With continued market speculation, earlier today it has been confirmed that CGU will exit the NSW workers compensation scheme when their agency agreement with icare expires at the end of 2017.
Per our previous articles and as recently as our February 2017 Update, it was expected that the current 5 agents (Allianz, CGU, EML, GIO & QBE) would reduce to 3 agents for 2018.
With the announcement of CGU’s decision to exit the scheme questions will be asked as to if icare will be happy with 4 agents at approximately 45% market share or if they will pursue the anticipated reduction to 3 agents.
CGU Exit NSW Workers Compensation – insurancenews.com.au reported earlier today that Ben Bessell (CEO IAG Australian Business Division) has indicated the model under which the NSW Workers Compensation scheme now operates is not commercially viable. CGU have therefore decided not to tender be a NSW agent beyond 2017. CGU will continue to support the other states they currently provide workers compensation insurance.
Given the news of CGU’s exit, industry speculation will now focus on if icare will proceed with the speculated reduction to 3 NSW agents or if they will be satisfied with continuing with 4 agents with approximately 25% market share each.
ABILITY GROUP possess strong working relationships with Allianz, EML, GIO & QBE and would welcome 4 agents operating beyond 2017. Our belief is 4 agents will provide greater business/broker choice and the ability for service differentiation.
We will continue to monitor and provide updates. Needless to say if you have any questions regarding what will happen to your policy (if you are with CGU in NSW) then please contact us to discuss.