Business NSW says icare must do more to improve its workers’ compensation scheme performance, with an increase in premiums next financial year to hit companies already struggling with inflationary pressures.

“Businesses cannot keep footing the bill for systemic inefficiencies, especially in relation to claims management,” a spokesman told insuranceNEWS.com.au. “Business NSW has been a vocal advocate of the need to get icare on a sustainable pathway and to stop future premium hikes.”

Workers’ compensation premiums in the state will increase by the maximum allowed 8% on average, icare said last week. Premiums for individual employers may vary from the average, with the final rate calculated according to industry, claims history, safety performance and other risk factors.

In April last year the government directed icare to limit average premium increases to 8% for three financial years after businesses protested about a potential 20% jump.

The additional revenue from the premium rise will help the nominal insurer scheme return to a break-even level of funding, following a period between 2012 and 2020 when average rates did not increase, icare says.

Business NSW says the rise announced last week will be a shock to employers operating in many industries, such as transport, construction and aged care.

It says it “would like to see icare being more proactive about poor return-to-work rates rather than being reactive and simply trying to recoup more money for the losses it incurs. We are now at the beginning of the second year of what is meant to be a three-year improvement program.”