If you’re a business operating in Victoria, you likely got quite the shock when you received your 2023-2024 workers compensation premium. Premium rate increases and changes to the capping rule have meant premium increases of 42% on average and, in some cases, up to 75% for those in higher risk industries with poor claims history.
The Victorian State Government say changes had to be made as funding its long term liabilities had become increasingly difficult, due partly to the sheer number of mental health related claims being made. With other jurisdiction experiencing similar increases in mental health related claims, the potential for further increases cannot be ruled out.
With Victorian increases locked in, and the potential for more around the Country, is now the time to consider the benefits of Self-insurance?
Self-Insurance isn’t for everyone, but if you’re an employer of suitable size and financial resources that takes your commitment to workplace safety seriously and has a history of good claims performance, Self-Insurance offers a pathway for significant cost savings.
It works by allowing an employer to bear the costs and risks of their own workers compensation claims, removing the need to purchase standard workers compensation insurance. It also provides direct incentives to improve injury prevention and rehabilitation performance. The more injuries prevented and the more quickly workers return to work the lower overall cost to a self-insurer.
Becoming self-insured isn’t as simple as tearing up this year’s worker compensation invoice. Only businesses that satisfy a series of evaluations are given permission to self-insure. It can be a complex journey, one that a trusted partner like Verus can assist you with, to ensure a viable and sustainable outcome. However, when businesses satisfy these requirements, becoming self-insured offers a range of benefits including:
- Cost Management: Employers who are self-insured have greater control over the management of claims and can design their workers' compensation program to suit their specific needs and potentially reduce the overall cost of the program.
- Improved WHS Performance: Self-insured employers generally have stronger safety systems and workers typically experience better health and safety conditions as improvements in safety performance and reductions in the frequency and seriousness of incidents can directly benefit an employer’s bottom line.
- Tailored Insurance: Self-insured employers have the ability to custom design their insurance coverage to meet the specific needs and risks of their workforce.
- Faster Claims: With greater oversight and control over the claims process, self-insured employers can generally improve claim handling and resolution times resulting in more effective support and better outcomes for injured workers.
- Improved Return-to-Work: Self-insurers who work diligently to return employees to work as soon as possible can reduce the cost associated with workplace injuries and illness, providing a direct incentive to have effective return to work systems and programs.
- Long-Term Savings: Self Insurers that can reduce workplace injuries and effectively manage claims when they occur will position themselves to achieve long-term savings in workers compensation costs.
If you think your organisation has what it takes to become self-insured, but aren’t sure how to start, Verus can provide advice and access to the kind of expertise you need. If you would like to discuss what it would take to become self-insured contact Verus to have an obligation free talk today.