Mr BAYLEY - It's a bit of a segue, from that line of questioning in that the annual report. It shows claims have been steadily decreasing. It also highlights that fatalities, as you said, spiked in 2021 22 and even this year remain above average. Does this data show there's a decrease in accidents but they're more severe? How do you unpack this data? Then I have some follow ons on claims.
Mr KINGSTON - Yes, Tasmania over many decades had a sharp decline in our number of crashes. Over the last several years, it's plateaued and even started to increase. That's mirrored pretty much nationally. Each jurisdiction goes up and down at different times but over the last couple of years, nearly every jurisdiction's had a year where their fatalities have gone up much higher and it's all post COVID-19. No-one's really sure why that has occurred, but we are seeing that. We're still experiencing the same number of crashes in Tasmania, if not slightly more, but we're getting less in claims. The real driver appears to be safer cars. We still have the oldest vehicle fleet in Australia.
Mr BAYLEY - Yes, I was going to ask about that.
Mr KINGSTON - We're still getting benefit from those safer vehicles coming in. There's been a heavy investment in our major road systems. We're getting safer roads. A safe system for road design helps build in protections when people make mistakes. Wire road barriers and other run off protection stop accidents being worse. We're getting fewer claims from more crashes and generally less serious claims as a trend. That is what we're seeing. Despite the increase in fatalities and serious injuries over the last couple of years, our claim numbers have continued to decline.
Mr BAYLEY - On those claims, is the time it takes to complete and finalise them increasing or decreasing? How are you performing there?
Mr KINGSTON - We probably don't measure where the claim ends so much. What we do is make sure we respond very quickly when we accept claims. It's something like just under 99 per cent of our claims, once we have all the information, are either accepted or we come back with a response. Also, just under 99 per cent we have what we call our first contact
Where we call the client and go, 'Okay, we've accepted you. Here's the things we can do to help you through the health system', which can be difficult if people haven't been through it before. We respond very quickly upfront. How long a claim takes to resolve is, really, the different journey that the client goes under. Something like 70 per cent to 80 per cent of our claims are under $20 000 in total cost. They're small claims. People have some injuries, get a little bit of rehab or some wage displacement to help them ease back to work, and then they're gone. Most of those resolve within two to three years, but we obviously have our lifetime care clients, who will be for life.
We have just started a new stream of claims we've taken out of our claims staff. We used to have two streams, which were scheduled benefits - the smaller, less highly complex injuries; and our lifetime care. We've put in a third stream now called supported claims, which is trying to pick those people up who are showing signs they're not recovering quickly. It might be that they've got secondary mental health impacts or just don't seem to be getting back on track. We are putting more intensive efforts to try to get those claimants back on track earlier, so they don't continue on for too long.
We've only just started to implement that and will formalise it this year. It'll take a couple of years until we work out and can prove with the data where that went. We know, because we manage each one of our near 2000 claims each year personally. We don't just manage them remotely. From the strong feedback from clients it's really helping them. We're looking at different ways of trying to make it better in the long term.
Mr BALCOMBE - The point is that all clients receive some form of support, generally financially or via supported services. But the actual close-out of a claim can be dependent on individual circumstances of the client. Then Paul alluded to common law claims, where they can be complex and often take years. A handful will often take years.
Mr BAYLEY - You can't close them out until that action is completed.
Mr BALCOME - It's legal issues and things like that come through; proof of damage and medical investigations and ongoing things like that. There's no real clean cut off for the claims.
Mr BAYLEY - Claims paid out were $44 million less than budgeted for, if I read the annual report correctly. I am curious as to why this is the case. It looked like there was only 1 per cent fewer crashes.
Mr BALCOMBE - I think I've covered that. It's the vagaries of accounting. From a perspective of the claim to payments made, we've actually paid $104 million in the year in cash terms. The valuation of the claims liability impacts on the claims expense that goes through the [inaudible].
Mr BAYLEY - Over the last four years the claims have been less than budgeted for and I'm hearing there are clear reasons for that. Is there a position, or do you have any view on MAIB offering a premium discount or charging when we're in a cost-of-living crisis, so there's a case for MAIB charging less in a premium context for the services it offers and passing that down to customers? What is your view on that?
Mr FERGUSON - Mr Bayley, we will both have a response here. The premiums are not as arbitrarily set as that. They are actually subject to review by the Tasmanian Economic Regulator, so there is a fair degree of independence in premium setting in relation to assessing scheme costs and the capability of the fund to meet future claims. I will invite the Chair to talk about that process and in particular the way the actuary will make advice available to the Economic Regulator.
The regulator undertook a pricing investigation in 2021 and provided its report in the same year, and then the order was issued as a result of that review, which establishes the maximum MAIB premium for each class of vehicle for the upcoming four years. Then from year to year an order is further made as to whether there needs to be general premium increases, or in some cases, as have happened, premium decreases. Perhaps the Chair can add to that as well.
Mr BALCOMBE - There are a couple of aspects to this. Certainly we have a lens to the cost of living. In fact, we have a 2.5 per cent increase on our premiums which takes place on 1 December. That is our first price rise in nine years. We've had reductions up until this current price rise we've had, so in effect we're paying less than we were 20 years ago. Back in 2002 we were paying more for MAIB premiums. We have built up a very sustainable fund. I have to congratulate the prior boards and management on that because we've made the fund quite sustainable, coupled with the fact that we have seen continued reductions.
It's a fine balance because we've got to make sure we've got sustainable funding into the future and the board deliberated long and hard about the price increase we're going to have this year, but we were concerned that one of the things we are facing is increased costs of care in particular, so we had a tender for our attendant care contracts and the care in our assisted care premises. We saw a 10 per cent price rise on that, so we've absorbed the vast majority of that by taking on a 2.5 per cent price increase and that tender is for a period of four years.
We're seeing enormous price pressures with regard to a general surprise in wages in our business. The highest cost we have is access to care. It's been greatly impacted by the advent of NDIS, because there is severe competition in the market for that. We have undertaken to see what we can do to increase the pool of available resources in the state.
We had a very good tender outcome where we've got a very strong panel. We've secured Anglicare to continue to run care within out specialised premises, which is fantastic. We have to keep a lens to those ongoing increasing costs. It's always going to be a fine balance and we will do everything we can to keep the premium as low as we can.
