Taylor Fry Injury and Disability Schemes Seminar Prize 2025
Congratulations to the winners of the Taylor Fry IDSS Prize 2025, authors Aaron Cutter, Angela Poon, Roel Verbelen, Mayank Jain and Vinit Desai for their paper, "Modelling Mortality Rates for Catastrophically Injured Individuals in Australian and New Zealand Injury and Disability Schemes".
The judging panel declared that the paper is a solid piece of research into an important topic that has not previously been explored. The results are highly relevant to all catastrophic injury schemes because participant mortality is one of key factors impacting their resourcing and costs. In their view, this paper makes an important contribution to the body of actuarial knowledge and meets the Taylor Fry prize criteria for “effecting a significant advance in the profession’s understanding or knowledge of a specific subject or sphere of knowledge”.
Modelling mortality rates for catastrophically injured individuals in Australian and New Zealand injury and disability schemes
Authors Aaron Cutter, Angela Poon, Roel Verbelen, Mayank Jain, Vinit Desai
Abstract
Background: It is well established that mortality rates for catastrophically injured participants in injury and disability schemes are higher than those of the general population. However, the extent of this excess mortality within Australian and New Zealand schemes has not previously been quantified. Finity coordinated a collaboration between nine injury and disability schemes across Australia and New Zealand to conduct the first comprehensive trans-Tasman study of mortality for catastrophically injured participants. By pooling data across schemes, this collaboration enabled a larger population to be studied, facilitating deeper and more reliable analysis of mortality experience.
Methods: To develop life tables for impaired lives associated with Traumatic Brain Injury (TBI) and Spinal Cord Injury (SCI) cohorts, we modelled observed mortality rates using a Poisson Generalised Additive Model (GAM). Population mortality rates by age, gender, year and jurisdiction were incorporated as offsets, allowing the model to estimate mortality relative to the general population on the log scale across covariates. The resulting fitted values can be interpreted as covariate-specific Standardised Mortality Ratios (SMRs).
Results: The study quantified mortality outcomes for catastrophically injured individuals by producing SMRs relative to the general population for TBI and SCI cohorts across Australia and New Zealand. The modelling framework revealed substantial variation in excess mortality by age at injury, gender, injury severity, and duration since injury. Consistent with international research, we also found that mortality improvements observed in the general population have not been mirrored in these cohorts. The outputs are SMR tables that can be directly applied in actuarial valuations and premium or levy assessments, providing a robust and context-specific basis for modelling mortality of catastrophically injured participants in Australia and New Zealand.
Current issues in pricing across aged care and disability in Australia
Author Bridget Browne
Abstract
The Australian disability, aged care, and health sectors are undergoing significant transformations due to demographic shifts, policy changes, and increasing demand for services. Commonwealth Government spending on these areas is significant and growing – in FY25 expenditure on the National Disability Insurance Scheme, aged care and the Medical Benefits Scheme was expected to be $48.5 billion, $37.2 billion and $32.7 billion respectively, forming 3 of the top 5 programs by expense (Commonwealth of Australia, 2025, p. 119). Effective pricing and scheme design are crucial to ensuring the sustainability and accessibility of these services. This paper considers recent reviews, recommendations and reforms regarding pricing across aged care and disability in Australia, including the transition of aged care pricing responsibilities to the Independent Health and Aged Care Pricing Authority (IHACPA), the new arrangements for in-home aged care and the report of the Independent Pricing Committee established by the National Disability Insurance Agency (NDIA). It explores these pricing frameworks and associated policy choices and highlights similarities, differences, overlaps and potential impacts and opportunities.
Is Workers' Compensation Fit for the Future?
Author Steve Somogyi
Abstract
The combined statistics published by Safe Work Australia for the nine years from 2013-14 to 2022-23 shows increasing claims frequency per million hours worked, increasing median time lost per injury resulting in a significant increase in median claim cost per injury. This reflects a change in the mix of occupations as the Australian economy matures from goods focussed industries to service industries, a change in the working population with an older workforce including a higher proportion of females and more part time work, and a significant change in compensation claim types especially the fast rise of psychosocial claims. These trends are forecast to continue with Oxford Economics 4 , in a paper prepared for Jobs & Skills Australia, projecting continuing movement away from goods industry occupations to service industry occupations to 2050 and beyond, thereby increasing the exposure to psychosocial claim types and reducing exposure to physical injury claim types. The Intergenerational Report (IGR) 1 published by Treasury in 2023 projects a continuing ageing of the population and by implication of the working population.
