introduction - acc.co.nz

Introduction

This report provides a summary of performance for the 2020/2021 financial year. Quarterly reports should be read in conjunction with the Service Agreement, Statement of Intent, and the reports of any preceding quarters for additional context on performance. The quarterly report details:

• provisional year end results against the measures included in the Service Agreement for 2020/21 and Statement of Intent 2018-22

• status of implementing key initiatives as set out in the Service Agreement

• financial performance

• significant trends, risks or issues that impacted performance.

We use the following definitions to assess the status of performance for each individual measure.

Indicator Full year outlook

G Tracking to meet or better target

If a financial measure, target is met

A Achieving target at year-end is not certain.

If a financial measure result is <10% from target

R Low probability of meeting target at year end.

If a financial measure result is ≥10% from target

Table of contents

Performance summary 3

Claims experience (including claims costs) 5

Claims volumes 5

Claims costs 7

Outstanding claims liability 12

Injury prevention 13

Customer outcomes and experience 16

Customer experience 16

Timeliness 21

Rehabilitation: weekly compensation 23

Rehabilitation: non-weekly compensation 28

Reviews 29

Financial sustainability and governance 30

Financial summary 32

Funding KPIs 32

Financial sufficiency 32

Organisational health and capability 38

People 38

Information 40

Technology 41

Integrated change investment portfolio 42

Appendix 1: Financial statements 43

Appendix 2: Organisational risks 53

Appendix 3: Additional measures 55

Second quarterly report 2020/21 3

CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES

FINANCIAL SUSTAINABILITY

ORGANISATIONALCAPABILITY

ICIP APPENDICESEXECUTIVE SUMMARY

Performance summary

Injury prevention YTD Full year 2019/20

Actual Trend Target Outlook Actual

Return on investment for 0 to 20-year injury prevention programmes

$2.00:$1 Deteriorating $2.05:$1 G $1.99:$1

Return on investment for workplace injury prevention programmes

$1.32:$1 Improving $1.30:$1 A $1.23:$1

Rate of serious injury (inc. fatal) for 0 to 20-year injury prevention programmes

8.9 Stable 9.3 G 9.3

Rate of serious injury (inc. fatal) for workplace injury prevention programmes

0.16 Improving 0.22 G 0.16

Customer outcomes & experience

YTD Full year

2019/20


Return to work within ten weeks 63.0% Deteriorating 62.5% G 65.0%

Return to independence for those not in the workforce 87.9% Deteriorating 87.5% G 89.1%

Growth rate of the Long-Term Claim Pool +14.0% Deteriorating +12.5% A +12.6%

Public trust and confidence 67% Stable 64% G 65%

Client net trust score +28.0 Deteriorating +26.0 G +31.0

Client net trust score for Māori +31.0 Stable +23.0 G +43.0

Provider net trust score -12.0 Improving -17.0 G -14.0

Business net trust score -11.0 Deteriorating -20.0 G -1.0


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Financial sustainability & governance YTD Full year

2019/20


Change in average treatment cost per injury +7.8% Deteriorating +8.4% G +6.4%

Average care hours per serious injury claim 1,402 Stable 1,393 A 1,393

Actuarial movement +0.62% Deteriorating Within

+ / - 1.5% G +0.48%

Investment performance after costs relative to benchmark

+0.73% Improving +0.15% G 0.16%

Organisational health and

capability intentions

YTD Full year

2019/20


Employee net promoter score +3 Stable 12 G +21

Total recordable injury frequency rate 2.8 Stable < 3.5 G 3.2

Number of category 3, 4 and 5 privacy breaches and near misses

0 Stable < 5

No category 5 G 0

Overall operational system availability 99.9% Stable 99.5% G 99.9%

Other transformation measures

YTD Full year

2019/20


Claims processed per FTE 519 Improving 549 G 508

Reduction in average WC days paid -7.7 days

[105.1 days] Stable -7.0 days A -4.9 days


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Claims volumes

Measure Most recent

result YTD

actual

Full year

outlook

Full year Budget

2019/20 actual

New claims registered

(rolling 12 months) Dec 2020 1,905,773 R 2,008,413 1,863,092

New WC claims (rolling 12 months)

Dec 2020 84,120 R 80,109 80,755

12-month

growth FY

Budget FY

Forecast

New claims registered -6.8% +7.8% +13.7%

New WC claims -2.6% -0.8% +14.7%

• We have updated new claims registered and new WC claims forecasts based on Treasury forecasts following September 2020 GDP results. In June 2020/21, claims volume will increase by 13.7% compared to the budget of 7.8% .

• 2020/21 WC claims volumes are forecast to increase by 14.7% compared to the budget of -0.8%.

• Claims forecasts conducted throughout 2020 using market economic forecasts consistently underpredicted growth as the economy was able to return to pre-COVID levels without systemic economic disruption.

• This is mainly because most employment markets relevant to the ACC Scheme have remained largely unchanged from prior years. This has led to new Work and Earners’ Account registered and WC claims to be considerably higher than expected.

1 Growth not applicable. It is misleading due to the longer cover decision timeframes

for claims in this Account.

In the six months to December 2020, new registrations have increased by 4.6% compared to the same period in 2019.

• New registered claims decreased by 6.8% for the rolling 12 months to December 2020.

• Since the initial lockdown, new registration volumes have been rising strongly.

• In the month of December 2020, registrations increased by 3.8% compared to December 2019. Growth rates were above 4% for Work, Motor Vehicle and Earners’ Accounts.

Claims Growth

trend 12-month

growth

New claims registered 1,905,773 Decreasing -6.8%

Work 188,629 Decreasing -9.1%

Motor vehicle 31,131 Decreasing -18.0%

Earners' 720,212 Decreasing -6.5%

Non-Earners' 953,602 Decreasing -6.5%

Treatment injury 12,199 1


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




In the six months to December 2020, new weekly compensation commencements have increased by 7.7% compared to the same period in 2019.

• New weekly compensation claims decreased by 2.6% for the rolling 12 months to December 2020.

• In the six months to December 2020 YTD, new weekly compensation claims increased by 7.7% compared to the same period in 2019.This equates to ~3,352 additional claims. Except for Motor Vehicle and Treatment Injury Accounts, all other Accounts have increased during this period.

Claims Growth trend 12-month

growth

New WC claims 84,120 Decreasing -2.6%

Work 24,265 Decreasing -4.8%

Motor vehicle 4,060 Decreasing -13.5%

Earners' 54,595 Increasing -0.5%

Non-Earners' 102 Increasing 2

Treatment injury 1,101 Decreasing -9.4%

2 Growth not applicable. It is misleading due to low volume of claims.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Claims costs – 31 December 2020

$m Growth on prior YTD

YTD actual

YTD budget Variance % variance Status FY budget

Weekly compensation 14.6% 846.8 759.6 (87.3) (11.5)% R 1,564

Other compensation (0.1)% 103.1 100.4 (2.7) (2.7)% A 195

Total compensation 12.8% 949.9 859.9 (90.0) (10.5)% R 1,759

Vocational rehabilitation (22.5)% 43.1 46.6 3.4 7.4% G 92

Social rehabilitation 9.5% 479.5 462.2 (17.3) (3.7)% A 921

Serious injury 4.5% 293.7 290.1 (3.6) (1.2)% A 582

Non-serious injury 18.4% 185.8 172.1 (13.7) (8.0)% A 339

Total rehabilitation 5.9% 522.6 508.8 (13.9) (2.7)% A 1,013

Medical treatment 8.8% 501.2 477.0 (24.2) (5.1)% A 956

Elective surgery 12.0% 231.2 260.3 29.1 11.2% G 489

Public health acute services

6.9% 289.1 289.1 0.0 0.0% G 578

Other treatments 14.9% 114.9 114.7 (0.2) (0.1)% A 224

Total treatment 9.6% 1,136.4 1,141.1 4.7 0.4% G 2,247

All Other misc. expenses 10.9% 24.4 23.4 (1.0) (4.3)% A 48

Total claims paid 9.9% 2,633.3 2,533.2 (100.1) (4.0)% A 5,068


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Total claims paid

Claims costs are above budget following higher than expected compensation costs. Rehabilitation services are above budget due to pressure on care hours.

• Total claims paid are 4.0% ($100.1m) over budget YTD mainly from weekly compensation which is $87.3m over budget.

Weekly Compensation

Weekly Compensation costs YTD are above budget mainly due to stronger than expected new WC commencements and lower rehabilitation performance.

• Weekly Compensation costs YTD are 11.5% or $87.3m above budget. This is due to continued higher than expected new WC commencements and greater claim durations.

Commencements

• The number of new WC claims has been significantly higher than expected. About 55% of the YTD budget variance is attributed to this increase.

• In the six months to December 2020, new WC commencements were 7.7% higher than the period in 2019. ACC has limited influence on the growth in WC commencements other than through injury prevention initiatives which tend be longer-term.

Duration

• The weekly compensation budget made an allowance for deterioration of rehabilitation performance due to the COVID19 restrictions. However, rehabilitation performance is lower than anticipated.

• Lower rehabilitation rates also increase the volume of claims paid. Further comments on rehabilitation performance and actions are included in the short-term and long-term rehabilitation performance section.

Treatment

Medical Treatment costs are $24.2m over budget due to higher than expected claims volumes accessing most services

• Claims forecasts conducted throughout 2020 using market economic forecasts consistently underpredicted growth as the NZ economy was able to return to pre-COVID levels without systemic economic disruption. Our latest draft forecast predicts new claims in 2020/21 will reach an all-time high (2.1 million). This growth will continue to challenge management of claims costs.

