TIO 2007 Annual Report

072007 ANNUAL REPORTare being driven by lower claims costs and agreater and on-going focus on case management.The Motor Accidents Compensation Schemeperformed well against industry benchmarks, andsignificantly premiums remained unchanged forthe third successive year.As required under new statutory requirements,2006/2007 saw the appointment of aContributions Commissioner to oversee anindependent pricing regime.Significant amendments to the Motor Accidents(Compensation) Act were passed by the LegislativeAssembly during 2006/2007 for commencementon 1 July 2007. Most notably, the abolition ofcommon law for non Territory residents will ensurea more equitable basis for compensation benefitpayments for all claimants.INVESTMENTSLast year we reported the appointment ofinternational firm Watson Wyatt as TIO’s assetconsultants. A review of TIO's investment strategywas subsequently undertaken and resulted inchanges to the organisation's investmentallocations. As at June 2007, the asset classeswere as follows:TIO INVESTMENT ALLOCATIONS 30 JUNE 2007Direct PropertyThe total investment return for the year was13.6% net of expenses (14.3% gross) forInsurance and 14.1% net of expenses(14.8% gross) for Motor Accidents Compensation.Both returns were well above their portfoliobenchmarks.RISK MANAGEMENT AND COMPLIANCE2006/2007 initiatives included:Full implementation of a prudential standardregime based on the Australian PrudentialRegulation Authority (APRA) Standards applyingto financial services industry.• Ongoing refinement of the risk managementframework which facilitates the identification,monitoring and management of all of TIO’s keyrisk exposures.• Revision of TIO’s Business Continuity Plan whichenhances the organisation’s ability to respond tobusiness disruption events and provide continuityof services to customers.• Refinement of the compliance managementframework to respond to the increasingcompliance obligations of the industry includingthe Federal Government’s new Anti-MoneyLaundering legislation.MAC INVESTMENT ALLOCATIONS 30 JUNE 2007Direct PropertyGlobal ListedProperty2.7%19.3%28.1%CashGlobal ListedProperty7.8%11.5%25.9%CashInternationalEquitiesAustralianEquities10.8%10.8%12.2%AustralianLinked Bonds16.0%AustralianFixedInterestInternationalEquities13.8%13.8%AustralianEquities6.8%InternationalInflationLinked BondsAustralian7.0%FixedInterest6.6%Australian6.9%InflationLinked BondsInternationalFixed Interest11