Components of Bodily Injury Claims
– A European Perspective –
FIAR – International Insurance-Reinsurance Forum 2012
Ulrich Werwigk, Swiss Re Europe S.A. German Branch;
Munich
Agenda and Topics

Bodily Injury Claims in Europe

Bodily Injury Scenarios in Europe – Sample of Typical Cases

Swiss Re Bodily Injury Landscape – Benchmark Case and Trends

Key Drivers of Bodily Injury Claims

Components of Bodily Injury Claims – Overview

Exemplary Reserve Calculation

Conclusions: "… what is important?"
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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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 large 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 2010
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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Bodily Injury Scenarios in Europe –
Sample of Typical Cases
Accident
Loss
Amount*)
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, quadriplegia
Multiple injured, one severe
(paraplegia)
Up to € 8m
Poland
Injured (paraplegic)
€ 0,5 – 0,8m
Czech Republic
Injured (paraplegia)
€ 0,8 – 1,2m
Romania
Various losses of injured (severe
bodily injuries) and fatality
€ 125.000 –
750.000
Romania
Pain & Suffering of injured and
of relative
€ 850.000
€ 1,2m
€ 4 – 5m
*) amount in brackets (€ 8m) reflects final settlement by insurer
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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Swiss Re Bodily Injury Claims Landscape
- Benchmark Case Hypothetical victim – Tetraplegic

30-year-old man

Wife without own income

2 children (aged 2 and 5)

Average income from dependent
employment

Severe spinal or head injury; no
ventilation necessary; remains 100%
disabled; cannot return to work

Highest assistance level

Cost components: loss of earnings,
assistance, pain & suffering, remainder
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
Slide 5
Swiss Re Bodily Injury Claims Landscape
European Comparison 2010
United Kingdom
France
Germany
Austria
Switzerland
Belgium
Finland
Czech Republic
Italy
Spain
Hungary
Slovakia
Poland
0
1
loss of earnings
2
3
assistance
4
5
6
pain and suffering
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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8
9
remainder
Slide 6
10
in mn €
Swiss Re Bodily Injury Claims Landscape
European Trends 2012
Czech Republic (EUR)
Poland (EUR)
3,000,000
900,000
2,500,000
800,000
700,000
2,000,000
600,000
500,000
1,500,000
400,000
1,000,000
300,000
200,000
500,000
100,000
0
0
1990 1995 2000 2005 2008 2010 2012 2015
LOE
ASS
PS
REM
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
1990 1995 2000 2005 2008 2010 2012 2015
LOE
ASS
PS
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REM
Key Drivers in Increase of Severe BI Claims
Legal Systems
 Non-material losses; Pain & Suffering vs.
Different Settlement Methods
Harm of Social Status
 Recourse of social security system
Legal Changes
 Enforcement of victim protection
(EU)
 Annuities vs. Lump Sum (capitalization)
 Settlement periods
 Increasing compensation of nonmaterial losses
 Role of courts – victim friendly /
but also restrictive re claims
Increasing welfare
 Higher living standards
 Increasing wages
 Changes in society /
Capitalization tables

social relationship
Increasing mobility
Exploding Medical and Care
Costs / Healthcare costs
 Superimposed inflation in
welfare states
 Discount rates
 Changes in financial
Life Expectancy
 People live longer
markets
medical and care sector
 Trend to third party assistance in
Increasing claims awareness
 From whom can I get compensation?
 Stronger public awareness
 Contingency fees/victim associations/TV
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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Components of Bodily Injury Claims Overview

Medical costs (medical treatment in hospital and ambulant, rehabilitation, medical
follow-up treatment)

Loss of Earnings during medical treatment and later

Care costs and assistance (monthly period, calculated on hourly or daily rates)

Pain & suffering of the injured (respectively additional disfigurement)

Non-material compensation for relatives

Additional needs (prosthesis, wheelchair, conversion of flat, additional medical
expenses, housekeeping loss)

Funeral costs

Alimony to family members (spouse, children)

Lawyers- and court costs
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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Reserve Calculation - Bodily Injury Claim
Motor Accident (Austria) - 2010
Injured
Gender
Date / Year of Birth
Age at DoL
Mortality Table /
Life Expectancy
Profession
/ Current Job:
Injuries/ Disability
Kind of Care
Claims Positions
male
1988
22 years
50,4
cook
paraplegia / 100%
disability / wheelchair
family + resid. home
Key Topics

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?
Medical Costs:
Pain & Suffering:
Disfigurement
P & S of Relatives
Care Costs:
Family + Residential
Home
Months / Year
Life Expectancy
./ . reduced LE*)
Loss of Earnings:
Months / Year
Retirement Age (65)
Legal Costs:
Others:
Sub-Total:
./ . reduced LE (20%)**)
Public Social Security
and Pension Funds
Add. Injured
Sub-Total:
Claim Notification:
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
Calculation of Cedent
EUR
180.000
150.000
20.000
0
5.000
12
54,46
0
2.000
12
43
3.267.600
0
1.032.000
potential
future
increase of
costs?
what is this
amount in
54 years?
potential wage
increase? carrier
opportunities?
discount
rate?
150.000
4.799.600
-821.600
800.000
230.000
5.008.000
5.000.000
10
justification
for reduction
of LE and
proportion?
why here
and not at
care costs?
"… what is important for Severe Bodily
Injury Claims?"

… 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 mind
– be prepared for special requirements and individual claims settlement as a
part of a consistent claims strategy

Swiss 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.
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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Thank you
Ulrich Werwigk, Attorney at Law
Swiss Re Europe S.A., German Branch
Email: Ulrich_Werwigk@swissre.com
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or its Group companies be liable for any financial and/or consequential loss
relating to this presentation.
FIAR - Insurance-Reinsurance Forum 2012 | Ulrich Werwigk | 22. May 2012
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