Workers’ comp schemes are struggling, can this offering help?

“I think our fear is that we know that costs are increasing across workers’ compensation schemes,” said Sydney-based Andrew Jamieson (pictured above), the manager of Bellrock’s new service. “For most employers, workers’ comp premium is either their largest premium spend or in their top handful.”

Are workers’ comp schemes at breaking point?

Jamieson has a decade of experience in workplace risk. He gave an example of how workers’ comp costs, already sharply rising, could be at crisis point for icare, the agency managing the NSW scheme.

“There was a leaked Treasury briefing in New South Wales that was reported at the end of last year,” he said. “It advised that the NSW scheme was in trouble and would need to increase premium by approximately $1 billion by 2025.”

The leaked details of the report were published in the Sydney Morning Herald in November and outlined the increase amounts to a 33% rise in premiums.

If accurate, Jamieson said employers need to be mindful of how they can deal with this impending “enormous” increase. However, the Bellrock broker also said that the workers’ comp space is long overdue attention from many businesses in terms of risk management and costs control.

There are other reasons that businesses should focus attention on this area, he suggested.

“There probably isn’t a person in Australia, that isn’t stressed in their job at the moment,” said Jamieson. “Potentially, that could lead to a claim, whether it’s reasonable or not.”

Helping small business with workplace risks

His firm’s new offering, he said, is about giving small businesses the tools to deal with “a whole lot of visible and invisible risks.”

Jamieson said, historically, this sort of workplace risk management service was “largely inaccessible to small and medium sized employers” because of cost.

He gave an example of how Bellrock’s works in practice.

“We’re currently working with an employer who’s had a small number of complex workers’ comp claims that have caused a significant increase in their premium and will now impact them for three years, which was unknown to them prior to having a discussion with us,” said Jamieson.

He said the problem likely arose from the insurer’s lack of transparency and also the business’s lack of understanding around workers’ comp.

“We’re currently working with them to resolve these claims while also considering the impact on their broader workforce and the resourcing requirements of the business and making these claims a priority,” said Jamieson.

Jamieson said these discussions also focus on finding possible savings and risk managing to bring premiums down as low as possible.

“Our mantra is all around advice, advocacy and education,” he said.

Not for the generalist broker

Jamieson said providing this advice-focused offering would be very difficult for a generalist broker.

“I strongly believe that in order to effectively and sustainably manage workers’ compensation and workplace risk for employers, being specialized in the area is imperative,” he said. “Workers’ comp is highly complex, it’s evolving, and on top of that every single state and territory in Australia operates under a different premium model and different legislation.”

He said brokers who want to play in this space would need to devote considerable time to learning about the sector.

“It requires almost full-time commitment,” he said. “Basically, just to keep across everything that’s happening across Australia because there’s just so many different ways of managing workers’ compensation.”

However, he suggested, small businesses would be wise to come to grips with their workplace safety challenges.

“More often than not, once workers’ compensation claims come through, it can be 100 times harder to mitigate and rectify some of these issues,” said Jamieson.

According to the federal government agency, Safe Work Australia, reducing work related injuries and illnesses could bring more than $28 billion in savings to the Australian economy. For the 2020-21 fiscal year, the agency reported more than 130,000 workers’ comp claims across the country.

How do you see workplace risk management evolving in the coming years? Please comment below.