ACC New Zealand marks 50 years with rise in claims and financial deficit
ACC New Zealand marks 50 years with rise in claims and financial deficit | Insurance Business New Zealand
Life & Health
ACC New Zealand marks 50 years with rise in claims and financial deficit
Levy changes considered
Life & Health
By
Roxanne Libatique
The Accident Compensation Corporation (ACC) marked its 50th anniversary in April, releasing its annual report detailing an increase in claims and financial challenges.
According to the report, new injury claims grew by 3.6% from the previous year, while weekly compensation claims increased by 3.9%, reaching 165,000.
ACC New Zealand’s 50th anniversary
In its financial results for 2023/24, ACC reported a $7.2 billion deficit, primarily due to an increase in its outstanding claims liability (OCL), which represents the estimated lifetime costs of existing claims. The OCL grew by $8.7 billion, pushing the total liability to $60.2 billion.
Despite the recorded deficit, ACC assured the public that it remains capable of meeting its obligations to clients. However, the rise in the OCL points to increasing costs that may affect future funding.
Commenting on ACC New Zealand’s 50th anniversary, ACC board chair Dr Tracey Batten said the organisation was committed to supporting New Zealanders.
“The hard work and dedication of our people embodies ACC’s commitment to improving lives every day. It’s why we’ve been around for 50 years and why we will be here in the future,” she said.
How ACC New Zealand improves rehabilitation
ACC New Zealand chief executive Megan Main highlighted growing concerns about rehabilitation performance, stating that more injury claims require workers to take time off, with recovery periods lengthening.
“Improving rehabilitation performance is a priority for ACC, and a considerable amount of work has gone into addressing this challenge,” she said.
ACC’s investment fund, designed to help meet the future cost of claims, grew to $51.6 billion, delivering a 7.6% return before costs. This fund is critical to ensuring that the scheme can support long-term injuries without placing excessive financial burdens on levy payers.
In an effort to address rehabilitation challenges, ACC has implemented a three-year investment plan aimed at improving client outcomes. Key measures include:
the introduction of a more personalised case management system for low-complexity weekly compensation claims
the formation of a team dedicated to supporting long-term clients in their return to independence
Main noted that short-term recovery rates were beginning to show improvement.
“I’m confident the work in place will have a positive impact, and we’re already starting to see signs of improvement in our short-term client recovery rates,” she said.
ACC New Zealand’s injury prevention investments
ACC also continues to invest in injury prevention, dedicating $80 million in 2023/24 to a range of programs including RugbySmart, Ride Forever, and Farmstrong.
The goal of these programs is to reduce preventable injuries, which ACC research shows are a significant factor in overall claims.
ACC New Zealand’s levy consultation
In addition to its injury prevention efforts, ACC held a public consultation on levy rates from September to October.
The consultation attracted nearly 8,700 submissions, with most feedback focusing on proposed changes to motor vehicle and motorcycle levies.
A majority opposed the suggested increases, with 94% of respondents disagreeing with changes to the motor vehicle levy and 90% opposing higher contributions from motorcyclists. Other respondents raised concerns about the cost burden on small businesses and questioned the data ACC used to justify the proposed changes.
The feedback gathered will inform ACC’s final recommendations to the minister for ACC, with the government expected to make a decision on levy rates by November 2024. Any changes to the levy system will take effect in April 2025.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
