Has anyone actually done an analytical report yet? If not I need stats, STAT!

[motorbyclist]

SO, who's actually looked at ACC's financial documents? since at least 2007 the Motor Account budgeted to make a profit. 2007/08 saw a loss of $430 million and 2008/09 lost $1.5 billion, predominantly due to increase in costs.

In fact, all their accounts are performing under budget.


The overall change in ACC net position over 2008/09 was $4.6 billion (56.6%) worse than the budgeted loss.

yet somehow they've forecast a profit for this 1009/10 period exceeding their budget. wtf.

[motorbyclist]

Oh, and who actually read the proposal document? they did account for car divers causing half of our accidents

[Squiggles]

Oh, and who actually read the proposal document? they did account for car divers causing half of our accidents

Briefly, again without backing, and they then didn't follow through the calculations until the end. Read the whole thing...
They've also said how they matched some of it up since then, they tried to match their claims with the cas database and "matched" about half of them... what they did with the matched data they're so far keeping secret

How about you just turn up to the chiller early tomorrow?

[Ixion]

SO, who's actually looked at ACC's financial documents? since at least 2007 the Motor Account budgeted to make a profit. 2007/08 saw a loss of $430 million and 2008/09 lost $1.5 billion, predominantly due to increase in costs.

In fact, all their accounts are performing under budget.


The overall change in ACC net position over 2008/09 was $4.6 billion (56.6%) worse than the budgeted loss.

yet somehow they've forecast a profit for this 1009/10 period exceeding their budget. wtf.

So. Most businesses that rely for a significant part of their income on investment values have reported huge losses. Its caused by this recession thing.

Remember, ACC don't work like you or I. We put money in the bank and regard the interest as income.

They put money in the sharemarkets (huge amount of money) and then, if the shares go up, they count the increase as income (even though they haven't sold the shares). Then of course next year the shares go down and they have to report a loss.

But in fact they never made either a profit or loss

Say I put 10 billion dollars in the share market. It's a bull market (as it was untilt he crash). At the end of the year my 10 Bn is VALUED at 15 Bn dollars.

So I report a 5 Bn dollar profit collect a big bonus. I don't sell the shares of course just sit tight and wait for them to go up another 5 next year.

But next year , things go bad. Sub prime and all that shit. The price of the shares I've invested in goes down . Heavily. To 12 Bn dollars. So I have to report a 3 Bn dollar loss.

But - I still have exactly those same shares. And even now they are worth 2 Bn more than I paid for them. Am I really in the shit?

Look at the cash flow. That's the real measure of the viability of a business. Money in, money out.

EDIT : And note taht this scenario is only possible since they went to full funding. before that they didn't have billions of dollars lying around to speculate with. I suspect taht many of the senior managers at ACC don't actually understand investment banking .

It is also fair to note that ACC managed their investment portfolio a lot better than most large investment companies.

[motorbyclist]

Briefly, again without backing, and they then didn't follow through the calculations until the end. Read the whole thing...
They've also said how they matched some of it up since then, they tried to match their claims with the cas database and "matched" about half of them... what they did with the matched data they're so far keeping secret

How about you just turn up to the chiller early tomorrow?

I did read the whole thing, and i'm still looking for the data behind their relativity claims.

So. Most businesses that rely for a significant part of their income on investment values have reported huge losses. Its caused by this recession thing.

According to Motor account, most of the money lost was due to a several times increase in costs for ongoing claims - the recession hit to their investments was only minor and they didn't do too badly.

take 2008/09 for example - "increase in outstanding claims liability" was $1.7bn

that's how much the future costs of claims moved, due to a number of reasons outlined throughout all their reports.

investment wise they're doing pretty well.

Either way that's irrelevant as any levy I work out will have to total the budgeted amount anyway.

[Ixion]

According to Motor account, most of the money lost was due to a several times increase in costs for ongoing claims - the recession hit to their investments was only minor and they didn't do too badly.

..

Yes, bu tremeber they now use a fully funded model. SO the "cost" of claims isn't the money they paid out. It's the cost of the money they transfer to reserves to cover future costs.

And that cost went up because of the recession

If Biker Bill crashes this year , ACC may reckon (ie guess) that , he's going to be still on ERC in 10 years time , and probably need two or three operatsions (poor bugger, eh) . The estimate (ie guess) that the cost of this in 2009 dollars is $500000 ie 10 * the ERC he gets now, plus the cost of those operations if he had them now.

But, they say, we are not paying this money out now. We will be paying most of it out several years hence. And by then inflation will mean things will be dearer . We will have to pay Biker Bill more ERC each year. And those operations will cost more in 2015 than they would today.

So, they try to guess what the inflation rate will be in the future. Prior to the crash they were assuming a lowish rate . Now thay are assuming a much higher rate (John judge is quite open about this in the preamble).

