A continued decline in bond yields and a rise in the number of claims are hardening the market for workers’ compensation insurance, Suncorp says.

“Insurers need to review their portfolios and seek appropriate price increases on high loss-ratio employers,” Chief Workers’ Compensation Underwriting and Portfolio Manager Jason Allison told insuranceNEWS.com.au.

“In WA, WorkCover increased the Gazette rates by 7.8% to reflect the impact of increasing claims frequency, reduced investment returns driven by bond yields and the increase in access to benefits in line with the federal extension to retirement age.”

Mr Allison says the average cost of claims in the resources sector is also affected by wage inflation and remote working environments where fly in/fly out is needed, “especially with access to treatment and manual work requiring higher levels of work capacity”.

“The insurance industry needs to have appropriate pricing and terms in place to ensure it can continue to provide sustainable cover,” he said.