Insurers dumped from the Victorian workers’ compensation system two weeks ago are having to deal with the repercussions in complete silence – no grumbles to the media or anyone else are allowed. Under the agreement the insurers signed with the state’s WorkCover Authority, they are not permitted to discuss what happened in the negotiations, or talk about… well, anything.

The insurers who missed out are extremely annoyed and confused by a process so obsessively secret that no one even knows why they got the push or why they were accepted. Five insurers – Royal & SunAlliance, Zurich, GIO, Catholic Church and Guild – were sent packing, while Allianz, CGU, NRMA Insurance, QBE Mercantile Mutual and brokers Jardine Lloyd Thomson survived. The newcomers are loss adjusters Wyatt Gallagher Bassett and Cambridge Australia, which is owned by Aon.

It appears none of the dumped insurers yet knows why they were cut out of the action (although they can’t tell us that they don’t know), and it’s understood they will probably never know. There is plenty of speculation that some of the bureaucrats involved in the licensing simply want to dilute the influence of insurance companies in the Victorian workers’ compensation market.

The only contact the unsuccessful insurers had with the authority was a very brief meeting in which they were told they were out. No reasons were given, and it’s understood none will be provided. Thousands of policyholders are aware only that their “agent” is to be changed, with the clients of dumped insurers being allocated to the new entrants.

Accounts will be administered until the close of business on June 30, at which point affected accounts will be passed to the new agents they have been allocated. One insurer said: “How do they expect anyone to just pick up a massive amount of business and continue on with files they know nothing about?”  Sorry, can’t tell you that.

One of the successful new agents, Cambridge, is owned by Aon. Some larger Victorian brokers are unhappy that their clients will be forced to deal with another broker-owned operation with a massive number of services to offer. “The cross-selling possibilities for Aon could be irresistible,” one broker said. “We’re not going to put our corporate clients into a company that might have an interest in cutting us out of the action.”  The presence of JLT, which offers less complementary services, seems not to have attracted the same attention.

Industry sources in Melbourne suggest there will be a lot of “churning” of accounts over the next few months as brokers divert their clients into other non-Aon agencies. “Cambridge is supposed to pick up 15% of the market,” said an insurer, who can’t be named for obvious reasons. “By the time they get to settle down their accounts, the figure will be a lot lower than that.”