Volumes of clients accessing medical treatment in December was significantly higher than expected.

• A higher than budgeted utilisation of medical treatment services has been seen across the board for December. This has resulted in cost pressures in; radiology, High Tech Imaging (HTI), physiotherapy and GPs, which are all over budget.

• The timing of the Christmas public holidays may have contributed to these volumes. If so, we may see a partial offset next month due to the longer shut down period in January.

• Radiologist spend is over budget by $8.7m (10.2%) due to higher than budgeted volumes and diagnostic activity in radiology and


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




high-tech imaging (HTI) nationwide. During December there was a large spike in volumes for both services.

• The increase in elective surgery and new claim registrations could be contributing factors.

• Increase in cost per claim for HTI is being driven by increased volume of higher cost of imaging services such as MRI and CT scans.

• Physiotherapy is 7.4% over budget which is a result of claims volumes being 10.8% over budget and average cost per claim 3.4% lower than budget.

• Overall the growth in claims paid FYTD for physiotherapy is 6.7% which is higher than the 4.6% growth in new registrations for the same six month period year on year. Claims paid with contracted physiotherapy is growing more strongly than regulations.

• Once the suppressed volume impact from lockdown (March to June 2020) is adjusted for, the 2020/21 budget assumed new claim volumes would be lower than the pre-covid levels given budgets reflected expectations of softer economic conditions than occurred. Instead, new claims growth has been strong in the first 6 months of 2020/21. Therefore, much of the variance to budget caused by the higher physiotherapy claim volumes is in line with stronger than the budgeted increase in new claims registered but there remains demand for physiotherapy in excess of our current new claims demand. A 21% increase in in the number of Physiotherapy providers over the last 5 years is one likely cause of excess demand and work is underway to understand further

drivers of claim volume, as well as ACCs ability to influence these areas.

• Work is underway which seeks to quantify the value delivered by the service through analysis of outcome data which may inform future purchasing of Physiotherapy and quantify the value derived from the Physiotherapy contract vs regulations. Several further options are currently being explored to enable ACC to continue to manage cost per claim within physiotherapy.

Social rehabilitation

Average care hours remain higher than usual since the national lockdown

• At the end of December social rehabilitation is overspent by $17.2m (3.7%).

• Combined Home & Community Support Services (HCSS), including contracted Integrated Home and Community Support services (IHCS) is overspent by $13.0m (7.2%). This continues to reflect higher than expected care hours and an increase in the number of clients without serious injuries receiving care.

• Additional support hours were put in place for vulnerable clients and additional childcare hours during COVID restrictions. Recovery staff have been asked to review the levels of care that may have been put in place for clients during lockdown periods to ensure this remains appropriate.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




• The IHCS casemix launched in December 2020 for low complex clients. The casemix model will help ensure consistent allocation care hours for similar clients. Early feedback from suppliers is that this is working well. Financial impacts will be seen in the coming months.

Elective surgery

Elective surgeries continued uninterrupted during Auckland restrictions. Claim volumes in Escalated Care Pathway (ECP) are growing but remain lower than forecast.

• Hospital Treatment (elective surgery) is currently $29.1m (11.2%) under budget. Additional funding was allocated to cover an expected lockdown catchup which has not reached anticipated levels. Claims volumes are however 6% higher than the same period last year.

• Cost per claim was 3.6% higher than expected with more non-core surgery (high cost per claim) and retrospective reimbursements than usual.

• The ECP Surgical pathway is also under budget due to lower than budgeted claim volumes.

Vocational rehabilitation

Vocational rehabilitation benefits continue to be realised.

• Vocational rehabilitation is $3.4m (7.4%) favourable.

• NGCM related vocational rehabilitation benefits are being realised at expected levels. Further growth post COVID restrictions may still be seen due to expected decrease in job availability.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Measure Most recent

result 12-month

rolling

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Change in average treatment cost per claim Dec 2020 +7.9% Deteriorating +8.4% G +6.4%

• Change in average treatment cost per claim has increased over the December 2020 quarter following a downward trend in the September 2020 quarter. The total contribution to growth is sitting at $43.70 per claim compared to the previous financial year. This has increased from $34.78 per claim at end of November 2020.

• This is a rolling 12-month comparison, lower treatment volumes during periods of COVID-19 lockdown have impacted this measure. While the annual growth in cost per claim is comparatively high at 7.9%, there is a decline in claims paid volume growth of 5.4%.

• The average treatment cost per claim is currently $598.25, compared to $585.19 last month. The services that have contributed most to the increase are shown below.

Service type

Key drivers of growth Dec 2020

contribution Full year

target Volume (%)

Cost per claim (%)

Surgical Treatment -0.6% 8.2% $21.63 $27.00

Counselling, psychologists, psychiatrist 8.6% 11.6% $11.81 $4.71

Radiologists -3.8% 6.5% $5.58 $2.57

Specialists -1.8% 4.7% $3.51 $0.85

General Practitioners -6.8% 3.5% $1.33 $2.60

Nurses -2.5% 4.1% $1.01 -$0.07

Med Fees 0.6% 2.6% $1.15 $0.98

All others -6.09% -0.81% -$2.31 $9.39

Total -5.35% 7.88% $43.70 $48.10

Ave treatment cost per claim $598.25

Annual growth rate 7.9%


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Outstanding claims liability

• YTD the OCL has decreased by $1.1b to $60.4b. Economic movements resulted in a YTD OCL decrease of $2.5b.

Discount rate movements

• YTD the single effective discount rate has increased 54 basis points from 1.86% in June 2020 to 2.40% at the end of December 2020. Resulting in a YTD OCL decrease of $6.6b.

• The discount rate increased by 26 basis points in December from November 2020.

Inflation rate movements

• The projected inflation rate over the medium term (up to 2037) increased by 14 basis points in the month of December 2020 to 1.93%. This was 1.58% at June 2020. YTD OCL increase due to

3 The December 2020 half year valuation is based on claims experience up to 30 September 2020.

inflation rates is $4.0b. Actual inflation has also been higher than expected resulting in a further increase in the OCL by $72m. The total YTD OCL increase due to inflation rate changes is $4.1b.

OCL December 2020 valuation • The OCL increased by $371 million in December 2020 half year

valuation3. Weekly compensation and social rehabilitation for serious injury are the main contributors. The strain was mainly due to:

o higher than expected new weekly compensations claims volumes coupled with a deterioration of rehabilitation performance, with existing claims receiving weekly compensation for a longer period,

o higher than expected attendant care hours for serious injury clients.

Social Rehab Care OCL strain of $229m (OCL value of $26.0b, as at 30 June 2020)

• Attendant care payments for serious injury clients were higher than expected for the September 2020 quarter contributing $198m to the strain. This was driven by higher than expected hours of overnight care for clients with treatment injuries who are aged 10 and under. Offsetting that was lower than expected residential care payments, driven by fewer traumatic brain injuries.

Weekly compensation OCL strain of $107m (OCL value of $13.5b, as at 30 June 2020)

• Claim payments were higher for both June and September quarters, largely due to a much higher than expected claim volumes, particularly from new registrations. Lower rehabilitation rates post-lockdown with existing claims receiving weekly compensation for a longer period also resulted in higher claim volumes.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Increase the success of our injury prevention activities

Improving Access and Equity

• The introduction of Rongoa services has been well received and service uptake has been strong. We need to strengthen the service framework to ensure that Rongoa service providers are able to safely provide services to clients and that ACC can monitor the efficacy of Rongoa services.

Injury Prevention 2.0

• ACC has been working with the Joint Venture for Family Violence and Sexual Violence (the Joint Venture). The purpose of the work is to develop a shared understanding of data and insights work across the Joint Venture and establish a pathway forward. ACC’s involvement provides an opportunity to share data and intelligence with Joint Venture partners.

• We launched Nymbl, a free balance training app 12-month trial to help older people remain active and live independently. The partnership with Nymbl means that people can continue to exercise effectively and safely in their own environment using a smartphone or tablet. Nymbl uses ‘dual tasking’ which combines simple body movements with fun ‘brain games’ to get the body and the mind to work together to help prevent a fall, and it takes just 10 minutes a day. It has already had successful results overseas in reducing falls and fractures.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Injury prevention

Measure Most recent

result YTD actual Trend

Full year target

Full year status

2019/20 actual

Return on investment for 0 to 20-year injury prevention programmes Dec 2020 $2.00:$1 Deteriorating $2.05:$1 G $1.99:$1

Return on investment for workplace injury prevention programmes Dec 2020 $1.32:$1 Improving $1.30:$1 A $1.23:$1

Number of claims avoided through our injury prevention initiatives Dec 2020 3,945 Deteriorating 13,310 G 15,541

Rate of serious injury (inc. fatal) for 0 to 20-year injury prevention programmes

Dec 2020 8.88 Stable 9.30 G 9.30

Rate of serious injury (inc. fatal) for workplace injury prevention programmes

Dec 2020 0.16 Improving 0.22 G 0.16

Return on investment deteriorated this quarter.

