With market speculation now confirmed, CGU will exit the NSW workers compensation scheme when its agency agreement with icare ends in late 2017. As noted in our February 2017 Update, expectations were that the five current agents (Allianz, CGU, EML, GIO, and QBE) would reduce to three in 2018. CGU’s withdrawal raises the question of whether icare will be content with four agents holding roughly 45% market share, or if they will still pursue consolidation to three.
CGU will exit the NSW Workers Compensation scheme after 2017, with CEO Ben Bessell stating the current model is not commercially viable. The insurer will not tender to remain a NSW agent but will continue offering workers’ compensation insurance in other states.
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.