The nominal insurer workers’ compensation scheme is in the process of undergoing a notable change in premium rates for the 2023-24 financial year, with businesses experiencing an average increase of 8% to their premiums. Consequently, premium rates are shifting from the existing 1.48% of wages to 1.60% of wages.
Each industry carries its own inherent risk levels, prompting i-care to determine premium rates based on the respective safety performance of the past five years. While the scheme’s average increase stands at 8% for 2023-24, individual businesses will witness varied adjustments, with some experiencing increases below the average and others facing greater adjustments.
A significant shift in incentive structures accompanies these changes, as the Employer Safety Incentive (ESI) makes way for the Safe Employer Reward (SER). Previously, employers enjoyed a 7.5% discount on the Base Tariff Premium (BTP). The newly introduced SER for 23/24 is a performance-based reward system applicable to policies calculated under the conventional premium formula method.
Small employers with a minimum of three years of policy history, devoid of weekly benefit claims costs or catastrophic claim charges in the 36 months leading to policy renewal, will benefit from an SER premium reduction of 7.5% multiplied by the Average Premium Paid (APP) at renewal.
Experience-rated employers, also requiring a minimum of three years of policy history, a Claims Performance Rate (CPR) below 100%, and no catastrophic claim charges in the same timeframe, will similarly receive an SER premium reduction at renewal. The reward percentage rate is determined on a sliding scale based on the Employers CPR:
- From 0% to less than 20% CPR: 7.50% SER
- From 20% to less than 50% CPR: 5.00% SER
- From 50% to less than 100% CPR: 2.50% SER
- 100% or greater CPR: 0% SER
Additionally, a Claims Performance Adjustment (CPA) table of rates has been extended to 600% or more.
In light of the notable shifts in experience ratings within the workers’ compensation landscape in New South Wales, it is imperative for employers to forge partnerships with brokers who possess specialized knowledge in this domain. Understanding the intricacies of how premiums are calculated and adopting best practice strategies for effective claims management has become paramount.
Emjay Insurance Brokers offer comprehensive and expert management of both workers compensation premiums and claims. Contact our Workers Compensation team directly by reaching out to craig@emjayib.com.au or dan@emjayib.com.au, alternatively visit our website to learn more www.emjayib.com.au.