• Although ROI for 0-20 has deteriorated since September 2020 quarter, we are confident of meeting the year-end target with new business cases planned in the third and fourth quarters of 2020/21 that are expected to positively contribute to the measure. These are:

o A new clinical guideline on cover decisions related perineal tears has been released which will result in $22m of claims savings. A re-investment in our Young Driver programme will be seeking approval by the fourth quarter of 2020/21

o Our Speed programme is likely to be implemented, despite a lengthy delay. The estimated claims savings were removed during 2015/ due to delay but will now be included. This gives confidence in achieving the end of year target.

• The ROI for Workplace is at risk of not being met by the end of June 2021 despite being favourable at the end of December 2020.There is uncertainty over the investment In WorkSafe providing the targeted return.

• There are several WorkSafe scenarios impacting negatively on the year-end result. We are working on an action plan with WorkSafe which is due in February 2021.

• We are also working to bring forward a new investment in Leadership in in health, safety and wellbeing in the workplace to improve the overall workplace return.

Number of claims avoided deteriorated in December 2020 quarter

• While the claims saved in some areas have improved, Sport which has frequently over preformed is lagging behind where it should be at the end of December 2020. We think this is most likely due to the delay in the winter sport season starting in July and finishing later. We have observed a delayed COVID impact in Child and Workplace injury prevention programmes that have now returned to normal level of claims being avoided.

• We expect March 2021 quarter results will be back on track for sport and therefore expect to meet our year-end target.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Rate of serious injury for 0 to 20-year injury prevention programmes and workplace injury programmes remained stable during December 2020 quarter.

• Both serious injury measures for 0 to 20-year injury prevention programmes and workplace injury prevention programmes are currently on track to meet year-end targets.

• Programmes in child, young driver, motorcycles, sport (including drownings), forestry, farming and construction are contributing favourably to the 0 to 20-year injury prevention programmes measure.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Improve our customer’s outcomes and

experiences

Whāia te Tika

• In December 2020, we launched the first of two new public awareness topics focusing on ACC’s role in supporting whānau following an injury at home, in the community, or at work. While continuing to increase knowledge about our role and services generally, we are seeking to bust the myth that ACC support relates only to work-related injuries and to prompt people to think about steps they can take to avoid preventable injuries at home. 

• In December 2020, we were involved in the annual ACC SportSmart IronMāori event, the second year of a three-year sponsorship with IronMāori, one of Aotearoa’s most well-known Māori sports events. IronMāori has been credited with providing greater hauora outcomes for Māori, and non-Māori. ACC’s presence was about delivering on the kaupapa of ACC SportSmart by teaching participants how to prepare and recover well from the race to minimise the risk of injury. We also had ACC staff who had taken up the wero (challenge) of competing in the event. Our sponsorship of this event builds on a strong kaupapa Māori principle of ‘He Kanohi Kitea’ – growing trust and reputation as a partner with mutual commitments.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Customer experience

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20

actual

Public trust and confidence Dec 2020 67% Stable 64% G 65%

Client net trust score for Māori Dec 2020 +31.0 Stable +23.0 G +43.0

Māori lodgement ratio Dec 2020 0.81 New

measure 0.82 G 0.81

Client net trust score Dec 2020 +28.0 Deteriorating +26.0 G +31.0

ACC is focussed on the best possible outcomes for clients given their situation Dec 2020 76% Deteriorating 77% G 77%

Provider net trust score Dec 2020 -12.0 Improving -17.0 G -14.0

Business net trust score Dec 2020 -11.0 Deteriorating -20.0 G -1.0

Public trust and confidence

• Public trust and confidence dropped significantly in December 2020 quarter to 62%, from 72% in September 2020. However, the 4-quarter average result remains higher than the full year target at 67%.

• Public trust is influenced by 5 key levers, the stories of family and friends, experience of injured clients, media and the experiences of healthcare providers and levy payers.

• The reduction in public trust and confidence reinforces the importance of all 5 levers operating together as it’s the cumulative strength that contributes towards the public’s overall perception of ACC and how effectively people chose to engage with prevention and rehabilitation pathways.

• ACC maintained relatively high public trust and confidence following the initial COVID-19 lockdown, however it has now reverted to pre-COVID levels, along with many other public agencies.

• Reductions in trust and confidence with both injured Clients and Business customers are also likely to have influenced the general public result in December 2020 quarter.

• The ACC Awareness Campaign was out of the market for three months prior to the election.

• ACC’s relative position (compared to other agencies) has also declined, from 15th out of 23 in September 2020 to 18th in December 2020. Other significant declines were for MSD and the Earthquake Commission as well as notable declines for MBIE, Ministry of Education, Ministry of Health, and Work & Income.

• Many agencies, most notably frontline agencies like Ministry of Health, Work & Income, MSD and Ministry of Education recorded increased public trust in Q3 19/20 following the Governments’ response to the outbreak of COVID-19.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Clients

• Client Net Trust Score dropped in December 2020 quarter to +28 from +33 in September 2020. Māori Client NTS remained stable this quarter. Both results remain above the end of year targets.

• With the final tranches of Next Generation Case Management (NGCM) rolling out in September 2020, the anticipated complexities of transitioning large volumes of existing and new Clients into the model resulted in challenges maintaining consistently high customer experience service levels. The impact on customer service due to challenges with transitions, call wait times and responsiveness to tasks have been the most significant issues, all of which are now showing significant improvements since ACC’s operations resumed post the Christmas break.

• ACC remains committed to making incremental improvements to clear feedback from Clients about improving their trust and confidence in the organisation, these include provision of treatment and support, effective communication and showing empathy and understanding.

Provider

• Provider NTS rebounded in December 2020 quarter to -12 after a significant decline in September 2020 quarter of -26. The September 2020 quarter decline was mainly driven by Physios and GPs, both of which improved in December quarter. However, along with Rehab providers, Physio and GPs remain with the lowest NTS scores. The result in December quarter is above the year-end target.

• No notable improvement in the dissatisfaction with the new client service model has been observed for December 2020 quarter. There is still a significant amount of mentions about the new client service model emerging in feedback from Providers. Various communications have gone out to Providers to acknowledge these challenges and increase visibility of actions being taken to improve the interactions with ACC.

• Ongoing initiatives continue to improve the interactions with providers including enabling telehealth in several contracts, the secure transfer of medical notes(SureMed trial), roll out of GP MRIs to all PHOs and changes to the ISSC contract.

Bespoke communications go out to Providers

• ACC recently launched specific monthly updates to nine different provider types. It means dentists, for instance, no longer receive newsletter updates meant for acupuncturists. Physiotherapy New Zealand has been so impressed by the new, targeted updates that they have encouraged all their members to sign up.

New Provider Heartbeat survey

• A new Heartbeat survey went live in November 2020 to gather solicited feedback from providers who have had recent interactions with Next Generation Case Management. The survey will run on a weekly basis and is based on provider invoices. Early results indicate provider satisfaction is low (31%) with dissatisfaction themes focused around concerns with the new model, slowness of administrative tasks and long phone wait times.  Providers are talking positively about ACC team members being friendly and helpful.

• Targeted communications to providers aimed at raising awareness and understanding of the new case management model has received positive feedback and ACC’s workforce actions to improve responsiveness to administrative tasks and call wait times continue to improve, and this is beginning to be reflected in the client and provider feedback received through Heartbeat. ACC remains committed to making incremental improvements to clear feedback from providers about improving their trust and confidence in the organisation, these include the consistency of claims decision making, improved engagement regarding patients, ease of dealing with ACC and administration of the scheme.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Business customer

• Business NTS dropped this quarter, with all business sizes dropping but most notably medium and large. The result remains above the end of year target.

• Annual invoicing was completed during the quarter (October/November); this included the majority of self-employed customers receiving an invoice for the first time in two years. A comprehensive communication plan accompanied these invoices, including pre-invoicing notifications to update contact & account details.

• Results for the quarter are in line with the strategic direction of the Business Customer Strategy, reinforcing the importance of key priorities such as improving data quality, automating business transactions and improving business customers’ experiences and involvement when they or their employee is injured.

• ACC remains committed to making incremental improvements to clear feedback from Business Customers about improving their trust and confidence in the organisation, these include injury rehabilitation involvement, ease of doing business and more effective engagement and stronger belief in ACC’s purpose and value of the levy.

Māori lodgement ratio

• The Māori Lodgement Ratio is the ratio between the claim lodgement rate per head of population for Māori, benchmarked against the claim lodgement rate for all NZ. The result for the December 2020 quarter is 0.81. This means Māori have a lodgement rate 19% lower than the national average. This result is unchanged from the September 2020 quarter and the 2019/20 average.

• There has been a slight increase in the claim rate for Māori and for all NZ, largely driven by an increase in claims for injuries in the home. Because the increase has occurred for Māori and for all NZ, the overall lodgement ratio has remained stable since the last quarter.

• There are many factors that affect claim lodgement including the exposure to different activities, risks and workplace conditions. This means different groups will not necessarily have identical rates. However, research suggests Māori are less likely to access the scheme for less-severe injuries due to the perception of injuries and factors like cost and time off work. Our data shows that areas of the largest difference in lodgement rates between Māori and all NZ is for soft-tissue injuries which are generally less severe. Non soft-tissue injuries show comparable rates, which is consistent with this hypothesis.

We are championing equity by innovating and elevating new cultural pathways.

• After a steep initial growth in uptake of rongoā Māori, expenditure plateaued in September and October 2020. If this trend persists, it will help inform ACC’s planning for an enduring rongoā purchasing approach. An increasing proportion of rongoā payments relate to recently-lodged claims, rather than the older injuries which dominated the first few months of data. Further work is being undertaken to analyse whether this may be indicative of improvements in Māori access to the scheme (i.e. Māori choosing


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




to lodge claims when they may not have done so before, due to the availability of rongoā as an option).

