Insurance and care provider icare has sought the State Insurance Regulatory Authority’s (SIRA) approval for workers’ compensation premiums in New South Wales (NSW) to increase from 1.4% to 1.44% of wages in the next financial year.
Average premiums have not increased since 2014, with last year’s premium changes put on hold to support NSW businesses during the COVID-19 pandemic. But now, icare is pushing for premium adjustment to balance the ongoing support to NSW businesses with the longer-term inflationary pressures on the workers’ compensation scheme.
“The NSW workers’ compensation scheme holds almost $18 billion worth of assets. However, there have been significant cost pressures over the past eight years which have been absorbed by the scheme as premiums were kept on hold,” said icare chief executive officer Richard Harding.
“In making this recommendation, we have considered the future risk to scheme performance, including volatile investment markets, the delivery of operational improvements, and the ongoing impact of COVID-19.”
icare is seeking modest increases to premiums over the medium term of 2.9% per year over the next two years, within the parameters of other normal business expenses such as utilities, to ensure no knee-jerk reactions or rate shock for businesses. It offered assurances that the adjusted premiums would remain below the national average.
Harding said the premium increase would allow the insurer to improve its performance and reduce internal costs by saving $100 million.
“We will ensure businesses benefit from the improvements through better services, not through their wallets,” he said. “Getting injured workers back to work sooner is always the best thing for workers and employers and also reduces costs to the scheme. This is why it is one of my top three priorities as the new CEO and a key focus of the new Group Executive of the Nominal Insurer.
“We will also continue investment into programs that drive real safety outcomes like the Protect Together program, which has a safety improvement record of 18%,” he continued. “We have identified and will work with the 20% of employers who represent over 60% of all scheme costs and accelerate the improvement in their employer safety records.”