Page 166 - Pharmacy Appeals 1/4/04 to 31/3/05

142 Financial statements

Table 28: Key assumptions in the CNST IBNR provision
Assumption Approach Degree of Sensitivity Change in assumption between Effect of
uncertainty to changes 31 March 2021 and 31 March 2022 change
(CNST IBNR)
The EN scheme has accelerated
the reporting of potential PPO
claims. We have allowed for this by
specifying separate assumptions
for claims that are expected to be
Derived from reported under the EN scheme.
past claim Generally we assume that there
numbers and will be a similar number of
successful PPO claims but there has
development
been a slightly higher number of
Ultimate patterns and
number of assumptions that Medium High potential PPO claims reported over +^ § |3 j||jon
claims the level of risk the year which leads to a slight
will be similar to increase in the assumed number
previous years, of claims and IBNR provision.
adjusted for The expected number of future
levels of activity non-PPO claims is similar to last
year. We continue to assume
that the number of non-PPO
claims arising from 2 0 2 0 / 2 1 will
be lower owing to disruption in
clinical activities due to Covid-19.

Impact is
Value threshold A value-based threshold has
minimal and
derived been used to identify potential
Propensity to included
from recent Medium Medium PPO claims. The selected value
settle as PPO in ultimate
years' settled of the threshold has increased
number of
claims data slightly from £3.25m to £3.5m.
claims above
The average cost per claim
Derived from assumptions have increased slightly
past settled but haven't kept pace with the
claims-set expected level of claims inflation.
Average cost separately for
The assumed average cost for . £ 4 5 billion
per claim damages, NHS
PPOs also depends on the HM
legal costs
Treasury discount rate used
and claimant to place a present value on
costs
structured settlement payments.
This has been accounted below.