• As part of their new partnership with ACC, Te Puna Ora o Mataatua (TPOOM) will reconnect and survey their community to understand the status of whānau wellbeing and needs, alongside the size of the access gap to ACC services. TPOOM plan to commence the survey in November 2020, and results will come in monthly over the next 6 months.

• We are also increasing awareness of ACC with Maori. ACC’s public awareness and COVID engagement during 2020 reached and resonated strongly with Māori, most particularly young Māori 18-34. Since benchmarks in December 2019, ACC’s independent research has shown a strong uplift in Māori agreement with ACC brand associations.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Timeliness

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Speed of cover decisions - non-complicated claims Dec 2020 0.76 days Deteriorating <1.0 days G 0.61 days

Speed of cover decisions - complicated claims Dec 2020 60.40 days Deteriorating <75.0 days G 59.66 days

Non-complicated claims volume continues to grow strongly.

• Non-Complicated timeliness is expected to meet full year target despite deteriorating results.

• In the month of December 2020, non-complicated claim volume growth was up 2.6% compared to December 2019. The December 2020 quarter growth for non-complicated claims compared to the same quarter last year was up 3.1%.

• The monthly non-complicated timeliness result for December 2020 was 1.21 days. This is an improvement on November 2020 however is still higher than usual as a result of the new cover assessment workflow process being embedded.

• The cover assessment workflow change was implemented in September 2020. The ‘get next’[4] workflow model focuses on the next oldest piece of work from the top of the queue which could be a decision on a non-complex claim or a step in a complex assessment.

• This means some of our quick decisions are being impacted. However, this approach ensures that we are applying resource efficiently based on client need rather than making decisions quickly for clients where this may have minimal benefit.

[4] A consistent approach to workflow that focuses on the oldest piece of work rather

than the quickest.

Complicated claims timeliness deteriorated in December 2020 quarter.

• The monthly complicated timeliness result for December 2020 was 65.27 days. The 12-month rolling result remained relatively steady at 60.40 days in December 2020 compared to 59.83 days in November 2020 and is expected to meet the full year target of less than 75 days.

• The volume of complicated claims in December 2020 month decreased by 6.1% compared to December 2019 continuing the recent trend following lockdown lodgement volume reductions. In the December 2020 quarter, complicated claims volume decreased by 9.6% compared to December 2019 quarter.

• For the six months to December 2020, Sensitive, Hearing Loss and Gradual Process timeliness results have improved compared to 2019/20 year-end results.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




52-week rolling at 31/12/2020

Volume Volume Growth

Average days

Total decisions 1,936,264 -7.47% 2.13

Non-complicated 1,891,904 -7.46% 0.76

Complicated 44,360 -7.54% 60.40

Treatment injury 14,205 -7.60% 56.65

Sensitive 10,996 5.82% 97.52

Hearing Loss 7,765 -16.12% 62.86

Gradual Process 5,251 -16.17% 30.19

Late lodged 5,865 6.51% 23.16

Work-related mental injury

276 -13.75% 70.48

Actions

• Following the initial implementation of the ‘get next’ workflow model, we have updated the model and an initial triage process has been re-introduced to help reduce the volume of simple, quick decisions being held up and creating a backlog. We expect this change to improve timeliness from January 2021 onwards.

• Actions underway since November 2020 to improve timeliness has delivered the following:

o Held claims5 volumes continue to decrease, by 800 over the past four weeks.

o The age of work on hand has continued to reduce. The oldest untouched Treatment Injury work reduced from 110 days to 73 days in December 2020.

o the reallocated resourcing to focus on complicated claims has slightly worsened the non-complicated timeliness. This is within the expected outcomes from our work plan.

5 The claim has been registered; however, further information is required before a

claim can be approved or declined for cover.

• The actions underway will have an initial negative impact on the high-level timeliness measures specifically for Treatment Injury, Late Lodged and Hearing loss. Cover timeliness is a lag measure so clearing outstanding aged work worsens the result but enables us to get to the right state for improved performance in the future.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Short-term rehabilitation: weekly compensation

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Return to work within ten weeks Dec 2020 63.0% Deteriorating 62.5% G 65.0%

Return to work within nine months Dec 2020 89.7% Deteriorating 90.0% A 91.0%

Durable return to work (Work Account claims) Dec 2020 71% Deteriorating 1% higher than Aus6

TBC 72%

Reduction in weekly compensation days paid (exit methodology)7 Dec 2020 -7.7 days

[105.1 days] Stable -7.0 days A

-4.9 days

[102.2 days]

• The 10-week return to work rate for the 52-week rolling average is 63.0% at the end of December 2020. This has declined from 64.0% at the end of September 2020.

• The YTD 10-week return to work rate remains above the target rate of 62.5%. As the monthly results continue to stabilise, the 52-week rolling average will improve if the weekly performance is the same, or better than, the same period last year. The final quarter of the year will see the impact of the record low COVID-19 lockdown results drop off and is expected to be reflected in an improvement in the rolling 52-week average.

• The recent improvement in weekly results following the COVID-19 lockdown gives us confidence that we will see an improvement by year-end. The rolling five-week average for the 10-week return to work rate since the start of the current financial year shows a general improving trend, however, has declined during December

6 The Australian RTW survey 2020 has been further delayed due to the COVID-19 pandemic, and at this stage will be delayed to mid 2021. 7A positive number for this measure would reflect a reduction in WC days paid. The negative numbers presented reflect the fact that WC days paid have actually increased, not

reduced. Longer term targets are for a reduction refer to ACC’s Service Agreement 2020/21. Using the active methodology our results are an increase of 6.6 days on baseline to 93.6 days. Active methodology measures the length of time existing clients have been on the Scheme. Exit methodology measures the length of time clients have been on the Scheme up to the point they exit the Scheme between 28 and 365 days.

due to usual seasonality. We expect results to improve in January 2021.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




• New WC commencements for the latest 12 months decreased by 2.6%. However, new WC commencements in the six months to December 2020 were 7.7% higher than the same period last year. This recent strong growth in WC commencements will be adding lower duration claims into the mix.

• The nine-month rate declined to 89.7% in December 2020, compared with 89.9% for November 2020 and 90.0% for October 2020.

• These results are measured on a rolling 52-week basis. Approaching nine months since national lockdown started, we

expect to see the impact of reduced new WC commencements volumes translate across this measure.

Analysis

• There has been a gradual increase in the proportion of new WC claims with a higher group of expected median injury duration claims, indicated by Expected Claim Outcome data. This results in a higher proportion of claims being assigned to management streams as opposed to low touch streams and are likely to put more pressure on our staff.

Durable return to work

• The durable return to work rate for December 2020 quarter increased slightly to 70%, up from 69% in September 2020 quarter. The rolling 4 quarter average durable RTW rate is 71%.

• The sample was smaller in December 2020 quarter with 179 injured clients compared to 216 in September 2020. This was due to a lower response rate.

• Of the 179 clients who completed the survey, 53 were not back at work at the time of the survey.

• The impact of the COVID-19 pandemic on access to healthcare is still apparent in this cohort, some of whom would have been seeking care during the 2020 COVID-19 lockdown. However, the direct impact on current employment status seems to have lessened compared to September 2020 quarter.

• Of the 179 clients surveyed, 25% reported having had trouble accessing healthcare due to COVID-19.

• When asked why they were not working:

o 9% reported they were made redundant or directly due to the impacts of COVID-19

o 9% reported that their employer had not found suitable duties for them


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




o 62% reported injury-related reasons (54% current injury, 4% new injury, 4% old injury)

o 12% reported they resigned, retired or were studying.

• This measure’s target is 1% higher than Australia’s most recent rate (77% in 2018). This rate may not reflect the current performance of Australia’s worker's compensation scheme as Australia's 2020 survey has been delayed due to COVID-19. The intent is to complete it in mid-2021. Normally ACC would benchmark every second year against our annual result for that year. We have recently moved to undertaking our survey quarterly to get better trend data. The benchmarking against Australia is out-of-date as each result comes in.

Reduction in average WC days paid

• The reduction in average WC days paid remained at -7.7 days for the month, the same result since September 2020. The overall result for Average WC days paid was 105.1 days for December 2020. The baseline that this measure compares to is 97.37 days.

Analysis

• The active WC claims pool has increased following the national COVID-19 lockdown during March to June.

• Active claims with less than a year of WC paid are 15% higher than the same time last year. This is a higher level of growth than reported at the end of November (10%).

