WorkCover SA has reported a $437 million loss for 2011/12, while unfunded liabilities have risen to $1.4 billion from $952 million the previous year.

The loss follows a $30.2 million profit in 2010/11. The scheme is currently 59.2% funded, down on last year’s 64.8%.

Chairman Philip Bentley says while the result is not unexpected in the current economic climate, it shows the need for recent reforms implemented by the board to improve performance.

However, he says it will take time for these changes to take hold. “WorkCover is a long-term scheme and we must keep a long-term perspective.”

Earlier this year WorkCover SA introduced an experience rating system for medium and large employers, to cut costs and stay competitive with other states’ workers’ compensation systems. It calculates premiums based on size, industry risk and claims experience and aims to give employers more financial incentive to prevent injury.

Mr Bentley says the reduction in claims liability through claims management in the past two years has been “disappointing” but it will be a focus for improvement.

“Front-end management of claims needs to improve and injured workers need to be encouraged by their claims manager and their employers to return to work sooner than they are currently,” he said.

The 2011/12 return-to-work rate of 77% – down from 80% the previous year – was the lowest of all states.

Some 42% of injured workers remained on compensation six to nine months after submitting claims – almost double the rate of some states and well above the national average of 25%.

WorkCover SA’s disappointing results follow the resignation of Rob Thomson as CEO last month, after about two years in the role.