The revamped WorkCover NSW (icare) continues to make changes to the running of the Workers’ Compensation Scheme in NSW.
icare (Insurance & Care NSW) have already begun taking over the administration of premium in NSW, from April 30 both the inception and renewal of all policies has been administered directly by icare with no Insurance Agent involvement. This move by icare may have partially influenced CGU’s decision to withdraw from the NSW market effective 31 December 2017.
In addition to the above, icare has recently announced that as of 1 January 2018, all new claims will be administered solely by EML, with QBE exiting the scheme and Allianz and GIO managing the run off of existing claims. Speculation is that somewhere in the next 3 to 5 years icare will bring claims management in house in an approach similar to that of WorkCover Queensland.
If this is true, it will significantly impact the prospect of a privatised scheme in the NSW market. All eyes will now turn to South Australia who privatised their Compulsory Third Party (CTP) insurance on the 1st of July 2016. Once the benefits to the state of privatising CTP are evidenced it is hoped that the South Australian Government will provide equal consideration to the privatisation of Workers’ Compensation.
Studies over the last 10 years have consistently identified the benefits to the economy if state based Workers’ Compensation schemes are privatised. Given this, the ability of the private sector to deliver better outcomes and the benefits to employers provided by competition in the insurance market, it is difficult to understand icare’s recent changes and any resistance in South Australia to mirroring the privatisation of their CTP insurance.
For more information about icare, please see https://www.icare.nsw.gov.au/.