Actions

• In November 2020, a detailed treatment plan was developed to improve short-term and long-term rehabilitation performance. Actions underway to improve short-term rehabilitation performance:

8 Flexible short-term workforce

o We continue to focus on reducing volume of outstanding work across our functions to enable us to operate proactively. A bubble8 workforce had been stood-up to focus on transactional tasks, and the student programme contributed strongly to closing outstanding non-customer facing tasks by closing up to 1,500 a day.

o Overtime campaigns were undertaken through to the Christmas break resulting in work on hand reducing. This reduction in outstanding tasks is planned to continue over the January/February 2021 period.

o During December 2020, we experienced some technical issues affecting emails and phone calls and manual work arounds were needed to mitigate the technology faults. This impacted recent progress but we still expect to reach our target levels by clearing the work on hand by the end of February 2021. Where possible, resources from other functions have been deployed to help ensure we are able to meet key customer touch points in agreed timeframes.

o These additional resources along with the flexible short-term workforce and a more stable email platform means outstanding email tasks have been cleared allowing an increased focus on overdue Eos tasks and incoming calls. We expect this to lead to an improvement in our client’s rehabilitation progression.

o Claims at risk of a longer than extended rehabilitation period than expected are being identified and prioritised for Recovery Check ins and urgent progression.

o We expect to see the usual seasonal performance pressures on short term rates over the December/January period before stabilisation. Work shut downs, treatment and rehabilitation provider availability all impact rehabilitation performance.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Long-term rehabilitation: weekly compensation

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Growth rate of the long-term claims pool Dec 2020 +14.0% Deteriorating +12.5% A +12.6%

Long-term claims pool returns to independence Dec 2020 4,091 Improving 2,000 G 3,593

Rate of long-term clients in part-time work Dec 2020 9.7% Improving 8.5% G 9.3%

Growth rate of the LTCP

• Growth of the long-term claims pool (LTCP) for the 12 months to December 2020 was 14.0%. This is higher than 13.4% reported in September 2020. There was an increase in the number of net entries during the month of December 2020, mainly due to clients entering the LTCP for the first time.

• A decline in the short and long-term rehabilitation rates have meant a higher than budgeted growth in the LTCP, contributing to an overspend in WC.

Analysis

• LTCP growth remains largely due to a higher number of clients entering the LTCP, mainly for the first time. This follows consistent growth in new WC claims in recent years. Lower than budgeted rehabilitation performance is also contributing to this growth.

• Just over half the LTCP entries are for clients from the Earners’ Account, for injuries outside work. This share has increased slightly to 52% for the last 12 months, compared to 49% for the previous 12 months. Just under a third of the entries in the past year are from the Work Account. This share is slightly lower than compared with the previous 12 months.

• The number of clients entering the LTCP from the Earners’ Account has grown 37% on an annual basis. This is higher than

entries from the Work Account, which have grown 24% in the same period.

• The LTCP return to independence measure continues to track ahead of target. Results for this have improved following an increase in ‘first time’ exits compared with lower numbers recorded between April and June, an anticipated recovery post lockdown.

Actions

• We have identified a cohort of LTCP claims that are most likely to be at risk from rehabilitation outcome delay. These have been manually reviewed with some being moved to a one to one management model, and others re-prioritised for remedial actions.

• The Return to Work Future State Experience Design process is currently underway. The focus of this process is to analyse non-serious injury long term cohort of claims who have received pain management or training for independence over the last year. These two cohorts have a total OCL of $2.8b.

• Initial findings are expected in late February 2021. This is an opportunity for ACC to consider how to better support clients to return to work and independence, both of which are priority areas for us.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Rate of long-term clients in part-time work.

• The abatement rate for long term clients remained at 9.7% for December. This is unchanged from November and up slightly on the results for October (9.4%) and September (9.2%).

Analysis

• Post lock down results for this measure initially declined. However, since August this measure has shown improvements.

Actions

• While COVID-19 has impacted the job market, we continue to support clients to achieve maximum independence from the Scheme, including part time work, irrespective of the duration of their claim


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Rehabilitation: non-weekly compensation

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Return to independence for those not in the workforce Dec 2020 87.9% Deteriorating 87.5% G 89.1%

• The December 2020 result for return to independence for those not in the workforce remains above target at 87.9%.

• The Return to Independence rate was around 89% in mid-2019 following growth in new claims from mid-2017. Results then eased to 88.5% by December 2019 and stayed around this until March 2020.

• There was a noticeable improvement in the rate immediately following the COVID-19 national lockdown in 2020, increasing to a record high results of 88.8% in April, 89.4% in May 2020 and 89.1% in June. Results were affected by a lower number of payments made around the time of the national lockdown.

• Since this measure checks the proportion of clients still receiving entitlements 12 months after registration, the reduction in use of services during the lockdown appears to have caused results to

temporarily rise. Since June most services resumed and payment volumes picked up again as clients continued their rehabilitation (with some delay) with the measure reflecting that.

• Other entitlements claims have grown strongly since the lockdown. The volume of new other entitlement claims increased by 6.4% for the July to December 2020 period compared to the same period in 2019. Because this is measured on a rolling 12-month basis, it is likely that the effects of this will be observed in results for some months ahead.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Reviews

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Reviews as a percentage of decline decisions Dec 2020 8.9% Deteriorating ≤ 8.9% G 8.2%

Average time to resolution for claims with reviews Dec 2020 93.9 days Improving ≤ 95.0 days G 93.2 days

Proportion of ACC reviews upheld (in favour of ACC) Dec 2020 89.9% Improving ≥ 85.0% G 87.2%

Reviews as a percentage of decline decisions has deteriorated since September 2020.

• Reviews as percentage of decline decisions was 7.4% for the month of December 2020 with the 12-month result dropping slightly to 8.9% to land on target.

• The volume of reviews continues to grow, up +1.3% or 116 reviews over the last 12 months. This is faster than the increase in decline decisions resulting in a deterioration in this measure. The growth area is in cover, which is up 6.9% or 169 reviews. In the month of December 2020, review volumes are down 1.7% or 12 reviews compared to the same period last year.

• In the month of December 2020, declined decisions were down by 1.1% or106 declines. The biggest decreases were in:

o Suspensions down 66.8% or 399 decisions and

o Cover down 3.7% or 244 decisions.

• The 12-monthly declined decisions decreased by 13.6% or 15,559 declines compared to December 2019. The biggest decreases are

o Suspensions down 41.5% or 2,973 decisions

o Weekly compensation declines down by 16.3% or 1,210 decisions

• Weekly compensation declines have continued to decrease since April 2020, and we are seeing a corresponding decrease in weekly compensation reviews.

Actions

• We have been looking at drivers of cover review applications. We have found no systemic issues with the cover assessment process or the way in which review applications were managed by ACC. Two improvement areas are being considered to enhance the client experience.

• An initiative using review outcome insights has been designed to understand the impact of ACC’s internal clinical commentary and the role the comments play in review outcomes and whether improvements can be made to lower review numbers.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Financial Summary

$m YTD

actual YTD

budget YTD

status Full year

budget

INCOME

Levy revenue 2,389 2,340 G 4,716

Interest, dividend and rental income9

570 591 A 1,200

Total income 2,959 2,931 G 5,916

EXPENDITURE

Claims paid (2,633) (2,533) A (5,068)

OCL (increase)/decrease (1,373) (994) R (2,145)

URL (increase)/decrease 799 794 A (1)

Core operating costs (236) (245) G (488)

Other operating costs (114) (124) G (241)

Total operating costs (350) (369) G (729)

Total expenditure (3,557) (3,102) A (7,943)

Deficit from insurance operations

(598) (171) R (2,027)

Net gains (losses) on investments

3,522 116 G 216

Net gains (losses) in discount and inflation rates on OCL

2,481 - A -

Net (deficit) surplus 5,405 (55) G (1,811)

9 In line with the intention to exclude gains and losses on investments relating to market movement and economic factors impacting OCL within the return

Key points

• Levy revenue is $49m or 2.1%, over budget YTD, mainly from a $14m over budget Work Account and $38m over budget in the Earners Account due to higher liable earnings in both Accounts.

• Total investment income of $4,092m is $3,385m higher than budget of $707m YTD. The investment reserves portfolio returned 8.88% after costs for December 2020 YTD, which is above the benchmark by 0.73%.

• Global equity markets continued to rise over December. The start of the roll out of COVID-19 vaccines and another fiscal stimulus package in the US offset concerns on the significant increase in new infection rates in the US and Europe.

• Foreign currency exposure had a negative impact on the performance (in NZ dollar terms) of the unhedged portion of offshore investments as the NZ dollar rose against its major crosses over the month. The NZ Trade Weighted Index was up 1.05% over December.

• Total claims paid YTD are $100m or 4.0% over budget, mainly due to:

o Significantly higher than expected weekly compensation commencements coupled with lower than budget rehabilitation outcomes.

o Strong increase in claim volumes within physiotherapy, high-tech imaging, radiology and general practitioners.

• New registered claims rolling 12-month rate is down 6.8%. New Weekly compensation claims rolling 12-month rate is down 2.6% but with strong growth in the last 6 months.

• Total operating costs are $19m or 5.1% under budget YTD.

from insurance operations sub-total, income relating to interest, dividend and rental income are recorded separately.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




• Core operating costs are $9m or 3.7% under budget YTD across most categories but mainly due lower costs in personnel, computer, professional and external levy collection expenses.

• Economic factors have contributed to $2.5b to the decrease in the OCL.

