Workers’ compensation is under the microscope in Britain as the Association of British Insurers begins a campaign for fundamental long-term reform. John Parker, the ABI’s Head of General Insurance, said the current system of workers’ comp in Britain is unsustainable.

“It is buckling under the strain of greater expectations about who should receive compensation and how much they should receive,” he said. “That is why there has been a 100% increase in the cost of employers’ liability claims in the past five years.”

Warning that workers’ comp premiums will become prohibitively expensive in the long term, he said an examination of how Britain’s “increasing expectations” can be paid for must be considered before the system breaks down.

The ABI is following the Australian insurers’ approach to workers’ compensation reform, emphasising that the interests of the injured person should be paramount. Greater emphasis on rehabilitation, greater clarity in the law, minimal legal fees, clarified lines of responsibility and more emphasis on workplace safety are at the top of the ABI’s wish list.

Mr Parker said firms facing the largest premium increases or having difficulty obtaining cover “are likely to be those with poor records. Firms with good health and safety records should expect to pay less towards the overall cost of compensation.”