icare faces cost-cutting mandate following operational efficiency review
icare faces cost-cutting mandate following operational efficiency review | Insurance Business Australia
Life & Health
icare faces cost-cutting mandate following operational efficiency review
Report outlines challenges facing the organisation
Life & Health
By
Roxanne Libatique
The New South Wales Treasury has released a report evaluating Insurance and Care NSW’s (icare) operational expenditure, aiming for a permanent reduction of 5% in its net service costs from the 2024-25 fiscal year onwards.
The review was directed by Sophie Cotsis, the NSW minister for Work Health and Safety, and outlined 14 findings aimed at improving transparency, accountability, and the state’s oversight of icare’s performance.
However, the review indicated that careful management is required to avoid duplication of efforts and ensure the full benefits of these investments are realised.
The findings also called for better clarity and continuity in measuring icare’s impact on the overall performance of NSW’s insurance schemes and their long-term financial sustainability. To address this, the report recommended that NSW Treasury, icare, and the State Insurance Regulatory Authority (SIRA) collaborate more closely to enhance performance oversight and ensure value for money.
These findings follow a separate report from Promontory in July, which noted significant improvements in icare’s governance and accountability measures.
“icare will continue to work to realise cost savings and efficiencies, including those sought by Treasury, while delivering the care and support that injured workers, business owners, and the government agencies of NSW rely on us for,” the spokesperson said.
The spokesperson also noted that icare’s internal reviews have already identified measures that are expected to reduce ongoing operating expenses by over 5%.
These miscalculations resulted in underpayments to around 6% of the 5,000 people currently enrolled in the scheme.
icare issued a public apology for the mistakes and committed to resolving the issue promptly. The organisation is in the process of contacting affected participants to inform them of the payments owed, with plans to complete the outstanding payments by December.
icare is also implementing new IT systems, including a case management platform, to enhance payment accuracy and avoid similar errors in the future.
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