limited to the City’s self-insured
retentions, which increased from $500,000 to
$600,000 per-occurrence effective 7/1/12, to
S1M for police / fire effective 7/1/15, to $1.25M
for police / fire effective 7/1/18, to $750,000 /
$2.25M effective 7/1/20 and to $1M /$3M
effective 7/1/21.
Key Findings
* The unpaid estimate has increased by
approximately $1.7M due to the experience in
7/1/20-21 policy year, which already has seven
claims exceeding $75k, including a police officer
COVID claim with $1.1M in case reserves.
* The forecast for 21/22 is up 5.7% from the prior
forecast due to increases in payroll and the
retained limits.
Actual vs. Expected Results
$1.25M
$1.00M
$0.75M
Reported Losses & ALAE 6/30/20 to 6/30/21
Actual Expected AvE
$1,465,601 $1,049,346 $416,255
Ultimate Losses & ALAE 6/30/20 to 6/30/21
Prior Current Change
$34,617,455 $35,594,116 $976,661
mOver Expected Under Expected OExpected
$0.50M ~~~
$0.25M
0
13/14 14/15 15/16 16/17 17/18 18/19 19/20
Accident Year
Actual versus Expected results reflect changes
in the claims from 6/30/20 to 6/30/21.
oer hene ere Workers Compensation Unpaid Losses & ALAE Racer! ed ligeebcni
Executive Summar
Ultimate Loss Cost
econciliation of Reserves
Trend Assumptions
ur Actuarial Team
oa * The selected frequency trend is
1000 { -0.5%. Beginning of Period Unpaid Losses as of 6/30/20 $8,795,715 Adam Hirsch, FCAS, MAAA
pee * The selected severity trend is 2.5%. Plus Estimated Ultimate Li for 7/1/20 -6)30124 Principal
; us Estimat imate Losses for - ’
aco * The selected loss cost trend is 2.0%. $3,515,000 adam.hirsch@oliverwyman.com
zee . he | d 5 213-346-5352
a area : The loss cost and severity trends are Plus Change in Ultimate Losses through 6/30/21 $16,661
&. a my Pw oh us Ry adjusted to the current benefit level.
* The loss cost and severity trends are Less Actual Payments (6/30/20-6/30/21) $1,868,615
shown at a per occurrence retention
anme of $75,000. End of Period Unpaid Losses as of 6/30/21 $10,458,761
$12k ? * The combination of negative
se ] frequency trend and rising severity is zs
$ak municipalities and WC in general.
sk Vers Claim Changes Since Prior Report Los Angeles Office:
° © co ~ Key Findings 633 West Fifth St., Suite 1200
or wre Bg? gPe Gurrent Current Incurred — Current. Los Angeles, CA 90071
* Frequency has remained relatively Claimant Date ofloss Status Incurred Prior Incurred Change Paid
stable, if not decreasing slightly, over CN-21-005148 12/27/2020 ~O $1,106,036 $0 $1,106,036 $23,802 www.0liverwyman.com
ore ote ler ek the past 10 years, ranging from 1.0 CN-18-005439 3/6/2018 +o. $627,354 $192,181 $435,173 $183,359
=n to 1.5 claims per million dollars of CN-17-005633 4/20/2017 0 $533,992 $149,744 $384,248 $155,289
+50 payroll. CN-03-0500013 2/12/2003 «0 $759,016 $536,033 $222,984 $530,981
1.00 4 * Severity, with claims limited to CN-21-005129 12/7/2020 0. $184,857 $0 $184,857 $158,588
0.50 $75,000, has ranged from $7,000 to CN-21-005153 12/29/2020 -O $145,605 $0 $145,605 $12,140
0.00 $12,000, and is generally increasing. CN-08-0500047 9/13/2007 0 $125,775 $1,593 $124,183 $5,813
Ry Y. Aa wy a Sar BoP * The loss cost, with claims limited to CW-13-005205 3/19/2013 9 $329,972 $209,587 $120,415 _ $207,415
NN SNS $75,000, has ranged from $8 to $13 cn-21-005190 3/11/2021 0 $107,351 So $107351 $58,669
per thousand dollars of payroll.
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