In this update, we share practical insurance insights from the quarter that’s been, and forecasts for the quarter ahead.
KEY TAKEAWAYS FROM FY21: Q2?
2020 showed us that change can come literally overnight and that as individuals and businesses, we need to be adaptable and resilient. In the context of workers’ compensation, something that has not changed is our continued responsibility to provide a safe work environment for our people. The widespread shift to remote working arrangements for many businesses created the potential for new risk exposures, while legislative changes were introduced under certain workers’ compensation schemes in response to COVID-19.
Safe Work Australia’s recent COVID-19 report revealed as at 31 July 2020, there were at least 533 COVID-19 related workers’ compensation claims nationally. Of these claims lodged by 31 July 2020:
- 38% were for workers who contracted COVID-19.
- 34% related to mental health impacts associated with the pandemic.
- 29% involved testing or isolation requirements (some workers’ compensation schemes covered the costs of isolation arrangements and COVID-19 medical tests).
Claim numbers are expected to rise in response to Victoria’s second wave of infections that peaked in August 2020.
It has never been more important for businesses to understand their risk exposures, and ensure their processes, policies, and procedures remain relevant and responsive to the changing situation.
KEY CONSIDERATIONS FOR FY21: Q3?
CGU’s withdrawal from the Victorian Workers’ Compensation scheme was a big surprise for all. The transition plan is not yet finalised, with CGU’s existing contract with Worksafe valid until 30 June 2021, however, there has been discussion of this being brought forward to expire on 31 March 2021. A policy transfer freeze was implemented by CGU following the impact of COVID-19 and due to end on 31 December 2021. It has been indicated that a policy transfer freeze will be extended until 30 September 2021.
With allocation of the CGU book of business yet to be confirmed, it is anticipated that businesses will be permitted to put forward a submission for their preferred Agent once CGU finalise their tenure.
NSW icare has announced the appointment of Richard Harding as CEO and Managing Director. This will be an area to watch as Harding seeks to navigate the NSW scheme back from the challenges of 2020.
NSW icare has also announced the appointment of their legal panel for workers’ compensation claims, which means the scheme has now removed the option for Employers’ “client preferred” Solicitors. This will have a big impact for any Lawyers and Clients who relied on these long-standing relationships. A transition arrangement is in place with the new panel coming into full effect from 30 June 2021.
WHAT INDUSTRY TRENDS SHOULD CLIENTS MONITOR OVER THE COMING QUARTER?
With JobKeeper and JobSeeker payments due to end (on March 28 and March 31, respectively) and many businesses still being impacted by COVID-19 restrictions, there continues to be uncertainty around job security and income security. The reality is that many people will seek alternate options to close these gaps, and spikes in workers’ compensation claims are expected to continue.
To demonstrate your commitment to employee safety and wellbeing, we encourage businesses to continue communicating with staff about changes to Government subsidies and resulting impact to the business and your staff.
We’re With You All The Way
Feel free to reach out to discuss your risk exposures. We are here to help you ensure your processes, policies, and procedures reflect your evolving needs.
Head of Risk Consulting
Find out more about Honan Workplace Risk Consulting.