WorkSafe Victoria returned to profit in the six months to December 31, as workplace injuries fell to a record low.

It has reported an after-tax profit of $487 million, compared with a loss of $641 million in the previous corresponding period, when it was beset by poor investment returns.

But performance from insurance operations (PFIO) – which strips out investment market volatility and inflation – was $13 million, down from $118 million.

CEO Denise Cosgrove says PFIO is the most insightful measure of the workers’ compensation scheme’s performance because it focuses on factors management can control, such as operational costs and claims management.

“We’ve recorded a performance from insurance operations of $13 million, indicating that management of the scheme remains on a sound footing,” she said.

PFIO fell because of a 3% premium rate reduction for 2012/13 and a dip in investment income credit due to a lower credit rate, a WorkSafe spokesman told insuranceNEWS.com.au.

The scheme also incurred higher claims, partly due to a lower actuarial release.

Victoria has the lowest average premium of all states, at 1.298% of wages.

Ms Cosgrove says the after-tax result was aided by stronger-than-forecast investment returns, driven by more favourable markets, and inflation remaining below expectations.

Victoria recorded a record low injury rate of 7.99 claims per million hours worked, down from 8.08 at June 30 last year.

Ms Cosgrove says the actuarial valuation of the scheme led to an $11 million increase in projected liabilities.

“We consider this result to be broadly neutral due to the combined impact of some largely offsetting movements in liabilities, such as common law and weekly benefits,” she said.