• This was mainly due to the single effective discount rate increasing to 2.40% as at December 2020 (26bps increase during December) compared to 1.86% at 30 June 2020. There was an increase in the projected inflation rate over the medium term increasing by 29bps in the month of December 2020. The OCL increased by $371 million in the December 2020 half year valuation. This was largely driven by weekly compensation and social rehabilitation for serious injury.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Financial KPIs

Measure Most

recent result

YTD actual Trend Full year

target Full year outlook

2019/20 actual

Actuarial movement Dec 2020 +0.62% Deteriorating Within

+ / - 1.5% G +0.48%

Investment performance after costs relative to benchmark Dec 2020 +0.73% Deteriorating +0.15% G 0.16%

Investment management costs as a proportion of total funds under management

Dec 2020 0.13% Stable 0.15% G 0.13%

Change in average treatment cost per claim Dec 2020 7.9% Deteriorating 8.4% G 6.4%

Administration cost per claim Dec 2020 $1,929 Stable $2,02710 G $2,875

Percentage of total expenditure paid directly to clients or for services to clients

Dec 2020 88.7% Stable 87.7%10 G 86.1%

Claims processed per FTE Dec 2020 519 Improving 549 G 508

Average care hours per serious injury claim Dec 2020 1,402 Stable 1,393 A 1,393

• The average care hours per serious injury claim improved slightly from 1,408 in September 2020 to 1,402 for December 2020. Because this is a measure of care hours for the past four quarters, we expect the impact of the lockdown and subsequent months will be felt in these results for some time. A number of factors contributed to the higher attendant care hours required over the lockdown period. While some of the higher levels have eased, we do have continued pressures:

o Some facilities/services remained closed or significantly reduced post lockdown levels changing, the time clients would ‘normally’ be involved in those activities reduced with a corresponding increase in need for care at home.

o A number of our clients are respiratory compromised (either directly a result of injury, e.g. spinal injuries, or due to other conditions) therefore even when the COVID-19 levels scaled down they have been unable to restart activities particularly if they involve exposure to public spaces and larger groups.

o A number of children and youth with compromised immunity received medical advice to not return to the school environment for a specified period (timeframes are varied for each person). In such cases the education facilities agreed to remote learning and attendant care for those clients remains at the school holiday/higher level.

10 Presented on a YTD basis for comparability. Full year targets are $2,805 and 87.9% as outlined in Service Agreement 2020/21.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




o Support Needs Assessments (SNAs) that guide how we manage attendant care and other services that would normally have occurred over the Lockdown levels were unable to be carried due to restrictions (especially prevalent for our Auckland Clients). The opportunities to ‘close the loop’ where independence may have been gained has been significantly delayed. We are now taking a staggered approach for SNA referrals so as not to overwhelm providers.

• The following activities are currently underway to help us with proactive OCL management:

o The care hours proposition design, a system view consolidating actions and lessons relating to the management of care hours, presented findings from the process in December 2020. This included opportunities to deliver improvements across the system. Potential opportunities from this work are being considered with leaders of the key teams involved, so follow up activity can be prioritised and delivered.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Financial Sufficiency

The funding policy sets out the mechanism for setting levies. There are two main elements to this:

New year claim costs

As a starting point, a rate for each Account is calculated to raise sufficient revenue to cover the expected lifetime cost of claims which are incurred in that year.

Funding adjustment

The above rate is then adjusted to return the Accounts to the funding target in line with the funding policy. This is referred to as the funding adjustment.

Any increase in the recommended levy or appropriation is then capped at 15% for levied Accounts and 7.5% for the appropriation. Decreased in funding are not limited.

New year claim costs gap

The below table identifies for the 2020/21 levy year the gap in revenue. This is calculated as the difference between the new year claim costs and the expected levy income or appropriation.

A negative gap here indicates that income is expected to be insufficient to cover the lifetime costs of new claims in that year. When an Account is over funded, the rate is deliberately set below the new year cost of claims to allow the over-funding to be returned to funders of the Account. All things being equal, a negative gap will cause a deterioration in funding ratios over time.

Conversely a positive gap implies that there is excess levy revenue to cover new year costs. For under-funded Accounts, this is a mechanism to return the Account to target funding position through a positive funding adjustment.

This table also provides the indicative levy rate or appropriation gap from the current levels to cover new year claims costs. Actual levy rate recommendations are calculated in line with the funding policy and take into account the new year claims cost, the funding adjustment and the period over which this needs to be spread - over a ten-year timeframe (or three years for any Non-Earners’ Account surplus).

New year claims cost gap - levy year 2021/22

As at 31 December 2020 Motor Vehicle Work Earners’ Treatment Injury

earners

Non-Earners’ including treatment injury non-earners'

Total

New year claims cost gap surplus / (shortfall)11

($396)m ($218)m ($540)m ($101)m $(132)m ($1,386)m

Current levy rate / appropriations $113.94 $0.67 $1.16 $0.05 $1,755m

Value, in levy and appropriations terms, of the new year claim cost gap

$(99.45) $(0.20) $(0.37) $(0.07) $(132)m

11 The difference, by Account, between levy and appropriations and the lifetime cost of claims in the 2020/21 financial year.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Funding ratios

The funding ratios represent the extent to which applicable net assets cover the value of the portion of the OCL that is expected to be fully funded (excluding risk margin) for each account12

The forecasts below are based on updated financial results and forecasts as at 31 December 2020.

The funding policy requires a cap to be applied to increases in each account. This cap is 15%13 for levied accounts and 7.5% for the Non Earners’ Appropriation

There is a lack of clarity around how frequently the cap on levied Accounts can apply, and the length of each levy cycle under the new funding policy. This is being clarified through Cabinet in early 2021 which will inform this year’s levy setting process.

The forecasts are shown under three scenarios

• Future levy rates are calculated and implemented using the 15% cap applied annually over a three year cycle. Non-Earners’ Appropriations will increase at a cap of 7.5%.

• Future levy rates are calculated and implemented using the 5% cap applied annually over a three year cycle. Non-Earners’ Appropriations will increase at a cap of 7.5%.

• Assumption that no levy rate changes will be made and there will be no Non-Earners’ Appropriation increases.

12 Funding ratios are presented as a percentage and calculated by dividing total

assets, less payables, accrued liabilities, provisions and unearned levy liability by the outstanding claims liability (including additional liability for work-related gradual process claims not yet made) excluding any risk margin. The funding ratio for the

Funding ratio trajectory

• The graphs are an indication of how the financial position of the Scheme has evolved and how it is projected to track over time under the three scenarios.

• Since 30 June 2020, favourable interest rate movements have been the main contributor to an improvement in the funding ratio of all accounts which are now forecast to be above the funding target as at 30 June 2021. However, economic factors are inherently volatile. A reduction in the interest rate could occur in any future period and would result in the funding position deteriorating.

• Since June 2020, the new year cost of claims for each Account have not changed significantly. Changes from interest rates were offset by increased inflation assumptions. There has been little change in the new year claims gap, resulting in a continued downward trend of the funding ratio.

• A sustained or growing new year cost gap can lead to the need for greater levy and appropriation increases in the future than would otherwise have been needed. This results in possible intergenerational inequities intended to be minimised by the design of the funding policy.

• Despite all levied accounts forecasting to be above budget at the end of 2020/21, Motor Vehicle and Earners’ accounts forecast to be below target by 2023/24 and 2021/22, respectively due to their existing new year claim cost gap.

Work Account excludes those claims, and equivalent assets, funded through the Accredited Employer Programme.

13 The Motor Vehicle Account is capped at 15% plus inflation.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES





CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Funding gap

Net Assets / (Liabilities) to funding gap reconciliation – Forecast 30 June 2021

$m Motor

Vehicle Work Earners’

Treatment Injury

Non-Earners' Total

Net Assets/(Liabilities) (1,092) 1,842 (1,689) (3,223) (8,222) (12,385)

Remove PAYG14 portion of OCL 1,638 4,663 6,300

Include WRGP IBNR15 off balance sheet OCL (1,691) (1,691)

Remove URL 267 358 868 1,492

Remove risk margin 1,966 1,181 1,357 900 1,061 6,465

Funding gap surplus / (shortfall) 1,142 1,690 535 (685) (2,499) 182

Funding ratio 108.0% 117.3% 104.6% 89.5% 67.5%

• The above table reconciles the differences between our net liability position by Account, and the funding gap in each Account that is used in the calculation of the Funding Ratio. The components are:

o Removal of the ‘pay as you go’ portions of the OCL for the Treatment Injury and Non-Earners’ Accounts as we do not seek to hold assets to cover the future costs of this group of historic claims.

o Addition of an off-balance sheet OCL relating to work related gradual process claims incurred but not reported in the Work Account. This element is not included in our balance sheet valuation of the OCL under NZ accounting standards, but we need to include this amount when fully funding the Work Account and in the calculation of the levy rates needed to achieve this.

o Removal of URL as the levy calculations already take URL into account.

o Removal of the Work Account claims and equivalent assets funded through the Accredited Employer Programme.

o Removal of the risk margin within each of the Accounts which under the new funding policy is no longer to be fully funded.

• A resulting positive funding gap implies that, per the funding policy, the Account has an excess in applicable assets required to cover the OCL we expect to fully fund. This gap is caused by a mixture of cumulative excesses and shortfalls in past years’ levies covering new year claims costs and the impact of changes in the valuation of the OCL from economic factors and claims experience. As noted above, the funding policy seeks to return to a funding gap of zero through changes in levies and appropriations over a 10-year horizon.

14 Pay As You Go 15 Work related gradual process claims incurred but not reported


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Building organisational health and capability

Maintaining a diverse, high-performing workforce empowered to deliver great customer experiences and outcomes

• We launched our Accessibility toolkit in December 2020 to support our disabled employees with the supports they need. Whilst our turnover rates are low for disabled employees, the Accessibility toolkit will also assist in attracting disabled staff because it is a demonstration of our support and commitment to appropriate accommodation for those who require it.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




People

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Employee net promoter score Nov 2020 +3 Stable +12 G +21

Proportion of ACC staff who identify as Māori Nov 2020 11.8% Stable 12% G 12%

Proportion of ACC staff who identify as having a disability Nov 2020 13.0% Stable 14% G 12%

Total recordable injury frequency rate Dec 2020 3.2 Stable <3.5 G 3.2

Lost-time injury frequency rate Dec 2020 1.0 Stable <1.1 G 1.0

• We are starting to see the results of recent initiatives to increase the proportion of new employees who are Māori.

