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ICA calls for claims competition in NSW workers' comp

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The Insurance Council of Australia (ICA) has urged greater competition in icare’s claims management, as an independent review into the NSW workers’ compensation scheme continues.

Submissions to the review have now been published, with a final report expected before the end of the year.

Workers’ compensation claims in NSW were previously handled by a panel of insurers, but last year EML became the sole claims manager for new claims.

ICA’s submission notes the scheme has “experienced combined underwriting losses for the 2017 and 2018 financial years of over $2 billion” and says competitive provision of claims management could improve performance and outcomes.

“It has been well documented that competition in well-designed injury insurance schemes can be beneficial,” the submission says.

“Therefore, going forward, the ICA would like to see competition in claims management restored in the scheme.”

ICA also emphasises the importance of clear and consistent data collection and reporting.

“Without this a meaningful and transparent measure of the scheme’s performance cannot be obtained, potentially undermining public confidence in the scheme as well as its agents and service providers.”

The National Insurance Brokers Association (NIBA) has also made a submission, but asked for it to be kept confidential.

When the review was announced, CEO Dallas Booth told NIBA members had previously raised issues with claims handling and other operations.

Mr Booth said NIBA’s submission would seek clarity around the overall financial performance of the scheme.

The NSW Business Chamber has been highly critical of the scheme. Its submission highlights a lack of transparency over the new premium-setting model, and continuing claims management concerns.

“For many employers the new claims management model has led to a noticeable deterioration in return to work outcomes,” it said.

icare CEO and MD John Nagle told feedback is welcome.

“We are supportive of the review of the NSW workers’ compensation system and icare, as part of our regulatory environment,” he said.

“As the state’s social insurer we strive to deliver better outcomes for the customers we serve and the communities we protect.

“As part of this review we welcome the feedback of our stakeholders via submissions and have already proactively engaged with some who had previously shared their submissions with us. We look forward to receiving the findings of the full report.”

Mr Nagle says more than $2 billion in costs has been saved since icare was created in 2015, enabling average premiums to remain stable.

“We acknowledge this comes with significant disruption which we have not always explained or executed on well,” he said.