The NSW workers compensation scheme and nominal insurer (icare) have come under fire from an industry expert. icare insures 3.6 million employees and collects over $2 billion in premiums p.a. According to former principal actuarial adviser, the NSW scheme is in jeopardy.
NSW workers compensation under fire – A report written by Tim Boyd of The Australian Financial Review indicates the sustainability of the NSW workers compensation nominal insurer (icare) is in jeopary according to recently retired EY Partner Peter McCarthy. Mr McCarthy who most recently worked with the NSW workers compensation regulator – State Insurance Regulatory Authority (SIRA) – identified the following as key reasons why the scheme is heading for crisis:
- Cost blowouts
- Poor claims management
- Deteriorating worker outcomes
“I have been advising or working in personal injuries schemes like icare around Australia and overseas for nearly 35 years and I have never seen a scheme deteriorate as much in such a short time frame,” Mr McCarthy told The Australian Financial Review.
According to Mr McCarthy, if the scheme went into deficit, employer premiums would have to increase by between 45 – 60%. With this in mind, the majority of clients that ABILITY GROUP assist managing their workers compensation premiums, would suffer greatly or be unable sustain such premium increases.
icare’s Chief Executive Mr John Nagle has rejected comments the NSW workers compensaiton scheme is heading for crisis although indicated that in 2017 icare started taking new business onto it’s own policy & billing system as well as taking over renewals from the scheme agents.
“What we found through that process is that there was quite an issue around the quality of data that we had from the scheme agents and quite a bit of tidying up to do around correct allocation of premiums and codes to premiums, which took us quite a while to sort through.” John Neagle icare Chief Execuitve informed The Australian Financial Review.
The article covers in detail the reasons why the NSW workers compensation scheme is in trouble highlighting key indicators that support Mr McCathy’s perspective.
We encourage all NSW businesses to read this article to gain insights from this industry expert. If you would also like to understand what this might mean for your business or want to understand how ABILITY GROUP can assist in minimising premium increases, contact our workers compensation specialist to discuss.
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Source: Australian Financial Review
Title: NSW workers compensation scheme under fire
Read time: 5 minutes