My projections, using these population trends but with static claims incidence and cost of claims continuing to outpace wages by 1.5% per annum, show that the cost of workers compensation claims is likely to outpace growth of Australia’s Gross Domestic Product by around 3% per annum. Even more if we fail to stem the fast growth of psychosocial harm. We need to consider some new strategies to ameliorate this outcome to enable workers compensation schemes to best serve Australian workers and enterprises, perhaps anticipating the problem by adopting more effective prevention strategies and more intensive efforts in returning workers to the workplace.
The Long(itudinal) Road to Recovery – Using Survey Data to Understand Broader Outcomes and Vulnerabilities of Injured Workers
Authors Hugh Miller and Laura Dixie
Abstract
While the importance of broader biopsychosocial factors in understanding injury schemes has long been recognised, there remains significant challenges in understanding the broader life context of people in injury schemes, as well as how they interact with other health and income supports. We review the literature on broader and post-injury outcomes related to accident compensation schemes. We then use Australia's leading longitudinal research study, the Household, Income and Labour Dynamics in Australia (HILDA) survey to build the understanding of pathways and outcomes for people receiving accident compensation support. HILDA provide annual updates on the life circumstances of a cohort representative of the Australia population for over 20 years.
This enables us to examine:
- Health, income and other socioeconomic characteristics before and after accident compensation receipt
- Income pathways (including changes of employment and welfare receipt) for people post-injury
- Health pathways (including both mental and physical health ratings as well as quality of life ratings) for people post-injury.
The use of both broader wellbeing and quality of life measures combined with examination of both immediate outcomes and longer-term pathways makes this study unique. We find:
- The cohort examined largely have short-duration compensation claims with payments only received in one year. However, significant negative outcomes are visible for those with claims lasting longer (3 or more years), particularly on wages, employment status and health.
- Many short-term claims see wages recover quickly and employment remains reasonably high for the first 3 years post injury. Household income remains steady, even for those with longer-duration claims.
- General health outcomes tend to be mirrored by changes in mental health (although the self-rated nature may contribute to this). Injuries leading to compensation tend to be significant life events – impacts are similar to other major life events.
- Care responsibilities increase for partners of claimants, and there is no evidence of partners picking up additional employment.
CTP: Beyond the Rearview Mirror
Authors Estelle Pearson and Timina Liu
This paper examines the last decade of frequency, premium and profitability trends for CTP schemes in Australia. We consider the drivers of trends including:
- Impact of road safety and mobility patterns
- Scheme reforms and legislative change
- Shifts in community behaviours and expectations, such as increased recognition of psychological injuries The role of regulators and societal expectations regarding profit.
We then consider the implications for the future sustainability of CTP schemes given some of the changes ahead, such as micromobility trends, new vehicle technologies and applications of AI.
IDSS 2025: IFRS 17 Illiquidity Premiums for Public Sector Schemes
Authors Augustine Sidik, Francis Beens, Khar Mun Tang, Kieran Leong, and Roshane Samarasekera
This paper examines how public sector schemes can estimate the “illiquidity premium”, which is required for discounting under IFRS 17. These schemes typically involve long-duration liabilities, often linked to statutory benefits, and these liabilities will generally be “illiquid” to a degree. Under IFRS 17, the discount rate adopted must reflect the characteristics of the liability cash flows, including their illiquidity.
Our paper starts by exploring theoretical and practical reasons for including an illiquidity premium, and how it may support matching of assets and liabilities when credit markets are under stress. We then consider the nature of the liabilities taken on by public sector schemes, and the concept of an illiquidity premium from IFRS 17.
We then evaluate a range of methods proposed or used in practice to estimate the illiquidity premium and assess their appropriateness for public sector schemes. We focus primarily on the methods that were canvased in the Actuaries Institute ‘Illiquidity Premium Paper’ from 2011. We set out how to apply the approaches in an Australian and New Zealand context, and estimate what the illiquidity premium would be for an example portfolio that is similar to an Australian public sector workers’ compensation or catastrophic injury scheme, or an equivalent to an accident compensation scheme in New Zealand. We also compare and contrast the results from these methods with Australian, New Zealand, and international benchmarks.
