The Institute and Faculty of Actuaries (IFoA)has developed a new categorisation for serious spinal and brain injuries aimed at helping insurers better estimate future liabilities.
The IFoA has been analysing motor insurance data for periodic payment claims. It found claims of £1m or more were likely to be paid as PPOs and medical progress meant these claims could remain on balance sheets for decades, The Actuary reported.
Report author Sarah MacDonnell said previously there was no standard way of capturing the impact of a severe injury on mortality.
"With advances in medicine it is not a stretch to see a baby involved in an accident living to 100 and requiring support for the entirety of their lives. By categorising the severity of injuries, we will capture data that can help to provide more accurate mortality estimates and, in so doing, help (re)insurers to better estimate their future liabilities and the reserves required to meet them," MacDonnell said.
"While this might not be a problem today, it is one that stretches ahead of us and will have an impact in 20, 30 or even 40 years time."
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