Unions
Workers comp “fragile”
Report highlights cost blowouts and poor return-to-work outcomes.
A review of the NSW workers’ compensation scheme Nominal Insurer (NI) commissioned by the State Insurance Regulatory Authority (SIRA) and prepared by an independent reviewer Janet Dore has exposed serious issues with the claims model, reports the Sydney Morning Herald.
The report highlights the financial fragility of the scheme and the poor outcomes in getting workers back to work.
Icare, which manages NI, was set up in 2015 after the WorkCover Authority of NSW was abolished. In 2018, Icare set up a new claims model and reduced the number of claims agents from five to one.
The Dore Report said “the new claims model led to a significant deterioration in the performance of NI, through poorer return-to-work rates, underwriting losses, no competition and therefore concentration of risk”.
It said workers were not getting the prompt treatment they required to get them back to work early.
It noted that the return-to-work rate plummeted from 96 per cent in 2016 to 73 per cent in 2019.
Dore noted the new claims model was causing cost blowouts and, in financial terms, “the position is somewhat fragile”.
In 2019, Icare posted a net loss of $874 million, almost double its forecast loss of $481 million.
Dore warned that the poor underwriting position of NI “is a real risk to the NI’s sustainability”.