• We have seen an increase in the proportion of applicants who identify as Māori and we have significantly increased the proportion of our shortlisted candidates who are Māori (see chart below). This has been achieved through our recruitment team actively broadening the shortlist criteria to take into account more diversity for interviews. We are beginning to see this translate through into more Māori employees being recruited.

• Our success in recruiting disabled employees is more variable across the last six months with less applicants disclosing their disability during the application process.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Information

Measure Most recent

result YTD actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20

actual

The number of category 3, 4 or 5 privacy breaches and near misses Dec 2020 0 Stable

<5

No

category 5

G 0

• 42 breaches were reported in December 2020, 3 are at impact level 2 and 39 are at harm level 1.

• While the level of low level breaches continues to be high, incidents are being well managed at the frontline and no incidents have escalated to the point of needing to be reported externally (i.e. become harm level 3,4 or 5).

• Two of the Level 2 breaches in December 2020 involved the loss of copies of client medical records (in both cases these were extensive sensitive mental health records). Following extensive investigation, it is likely that these were destroyed by the Justice Centre mailroom. These incidents have highlighted a number of processes that could be improved in handling physical records and we are currently working on a quality review to recommend improved systems and processes.

• Regular catch-ups between Privacy and frontline leaders continue on a monthly basis. As part of the 6-month plan, site visits to Counties Manukau and Nelson took place during December 2020.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Technology

Measure Most recent

result

YTD

actual

Trend

(Prev Qtr)

Full year target

Full year outlook

2019/20 actual

Overall operational system availability Dec 2020 99.9% Stable 99.5% G 99.9%

• The overall monthly availability metric was above target for the month of December 2020 at 99.86%. Rolling twelve-month availability remains above target.

• There were nine incidents in December, two high, two medium and five low impact events.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Integrated Change Investment Portfolio

The following is a summary of the status of our integrated change investment portfolio expenditure and benefit measures

$m Most

recent result

Life to date actual

Life to date budget

Full year

Outlook

Life to date June 2020

Whole life budget

Total cost Dec 2020 499 505 G 480 669

Measure Most

recent result

YTD actual Full year

target Full year outlook

2019/20 actual

Page reference

Client net trust score Dec 2020 +28.0 +26 G +31.0 16

Provider net trust score Dec 2020 -12.0 -17.0 G -14.0 16

Business net trust score Dec 2020 -11.0 -20.0 G -1.0 16

Claims processed per FTE Dec 2020 515 549 G 508 32

Reduction in average WC days paid(exit methodology)16 Dec 2020 -7.7 days

[105.1 days] -7.0 days A -4.9 days 23

Employee net promoter score Nov 2020 +3 +12 G +21 38

16 A positive number for this measure would reflect a reduction in WC days paid. The negative numbers presented reflect the fact that WC days paid have actually increased, not

reduced. Longer term targets are for a reduction refer to ACC’s Service Agreement 2020/21. Using the active methodology our results are an increase of 6.6 days on baseline to 93.6 days. Active methodology measures the length of time existing clients have been on the Scheme. Exit methodology measures the length of time clients have been on the Scheme up to the point they exit the Scheme between 28 and 365 days.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Appendix 1: Financial statements to 31 December 2020

Statement of financial performance

$m Year to date

Actual17 Budget Prior year

actual

2020/21

Budget

Levy revenue 2,389 2,340 2,259 4,715

Interest, dividend and rental income18 570 591 659 1,200

Other income - - - 1

Total income 2,959 2,931 2,918 5,916

Treatment (1,136) (1,141) (1,038) (2,247)

Rehabilitation (523) (509) (494) (1,013)

Compensation (950) (860) (842) (1,759)

Miscellaneous (24) (23) (22) (49)

Total claims paid (2,633) (2,533) (2,396) (5,068)

Movement in OCL (1,373) (994) (1,173) (2,145)

Movement in unexpired risk liability 799 794 636 (1)

OCL and URL movement (574) (200) (537) (2,146)

Investment costs (14) (14) (26) (29)

Injury prevention costs (36) (39) (78) (76)

Enterprise change programme (40) (46) (51) (86)

Depreciation & amortisation (24) (25) (24) (50)

Core operating costs (236) (245) (247) (488)

Total operating costs (350) (369) (426) (729)

Total expenditure (3,557) (3,102) (3,359) (7,943)

Performance from insurance operations (598) (171) (441) (2,027)

Net gains on investments18 3,522 116 943 216

Impact of economic assumptions and other factors

2,481 - 1,360 -

External factors 6,003 116 2,303 216

Surplus / (deficit) 5,405 (55) 1,862 (1,811)

17 Actual – OCL adjustment is based on the half-year valuation as at 31 December 2020 and using the actual discount

rate at 31 December 2020 18 Investment returns are budgeted at between 2.66% - 4.07% for each Account. ACC chooses to incur many of the

market risk exposures through its investment portfolios, either because they provide a natural offset to risks inherent in the outstanding claims liability, or because it expects to enhance returns through prudent exposure to these risks.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Work Account

$m YTD to 31 December 2020

Actual Budget Prior Year

Actual

2020/21

Budget

Levy Revenue 381 367 424 746

Interest, dividend and rental income 133 123 157 251

Other income 0 0 0 -

Total income 514 490 581 997

Total claims paid (483) (452) (452) (911)

Movement in OCL (71) (33) (98) (126)

Movement in unexpired risk liability 249 249 207 32

Administration costs (109) (117) (124) (231)

Total expenditure (414) (353) (467) (1,236)

Performance from insurance operations 100 137 114 (239)

Net gains on investments 694 25 187 44


79 0 132 -

External factors 773 25 319 44

Surplus / (Deficit) 873 162 433 (195)

Motor Vehicle Account

$m YTD to 31 December 2020 2020/21


Actual Budget

Levy Revenue 227 230 219 459



Total income 405 401 429 806


Movement in OCL (318) (223) (259) (452)

Movement in unexpired risk liability (5) (10) (18) (20)



Performance from insurance operations (289) (216) (207) (435)



693 0 373 -

External factors 1,665 33 598 62

Surplus / (Deficit) 1,376 (183) 391 (373)


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Earners’ Account $m YTD to 31 December 2020 2020/21


Actual Budget

Levy Revenue 866 828 847 1,682


Other income 0 0 0 1

Total Income 1,002 982 1,005 1,994

Total claims paid (984) (921) (872) (1,848)

Movement in OCL (395) (315) (293) (688)

Movement in unexpired risk liability 555 555 447 (13)



Performance from insurance operations 62 172 130 (810)



252 0 225 -


Surplus / (Deficit) 1,254 202 640 (753)

Non-Earners’ Account $m YTD to 31 December 2020 2020/21


Actual Budget

Levy Revenue 764 764 636 1,527



Total income 822 841 698 1,683

Total claims paid (696) (673) (634) (1,336)

Movement in OCL (207) (238) (165) (498)

Movement in unexpired risk liability 0 0 0 -






784 0 371 -


Surplus / (Deficit) 1,125 (117) 332 (245)


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Treatment Injury Account

$m YTD to 31 December 2020 2020/21


Actual Budget

Levy Revenue 151 151 133 301



Total income 216 217 205 436


Movement in OCL (381) (185) (358) (381)

Movement in unexpired risk liability 0 0 0 -


Total expenditure (543) (349) (508) (705)


Variance to expected investment return 432 13 110 24


672 0 259 -


Surplus / (Deficit) 777 (119) 66 (245)


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Statement of financial position

$m As at 31 December 2020 2020/21

Actual Budget

Prior year actual Budget

Account reserves

Work 2,209 1,498 2,412 1,141

Motor vehicle (865) (2,425) (733) (2,614)

Earners’ (699) (1,749) (5) (2,705)

Non-Earners’ (8,101) (9,342) (7,299) (9,470)

Treatment Injury (3,099) (3,996) (2,526) (4,122)

Other reserves 0 0 0 -

Total reserves (deficit) (10,555) (16,014) (8,151) (17,770)

Assets

Cash and cash equivalents 311 256 137 256

Receivables 574 565 380 221

Accrued levy revenue 813 943 850 2,487

Investments 50,361 47,839 46,576 46,614

Derivative financial instruments 1,004 0 0

Property, plant and equipment 22 22 21 21

Intangible assets 140 140 152 130

Total assets 53,225 49,765 48,116 49,729

Liabilities

Payables and accrued liabilities (1,144) (1,869) (1,749) (271)

Derivatives financial instrument (798) 0 0

Unearned levy liability (811) (777) (817) (2,149)

Unexpired risk liability (672) (676) (569) (1,471)

Outstanding claims liability (60,355) (62,457) (53,132) (63,608)

Total liabilities (63,780) (65,779) (56,267) (67,499)

Net assets (liabilities) (10,555) (16,014) (8,151) (17,770)

Reconciliation of funds under management19

$m Actual

Investments 50,361

Short-term deposits 310

Net derivatives 206

Investment receivables 164

Investment payables (831)

Total funds under management 50,210

19 This reconciliation identifies the Investment groups reported “funds under management” versus the balance sheet

components reported under accounting requirements


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Funding ratios

• The funding ratios represents the extent to which applicable net assets cover the value of the fully funded portion of the OCL (excluding risk margin) for each account

• It is presented as a percentage and calculated by dividing total assets, less payables, accrued liabilities, provisions and unearned levy liability by the outstanding claims liability (including additional liability for work-related gradual process claims not yet made) excluding any risk margin. The funding ratio for the Work Account excludes those claims, and equivalent assets, funded through the Accredited Employer Programme.

