Privatisation of state personal injury schemes could boost economic productivity by billions of dollars, modelling commissioned by Suncorp shows.

NSW workers’ compensation scheme privatisation alone would deliver real gross state product benefits of $3.07 billion over 10 years, according to case studies from PricewaterhouseCoopers (PWC). “Gross state product” is a measure of the market value of goods and services produced in the state.

The research also identifies gross state product benefits of $838 million if SA privatised its workers’ compensation and compulsory third party (CTP) schemes.

Suncorp says potential benefits could reach $6-$12 billion over the next decade if the findings are extrapolated across Australia.

The analysis features in the company’s submission to the Competition Policy Review and in a Suncorp Insurance Insights paper.

Suncorp Commercial Insurance EGM Statutory Portfolio Chris McHugh says privatising workers’ compensation and CTP schemes could increase productivity, generate employment and improve return-to-work rates.

“It is difficult to justify maintaining state-owned monopolies when the private sector can deliver better outcomes,” he says.

Annual premium across personal injury schemes totals about $15 billion, including about $5 billion underwritten by the private sector, which provides cover in eight of the 19 schemes.

PWC found privatising the SA workers’ compensation scheme could bring gross state product benefits of $530 million over 10 years, while the CTP benefit is estimated at $308 million.

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