If they assume say 10% that means that the actual cost will be something like 750000 (not right but about that I can't be arsed with working it out exactly).

So they have to squirrel away 750000 not 500000.

Before the crash they might have assumed 2% . That would only have "cost" them 550000. So Biker Bills claim has gone up by 200000. Almost overnight!

Then they say "well we don't actually need QUITE that much up front, because what we do squirrel away will be earning some interest while Biker Bill is waiting to claim it. So that will help"..


Now, before the crash they were getting something like 10 or 12 % interest. Now they'll be assuming maybe 2%. So that puts the costs up again.

But of course the actual cost is exactly what it was before. They've just juggled the numbers.

And this year they are juggling them to make ACC look as bad and as broke s possible. So that whoever buys it gets it real cheap. Its the NZ Railways sell off all over again. Some crony of the National party will make billions out of this.

Look at the cash flow. That's the only reliable measure.

[Jantar]

righto, I've gotten started on the 2009 annual report and the entire opening basically says they're totally fucked. lovely.

http://www.acc.co.nz/search-results/...+annual+report

read it.

Not true

ACC’s motor vehicle account data shows that in the 2007 – 2008 year a total of $341m was paid out, and had a nett levy revenue of $634m.

This doesn't look like "fucked" to me. What is does mean is that they are moving towards fully funded, just not as fast as they would like. Surely if they are already taking in almost 200% of what they are paying out then they are doing bloody well?

[NighthawkNZ:Me]

Flat fee on W.O.F's (say $5 or $10) on all warrantable vehicles and trailers. i.e; 4,125,932 vehicles 4,125,932 x $5 = $20,629,660 or $41,259,320 if it was $10.

An ACC Levy on all traffic infringements. (except car parking) I have no idea how much that would generate. But since they are breaking the law on the road then a higher ACC levy should be added as it possible they could cause an accident. Including drunk driving speeding and not wearing seat belt. (It is no different asking the crims to pay a $50 levy which you are not going to get, but speeding ticket with a levy on it a better chance it is going to be paid. However the principle is the same.)

We could put flat fee ACC levy on all vehicles bought including boats, trailers and caravans, including farm machinery. Even if it is only $50. This levy can be put on the changing of ownership papers.

Between that and the fuel levy, you would make more than the $634m mainly from the traffic infringments and you could just about droup the rego levy

[bogan]

I did read the whole thing, and i'm still looking for the data behind their relativity claims.

same here, the claims frequency sounds about right, we got between 3-5x using the MOT data (3x crashes, 5x fatalities, from memory). And they have taken the rider fault into account, though it doesnt look like they have analysed the cost difference between rider fault accidents, and non rider fault ones.

The bit that I cannot understand is the cost per claim, I have no idea where that could have come from, if we substitute the relative costing (80%) someone on here calculated from the MOT data, we get:

0-150cc: 132.24%
150-600cc: 205.55%
600+cc: 153.58%

Now we couldnt calculate the relative costs for each cc rating because there is no data available for it, be interesting to see how acc did that as its not recorded in most cases.

So it is probably more fair to take an average of all three and use that, 164% (probly plus/minus 15% as we dont know cc distribution).

Applying this relative to the current car levy ($136.44 from rego i have lying around) we get $223, funny that, we pay slightly more than that as it is.

Now something I shall do, which the gubbermint/acc have not, is put this calculated value up against last years claims cost. Approximately 100k registered bikes shall generated $22.3 million, to pay the claimed $62million needed, $36million of that attributed to rider fault. So with those calculation we pay 62% of what is needed. But how are they calculating the required funds, it is my understanding that the $62million is needed for 5 years only until the system is fully funded, I wonder how much would be required if they were not moving towards a future funded scheme.

As always, hope Ive made sense and not cocked up the maths

[bogan]

and another thing, ACC has the raw claims data, how hard is it to total add the claim cost (projected itd have to be i spose), and count the number of accidents for each cc group. Sounds easier and more reliable than doing multi step calculations... You want an average, use Sum/Count, pretty sure that was taught in primary school.

[Ixion]

Now we couldnt calculate the relative costs for each cc rating because there is no data available for it, be interesting to see how acc did that as its not recorded in most cases.

So it is probably more fair to take an average of all three and use that, 164% (probly plus/minus 15% as we dont know cc distribution).

They just used the ones they had. About one quarte rof the total. And assumed the rest followed the same pattern.

Ignoring the fact that the crashes that end up in the police computer are always going to be the bad nasty ones.


They use 150%. But base it on the worst (most expensive) quarter of crashes (as above)

[motorbyclist]

And this year they are juggling them to make ACC look as bad and as broke s possible. So that whoever buys it gets it real cheap. Its the NZ Railways sell off all over again. Some crony of the National party will make billions out of this.

yes entirely possible... the proposal (and media) seem to give entire focus to motorcycles and nothing to the car increase - although to be fair a car driver isn't going to get anywhere near the same sting in the wallet as their levy is mostly petrol.

although I did unearth a rather handy source..... link

it appears to be the document that the proposal document is based on.

