Up to 150 jobs may be cut at Vero Insurance following its decision to exit the NSW and SA workers’ compensation schemes.

State workers’ compensation schemes imposing complicated rules on insurance companies – and downgrading their status as insurers – are understood to have led to the decision.

Reports suggest 100 claims jobs in Sydney and 50 in Adelaide will be cut.

WorkCover legislation in SA currently dictates most aspects of worker’s compensation insurance including the premium payable under a policy. NSW has similar provisions.

Under the system in Victoria and SA, private companies are contracted by WorkCover to act as claims agents, and NSW is about to go the same way.

Vero CEO Duncan West says the company will no longer underwrite workers’ compensation insurance in NSW or SA. It currently doesn’t have a licence in Victoria, and it now seems it won’t try too hard to access that market either. 

He says the review of both states’ workers’ compensation agency businesses found “a low level of strategic alignment to Vero’s specialist insurance model”.

“In SA and NSW we act as a licensee or agent on behalf of the government, so we handle claims on behalf of WorkCover,” he said. “But you’re using WorkCover’s money and you get a fee for handling the claims.

“We are underwriters, and strategically we have decided to focus our time, effort and resources on underwriting and that’s around the underwritten states on workers’ compensation in the ACT, WA and Tasmania,” he said.

Vero is currently arranging a transition plan to manage schemes in those states.