Australian small and medium businesses are being pushed to treat workforce and mental-health exposures as core insurable risks, a shift now reflected in insurer research, tightening regulation, and workers’ compensation claims data. Vero Insurance and GIO Workers Compensation put that trend in the frame on July 6, 2026, when they opened entries for the 18th RM Advancer Awards, their annual risk management recognition program.
According to Vero’s 2026 SME Insurance Index, which surveyed more than 1,500 businesses and was released in March, over half of respondents flagged human factors such as mental health and staff retention as a concern. The same research found 75% of small businesses take an “ad hoc” approach to risk management, and that a third of small-business owners were unfamiliar with business continuity planning (BCP), a reminder that psychosocial-risk maturity remains aspirational for most SMEs rather than achieved.
Anthony Pagano, Vero’s head of distribution, tied those findings to a widening risk environment. “SMEs are navigating a landscape shaped not only by economic uncertainty, but an expanding range of risks, with over half of our survey respondents concerned with human factors like mental health and staff retention,” Pagano said when the index was released.
The prominence of psychosocial risk is not only a matter of sentiment. Under Australia’s harmonised work health and safety laws, a person conducting a business or undertaking must eliminate or minimise psychosocial risks so far as is reasonably practicable, according to Safe Work Australia, which defines psychosocial hazards as anything at work that may cause psychological harm, including workload, bullying, harassment, and exposure to violence.
That duty has been sharpened over the past year. SafeWork NSW’s Work Health and Safety Regulation 2025 strengthened the requirements, with section 55C explicitly requiring the hierarchy of controls to be applied to psychosocial risks, meaning higher-order measures such as work redesign and staffing rather than reliance on policies, training, or employee assistance programs alone. In Victoria, the Occupational Health and Safety (Psychological Health) Regulations 2025 commenced on Dec. 1, 2025, according to the Victorian government, and similarly require employers to prioritise altering work design, systems, and management of work over information or training as controls, completing a national move toward explicit obligations across jurisdictions.
The commercial case sits in the claims data, which points in one direction nationally. Safe Work Australia’s Key Work Health and Safety Statistics Australia 2025, released in October, reported that mental health conditions accounted for 12% of all serious workers’ compensation claims in 2023-24, or 17,600 claims. That represented a 14.7% rise on the prior year and a 161% increase over the decade, the largest growth of any injury category. The median time lost from work for these claims was 35.7 weeks, almost five times the all-injury median, with median compensation of $67,400 against $16,300 for other injuries. The most common causes were harassment and workplace bullying at 33.2%, work pressure at 24.2%, and exposure to violence and harassment at 15.7%.
Psychological claims have become among the more consequential cost drivers in workers’ compensation, combining high per-claim costs with extended time off and lower return-to-work rates. The concentration is starkest where a state has quantified it. In a ministerial statement to the NSW Parliament on March 18, 2025, Treasurer Daniel Mookhey said psychological claims made up 12% of the state’s workers’ compensation claims but 38% of the total cost, and that the average cost of such a claim had risen from $146,000 in 2019-20 to $288,542 in 2024-25. He said the Nominal Insurer held 85 cents in assets for every dollar needed to care for injured workers, that 88% of workers with physical injuries returned within 13 weeks while 40% of those with psychological injuries remained off work after a year, and that claim-free businesses could face premium rises of 36% over three years without reform.
That trajectory drove legislative change relevant to how brokers’ clients will be assessed and priced. NSW passed two reform acts, the Workers Compensation Legislation Amendment Act 2025, assented in November 2025, and the Workers Compensation Legislation Amendment (Reform and Modernisation) Act 2026, assented in February 2026. Under the changes, a primary psychological injury is compensable only where it results from a defined “relevant event” with a real and direct connection to employment, and weekly benefits for such injuries are capped at 130 weeks unless the worker meets a whole person impairment threshold of at least 25%, rising in later years. A two-year freeze on the Nominal Insurer’s premium target collection rate took effect from June 30, 2026, holding it at the 2025-26 level to June 30, 2028. As of SIRA’s May 2026 guidance, the regulator said the NSW government was still to confirm commencement dates for the psychological-injury provisions.
Against that backdrop, the 2026 RM Advancer program is structured around three categories, per the nomination materials: Best Continuous Improvement, Excellence in Risk Prevention, and Outstanding Risk Recovery Solution. Entry is open to current Vero and GIO Workers Compensation clients, and entries close at 5pm AEST on Sept. 18, 2026, with finalists advised before Oct. 1 and winners named at a Sydney ceremony on Nov. 12, according to the awards’ terms and conditions.
David Hoffmann, Vero’s executive general manager commercial, linked the program to the shifting risk landscape. “This means that businesses have needed to stay light on their feet, adapting their practices to combat these changing risks,” Hoffmann said.
The awards run alongside this shift rather than tracking it, and past recognition has largely been for physical-safety and claims outcomes. Among the 2025 winners, Vero reported that Buller Ski Lifts recorded a 10% reduction in injuries per skier day, and that KCA Site Services cut claims from seven to three while improving reporting times by 79%. For brokers, the market context is pointed: the Vero index found over half of businesses acted on broker risk advice, and 42% had used the same broker for more than three years, even as Pagano noted a backdrop of broker consolidation and competition.