This paper does not try to develop a new method for estimating illiquidity. Rather, using what we already have available, we consider whether existing methods are appropriate to use for public sector schemes.
We conclude that including an illiquidity premium is appropriate for public sector schemes with long-duration liabilities. The illiquidity premium helps to align liability and asset values during periods of asset market stress, contributing to a somewhat more stable net balance sheet.
Reflections Over 40 Years
Author Geoff Atkins
This paper records some of my reflections over 40 years of work in accident compensation. It has been prepared for the 20th Actuaries-sponsored seminar for accident compensation and, more recently, disability schemes. They are personal views, not those of any of my employers or clients.
Long term social and economic consequences of workplace injury: Insights from HILDA data
Author Michael McLean
Objectives: This study investigates the longer-term social and economic consequences of workplace injury in Australia, establishing causal links between workplace injury exposure and outcomes spanning labour force participation, income, wealth, health, and wellbeing. The research aims to inform workers' compensation scheme design by quantifying impacts that extend beyond direct treatment and wage replacement costs, and to identify demographic and occupational risk factors associated with workplace injury incidence.
Methods: This study uses longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. Random effects logistic regression models identify predictors of workplace injury incidence. Difference-in-differences estimation with multiple time periods is used to establish causal effect of workplace injury. Results are estimates separately for men and women. The analysis examines 15 outcome measures across three domains: labour force outcomes, income and wealth measures, and health and wellbeing indicators.
Results: Workplace injuries lead to substantial and persistent negative impacts lasting up to 10 years post-injury. Labour market effects include a 3-percentage point increase in unemployment or marginal labour force attachment (6 percentage points for severe injuries), and approximately $500$750 annual increases in income support payments. Gross wage losses can reach $10,000 annually for any workplace injury and exceed $20,000 for severe injuries a decade post-injury. General health scores decline by 2-6 points depending on injury severity, with women experiencing more pronounced and deteriorating health effects over time. Overnight hospital visits increase significantly, particularly for women (0.21-0.34 additional visits). Risk of workplace injury is also shown to vary substantially by occupation, industry, education level, and socioeconomic status.
Conclusions: Workplace injuries impose substantial long-term economic and social burdens on injured workers that persist far beyond the active workers' compensation claim period. The evidence of cost-shifting from workers' compensation systems to income support programs and increased health system utilisation underscores the importance of whole-of-system policy perspectives. Gender-specific impacts suggest tailored support approaches are needed. The heterogeneity in workplace injury risk highlights priority cohorts for targeted prevention efforts. These findings demonstrate the need for targeted long-term support systems that recognise the persistent nature of impacts on workers' employment, income, health and wellbeing.
From Decisions to Insights: Using GenAI to Decode Trends in NSW PIC Cases on Whole Personal Impairment
Authors Carmen Burraston and Francis Beens with special thanks to Kelly Chu
Whole Person Impairment (WPI) is a key ‘gateway’ to benefits across multiple injury compensation schemes in Australia. In New South Wales, both the Workers Compensation (Workers) and Compulsory Third Party (CTP) schemes rely on WPI assessments to determine eligibility for entitlements. In the Workers scheme, WPI determines access to long-term statutory benefits and the ability to make a damages claim. In the CTP scheme, WPI determines access to non-economic loss in damages claims.
WPI is assessed in NSW using detailed guidelines and different rules apply depending on whether the injury is physical or psychological. Disputes frequently arise over WPI assessments and these disputes will often be resolved in the Personal Injury Commission (PIC).
This paper investigates how GenAI can be used to extract structured information about WPI assessments from the unstructured text of published decisions handed down by the PIC. We test the nature of the information that can be reliably extracted from decisions. We then analyse the resulting dataset to reveal patterns and trends in decision-making separately for physical and psychological injuries.
We also address the practical challenges of applying GenAI to legal text, including model reliability, transparency and the need for human guidance and oversight. The findings illustrate the potential of using alternative sources of information (beyond what is often accessible from insurer claims datasets) to enhance our understanding of important aspects of WPI, offering actuaries, executives and policymakers a novel tool for monitoring the overall health of schemes.
