By now most employers in NSW would have received their Workers Insurance Premium renewal packs for 2024/25. Premium rates continue to increase in line with the statutory direction set by NSW Minister Sophie Cotsis in 2023/24, capped at an average scheme rate increase of 8% annually over a three-year period from 2023/24 to 2025/26.

What does this mean for the Automotive Industry?

Motor Trades Care (MTC) emphasises the critical importance for automotive businesses to update their Work Health and Safety (WHS) strategies. To help reduce the effect of rising premiums, it is essential for businesses to enhance their WHS knowledge, adopt effective injury prevention measures and manage any injuries and workers compensation claims efficiently.

NSW Workers Insurance Classification’s (WIC) are reviewed annually and adjusted based on the safety performance and inherent risk of each industry sector. While some WIC’s will experience a hike below the 8% scheme average, others will face a steeper rise.

Refer below to the Summary Table of 2024/25 Rate Changes for the Automotive Industry including MTA NSW members.

How can the MTC help you?

As premium rates are expected to rise  across Australian States and Territories over the coming years, optimising your WHS practices can be a strategic way to manage costs. MTC specialises in WHS and Workers Insurance consulting services specifically for the automotive sector, offering essential education, services, and support in these areas.

If you need help to mitigate risks and minimise the impacts of premium rates increases, including enhancing your WHS practices, managing Workers Compensation claims, and providing effective return-to-work (RTW) services, contact MTC at 1300 006 826 or enquire here.

Key Changes for 2024/25:

  • Minimum insurance premium will jump from $175 to $225.
  • Rate increases for 17 of 24 Automotive Industry related WIC’s exceeded the scheme average rate rise of 8% (71%).
  • 30% wage loading at renewal for policies with outstanding wage declarations, has been extended to ALL policies (except LPR policies)
  • Loss Prevention & Recovery Plus (LPR Plus), targeting the largest employers within the Nominal Insurer scheme – see other resources and links for information

Why the Rate Increases

The number of workers compensation claims, as well as claims costs, have been increasing for several years. In the 2022 financial year the workers’ insurance claims liability climbed to $3.9 billion and increased to an estimated $4.4 billion for the 2023 financial year.

The key factors driving the increasing costs and the subsequent need to raise the premiums are reported to be:

  • increasing claims numbers and costs, both physical and psychological
  • more people seriously injured, who at the end of their claim have higher levels of impairment, worker injury damages, longer weekly and medical compensation.
  • medical treatment costs have been rising more than the average rate of inflation (high medical inflation). This increase is across all claim’s costs.
  • nominal insurers (icare) resourcing and obligation to manage and fund the scheme effectively.

Summary Table of 2024/25 Rate Changes for the Automotive Industry

Note: MTC has estimated the 25/26 Rates based on the 24/25 rate increase percentages.

Important Notes

Average Performance Premium (APP)

  • If your annual wages remain unchanged from 2023/24 or increased, you should see a higher Average Performance Premium (APP) in your 2024/25 renewal.
  • APP is the starting point for all premium calculations and is calculated as Annual Wages x WIC rate
  • If you are an experience rated policy holder (APP of >$30k) your claims performance adjustment can have an impact on the final premium payable

How can you navigate the impact of these changes?

  • Review your Work Health and Safety (WHS) practices and implement actions to sure all reasonable steps have been taken to prevent workplace injuries. Need help? Start your injury prevention journey by completing the MTC’s Safety Self-assessment (Free)
  • Safe Employer Reward (SER) discount will be applied to a maximum of 7.5% of your APP when you protect your workers from injuries and do not have any claims with weekly benefits or a catastrophic claim for a period of 36 months prior to renewal.
  • Avoid paying claim excess by notifying icare claims service provider within 48 hours of becoming aware of a work-related injury or illness. The excess amount is equal to the first week of weekly compensation.
  • Implement a sustainable Return to Work (RTW) Program to manage injuries effectively, via knowledgeable support from an accredited RTW Coordinator. For workers insurance claims, a return-to-work incentive discount (5, 10, or 15%) is applied to each claim achieving sustainable return to work within 52 weeks of injury. Higher discounts are available for quicker returns.
  • Paying your renewal premium in full by the due date, a discount is applicable. The discount is based on your initial premium payable and will not be adjusted as part of the hindsight premium calculation process, or if wage estimates are adjusted mid-term.
    • Small employers (5% discount)
    • Experience-rated employers (3% discount)
  • 30% wage loading will apply to any renewal calculation where the employer has outstanding wage declarations for expired policy periods. Outstanding wage declarations can be updated using icare’s self-service
  • All policy related refunds will be actioned via electronic funds transfer, as icare no longer send refund cheques. If you don’t provide bank details, any refunds will not be issued.

Small Employers:

  • Small Employer policy holders (APP <$30k) claims performance does not directly impact premium, but eligibility for the Safe Employer Reward (SER) may be affected and premiums are still adjusted based on WIC rates and overall claims performance of the scheme.
  • If your 2023/24 APP was very close to $30k and your wages have remained unchanged or increased for 2024/25, a WIC rate increase could move your APP above $30k and you would be reclassified as an Experience Rated Employer. This means that the last 3 years of individual claims performance may have a direct impact on your premium payable (up/down). Should you anticipate a shift to experience rating, contact MTC – 1300 006 826 or enquire here

Experience rated Employers:

  • Experience rated policy holder (APP >$30k) claims performance adjustment can have an impact on the final premium payable.
  • Claims Performance Adjustment (CPA) rates for the 2024/25 policy year are used to adjust an experience-rated employer’s premium based on their claims performance relative to the overall claims performance of the Workers Compensation Insurance Scheme
  • Employers with better-than-average claims performance receive a discount on their premiums, while those with worse-than-average performance may face a higher premium. This system incentivises employers to maintain safe workplaces and manage claims effectively.

If you need help to mitigate risks and minimise the impacts of premium rates increases, including enhancing your WHS practices, managing Workers Compensation claims, and providing effective return-to-work (RTW) services, contact MTC at 1300 006 826 or enquire here

Other resources and links: