Catholic Church Insurance (CCI) will cease offering workers’ compensation cover from late next month, while warning separately of the need for an injection of capital.  

CCI says no new or renewal workers’ compensation business will be written after June 29, but it will continue to honour and manage existing claims or any new claims for current or in-force policies. 

“We acknowledge with deep regret that this will result in a loss of employment for a number of CCI staff. They have been advised of the decision,” Chairman Joan Fitzpatrick said. 

“The closure of our workers’ compensation division to new business and renewals reflects the significant financial challenges CCI continues to experience across this line of business.” 

In a separate statement CCI said on Friday that it is discussing with shareholders the closure of new and renewal general insurance business in the absence of a significant injection of additional capital. 

“Our shareholders have already made a significant contribution to the equity of the organisation in recent times, and we expect to know very soon how we will proceed,” Ms Fitzpatrick said. 

“If CCI is unable to raise the required capital it will continue to operate for some years while current assets are used to fund operations, settle all known insurance claims, and any new claims that are made against existing policies which remain in-force. 

“CCI is solvent at this time and able to pay staff, suppliers and claims, and without additional capital is in a position to be right sized in an orderly fashion for the many years it would take to resolve all known and as yet unknown claims.” 

Further announcements will be made once discussions with shareholders have been finalised, it says. 

CCI had no further comment when contacted by insuranceNEWS.com.au today.  

The previous annual report for the financial year ended June 30 2022 highlighted the challenges arising for the insurer from abuse claims, which it refers to as professional standards claims. 

“We cannot underestimate the significant task of responding to professional standards claims,” Ms Fitzpatrick said in the report. “These claims continue to flow.” 

Actions taken have included negotiating retrospective deductibles with certain policyholders on professional standards policies held, and the initiation of a reinsurance contract for adverse development on a portion of policies. 

Notes to the financials say that whilst CCI maintained a strong balance sheet, the significant increase in reserves for professional standards claims had seen a substantial decrease in its regulatory capital during recent years, and it sat outside the CCI target capital range. 

Several capital strengthening activities had been undertaken and further options continued to be actively explored with shareholders and other key stakeholders, the report says. 

The annual report shows CCI gross written premium of $346 million, while the group reported a profit of $867,000 compared to a loss of $192.3 million a year earlier.