WorkSafe Victoria says employers’ average premiums are at a record low 1.298% of wages for the current financial year after claims fell to 10.17 per 1000 workers in 2011/12.

For the previous two years the premium rate was 1.338% of wages.

WorkSafe’s insurance operations returned $385 million for the year to June 30, up from $294 million in 2010/11. The result was aided by an actuarial release of $182 million, the eleventh consecutive contribution from reserves.

But the bottom-line figure was a $676 million loss because of negative investment valuations of $1.07 billion, mainly caused by falling interest rates.

Acting CEO Ian Forsyth says the investment performance does not detract from the strong insurance result. “When you look through those external factors, the underlying fundamentals of the scheme are very strong.”

The funding ratio improved to 96% from 108% and is within the preferred range of 85% to 115%.

The State Government took its first dividend from WorkSafe during the year – claiming $147 million, or 50% of the 2010/11 insurance operational surplus of $294 million.

Using that formula WorkSafe would pay a $192.5 million dividend in the current financial year. But Chairman David Krasnostein says the State Treasurer will consult with the board before determining the sum.

Premium income for the year was $1.87 billion, up from $1.8 billion in 2010/11, and net assets were $688 million, down from $1.51 billion. Investment returns fell to 4.1% from 11.79%.

Mr Forsyth says the authority’s performance “is particularly pleasing at a time when many other schemes are facing considerable financial pressure and have either increased premiums or made changes to their benefit structure”.

Mr Forsyth became acting CEO when Greg Tweedly retired in July.