How much have costs been rising?
The table below provides some examples of cost increases over the last five years.

Physiotherapy $71 m 97%
Elective surgery $112 m 87%
X-rays/MRI/CT scans $53 m 120%
Counselling $4 m 25%
Public hospital costs $91 m 31%
Personal support $126 m 79%
Income replacement $311 m 47%
Hearing loss assessment and aids and appliances $17 m 37%
Suicides & self-inflicted $12 m 590%

[motorbyclist]

Not true

ACC’s motor vehicle account data shows that in the 2007 – 2008 year a total of $341m was paid out, and had a nett levy revenue of $634m.

This doesn't look like "fucked" to me. What is does mean is that they are moving towards fully funded, just not as fast as they would like. Surely if they are already taking in almost 200% of what they are paying out then they are doing bloody well?

the problem is, as Ixion said it, that those $341m in claims have another $500m in long term costs that ACC has to squirrel away.

And as ACC says, the inflation of medical costs is causing them to re-evalutate that $500m to $750m.

and then on top we have to squirrel away enough funds to cover all long term claims from a decade ago, within 5 years time - and those long term costs just went from $500m to $750m also.

suddenly the motor account loses $1500m in just one year (2008/09)

and according to ACC, while economic factors were at play, things like increased nurse and doctor wages had a far greater effect.

[motorbyclist]

The bit that I cannot understand is the cost per claim, I have no idea where that could have come from, if we substitute the relative costing (80%) someone on here calculated from the MOT data, we get:

0-150cc: 132.24%
150-600cc: 205.55%
600+cc: 153.58%

I calculated it three ways, but the pure MoT way wasn't too good, and the other two are the ACC way:

go here and extract a few numbers.

if we take the new claims and/or costs things look worse, so use the total cost of claims and total number of claims for passengers and motorcyclists. Now take the numbers of registered bikes and cars from the proposal pg34.

if we divide total cost by bikes and compare to total cost by cars, then multiply by 58% "at fault factor", we get a relativity of 522% to share amongst our capacities.
($62523000/85902bikes)/($208305000/2575165cars)*0.58 = 522%

yes, i do realise the ACC count of bikes is lower than MoT, because MoT includes bikes under exemption or some other such excuse.

if we divide total claims by bikes, total costs by claims, multiply them together to get cost per bike, do the same with cars, see how many times bikes cost more than cars, and then multiply by 58% as per the proposal, we get 522%. this to me shows they aren't too bright at maths doing it such a redundant way - or it hints they use different numbers somehow...

now if we use the MoT fleet data excel spreadsheet, we can extract:
0-125cc = 32% of fleet
125-600 = 25% of fleet
600-up = 44% of fleet

if we multiply these by ACC's corresponding relativities and sum the products, we get...
(32*241)+(25*481)+(708*44) = 509%

Is it possible that ACC has applied relativity on a perceived accident rate that is purely a reflection of the motorcycle capacity demographic? As I said earlier, considering that the MoT has not recorded capacity in as much as 15% of accidents while 125 to 600cc bikes make up only 25% of the fleet one would expect some considerable uncertainty in any statistic. Unfortunately the data in the motorcycle fact sheet uses different capacities to ACC, but the graph they did show (percentage of accidents by capacity) did not account for the uneven spread of capacity in the fleet. If ACC has fallen for this error and/or cannot produce statistically significant evidence for the chosen capacities, the proposal to split motorcycles by capacity should be dropped immediately.
I also think it would be wise for ACC to front up with the full working for that problem, with all the relevant data shown, rather than blast out more of what many see as propaganda. Especially troubling is ACC’s claim (excuse the pun) that motorcyclists are 16 times as likely to make an ACC claim than other road users – would that not put the claim per motorcycle relativity somewhere near 1600%?

[The Stranger:Me]

But, they say, we are not paying this money out now. We will be paying most of it out several years hence. And by then inflation will mean things will be dearer . We will have to pay Biker Bill more ERC each year. And those operations will cost more in 2015 than they would today.

So, they try to guess what the inflation rate will be in the future. Prior to the crash they were assuming a lowish rate . Now thay are assuming a much higher rate (John judge is quite open about this in the preamble).

If they assume say 10% that means that the actual cost will be something like 750000 (not right but about that I can't be arsed with working it out exactly).

So they have to squirrel away 750000 not 500000.

Before the crash they might have assumed 2% . That would only have "cost" them 550000. So Biker Bills claim has gone up by 200000. Almost overnight!

Is ERC inflation adjusted?
I can see where that would be necessary for some but I can also see where adjusting for inflation could well be a disincentive for others to return to work.
I knew a guy who had been off work for over 5yrs with a bad back. He was as fit as I, did all the stuff we did, except go to work.