$m As at

31 December 2020

As at

30 June 2021

As at

30 June 2020

Actual Budget Target Budget Actual

Levied Accounts:

Work20

Including gradual process claims incurred but not yet made 118.6% 110.5% 100.0% 109.2% 111.4%

Motor vehicle 109.6% 99.1% 100.0% 98.1% 100.1%

Earners’ 107.9% 98.8% 100.0% 95.9% 101.6%

Non-levied Accounts:

Non-Earners’

Fully funded portion21 68.3% 58.4% 100.0% 58.1% 58.8%

Treatment Injury

Non-Earners’ fully funded portion21 70.5% 60.4% 100.0% 59.5% 61.4%

Earners’ portion 152.9% 143.6% 100.0% 142.1% 145.0%

20 The Work Account funding ratio, as required by the AC Act and in accordance with accounting standard, only includes the OCL for gradual process claims made to ACC. However, the levies collected allow for the additional liability. For comparison, the funding ratio for including liability for future claims that have not yet been made is also provided. 21 Funding policy for the Non-earners’ Account and the Non-earners’ portion of the Treatment Injury Account is set by

the government. Pre-2001 claims are funded on a pay-as-you-go basis. Post-2001 claims are fully funded minus the addition of a risk margin.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Outstanding claims liability (OCL)

$m As at 31 December 2020

Actual Budget Prior year

actual

2020/21

Budget

Opening balance – 1 July 2020 (61,463) (61,463) (53,319) (61,463)

Movement due to:

Expected increase (992) (994) (982) (2,145)

Impact of change due to frequency update

(10)

Impact of claims experience (371) 0 (199) -

Model recalibration 0 0 8 -

(Increase) / decrease in OCL (1,373) (994) (1,173) (2,145)

Impact of discount rate assumptions 6,563 0 2,000 -

Impact of change in inflation assumptions

(4,010) 0 (643) -

Impact of adjustments due to key inflation indicators22

(72) 0 3 -


2,481 0 1,360 -

Closing balance (60,355) (62,457) (53,132) (63,608)

Long-term discount rate 4.30 % 4.30 % 4.30 % 4.30 %

Single effective discount rate 2.40 % 1.86 % 2.63 % 1.86 %

22 The impact of adjustments due to key inflation indicators include the Labour Cost Index, Consumer Price Index and Average Wage Earnings changing in a manner not predicted by the previous valuation.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Statement of cash flows

$m As at 31 December 2020

Actual Budget Prior year

actual

2020/21

Budget

Cash flows from operating activities

Cash was provided from:

Levy revenue 2,426 2,401 2,482 4,678

Investment income 562 591 671 1,200

Sundry income 0 0 1 1

Goods and services tax (net) 23 0 9 -

3,011 2,992 3,163 5,879

Cash was applied to:

Payments to injured persons, suppliers and employees

(3,011) (2,999) (2,786) (5,892)

Goods and services tax (net) 0 (38) 0 (10)

(3,011) (3,037) (2,786) (5,902)

Net cash movement from operating activities

0 (45) 377 (23)

Net cash flows from investment activities

Cash was provided and applied to:

Net purchase and sale of investments 69 59 (299) 52

Net purchase and sale of property, plant & equipment, and intangible assets

(14) (14) (27) (29)

Net cash movement from investing activities

55 45 (326) 23

Net increase in cash and cash equivalents

55 0 51 -

Cash and cash equivalents – opening balance

256 256 86 256

Cash and cash equivalents – closing balance

311 256 137 256

Second Quarterly Report 2020/21 51

CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Appendix 2: Organisational risks

The six entity risks rated High or Extreme are listed below. Many of them are important to delivering our planned initiatives. Most treatment plan actions are scheduled to be completed over the 2020/21 financial year; some will be completed in later years. COVID-19 is no longer having a material impact on any of the entity risks.

Risk Key Management activity

Customer Outcomes

If we do not define and measure outcomes

effectively, we may not fulfil our obligations

under Te Tiriti o Waitangi and may fail to

meet the current and future needs of our

customers (injured people, levy payers,

safer communities) in the context of ACC’s

strategic outcomes:

• Reduce the incidence and severity of

injury

• Rehabilitate injured people more

effectively

• New Zealand has an affordable and

sustainable Scheme

Key Management activity:

• Development and implementation of a health outcomes framework as a tool for identifying and structuring the health

outcomes that matter for our customers.

• Design and development of a customer outcomes framework for defining and assessing the effectiveness of all ACC

services.

• Creation of a Whāia Te Tika Action Plan to improve Māori client access, experience and outcomes.

• Delivery of Next Generation Case Management performance actions which involves a focus on automation and streamlining of processes and services to strengthen the support we provide to our customers.

Māori Access and Outcomes:

We fail to make progress in implementing

initiatives that are meaningful, scalable or

timely enough to materially improve

Scheme access, outcomes and

engagement with Māori.


• Increase the number and range of kaupapa Māori services available to communities and injured clients.

• Create opportunities for Māori to thrive as Māori through targeted partnerships.

• Increase cultural intelligence and capability across ACC.

• Measure our progress and evaluate our impact through insights gained by the creation of a Māori Customer Advisory

panel and engagement in research of Māori client access, experience and outcomes.

Claims Cost Management:

We do not adequately anticipate, monitor

and respond to claims cost performance

trends resulting in pressures on levy rates.


• Develop and implement scalable and repeatable automated early detection and monitoring tools for use by risk owners to identify and treat anomalies in weekly compensation as a result of fraud, waste and abuse.

• Address performance of the Long-Term Claims Pool by initiatives that (among other things) improve rehabilitation

times and ensure clients receive the optimal care for the appropriate length of time.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Risk Key Management activity

• Consolidate current activity and recent lessons relating to the management of care hours into a proposition design

process with a systemised approach to addressing identified issues.

• Review the current methods and standardise the approach for requesting medical notes.

• Create a new service schedule, pricing schedule and embed associated front-line process to provide ACC with the tools to monitor and manage spend in relation to Residential Support Services.

Improve management of clinical services with little or no proven efficacy.

Models:

Reliance on material models to facilitate

key organisational decisions (resource

allocation or investments) result in

unintended outcomes due to the limitation

in that model as a result of a lack of

judgement applied to the interpretation of

the model output, poor model calibration,

model design flaw or documentation.

Management activity:

• Develop model governance and framework.

• Finalise model policy and standards.

• Complete gap assessment between existing model practices and framework. Take steps to address any gaps.

• Fully document key models.

• Establish and embed model governance and ongoing compliance monitoring.

Response and Business Interruption

Management:

Failure to effectively respond to, and

recover from, a business interruption.


• Deliver Business Continuity Work Programme.

• Organisational review of preparedness for cyber security incidents.

Benefits:

We fail to effectively identify and/or realise

the short- and long-term outcomes and

benefits of our Transformation investment.


• Embed an ACC data model standard to exchange data with other agencies and across sector.

• Health Sector Strategy initiatives: Work with providers to understand levers and opportunities that will increase

Escalated Care Pathways volumes and undertake an initial assessment of short-term claims cost management

opportunities.

• Delivery of Next Generation Case Management actions aimed at lifting performance.

• Develop and implement scalable and repeatable automated early detection and monitoring tools for use by risk owners

in the identification and treatment of anomalies as a result of fraud, waste and abuse.

In addition, risks in relation to change delivery, people and culture, cyber security, protecting customer information are closely monitored.


CLAIMS EXPERIENCE

INJURY PREVENTION

CUSTOMEROUTCOMES




Appendix 3: Additional measures

Asset performance measures

Measure Most recent

result

2019/20

actual YTD actual Full year target

Full year

outlook

ICT

Utilisation: Average number of claim system transactions per minute. Dec 2020 90 88 >75 G

Condition: Number of critical faults for key ACC systems Dec 2020 1 3 <5 G

Condition: Percentage key systems with a condition rating of Good or Excellent Dec 2020 93.3% 100% >80% G

Functionality: Total operational ICT spend per full-time equivalent (FTE) Dec 2020 $22,207 $21,927 $28,200 G

Availability: Percentage of time key applications and networks are available to perform required functions

Dec 2020 99.9% 99.9% 99.5% G

Pro

pe

rty

Utilisation: Square metres (m2) of leased area per FTE Dec 2020 16.0m2 15.44m2 12 – 16 m2 / FTE G

Condition: Percentage of total leased area with a current code compliance certificate/ building warrant of fitness

Dec 2020 100% 100% 100% G

Functionality: Percentage of total leased area that meets or exceeds the ACC security standards

Dec 2020 100% 100% 100% G

Annual measures

Measure Most recent

result Actual

Full year

target

Ratio of this year’s total levies to the total claims incurred for this year’s accidents

over time June 2020 0.4 0.5 – 0.7

introduction - acc.co.nz

Documents