icare has published the changes to workers insurance premium rates for 2022/2023. While every industry has its own inherent level of risk so icare applies a premium rate based on the safety performance of each industry over recent years. This year, half of all businesses will not see an increase in their industry classification rate, with some individual businesses even experiencing a premium increase greater than the scheme average.

What are the key changes?

The change will see the scheme average premium rate increase from 1.44% of wages to 1.48%, which represents a 2.9% premium rate increase across the scheme and is the same premium rate rise that was announced for the 2021/2022 financial year. Loss Prevention and Recovery (LPR) customers will also see a 2.9% average increase in the LPR claims adjustment factors, maintaining consistency of icare’s pricing strategy across all products.

Some WICs workers insurance premiums will also be marginally impacted by changes to the schedule one dust and diseases rate by the State Insurance Regulatory Authority (SIRA) to 2022/2023 premiums.

Other key changes to be aware of:

  1. The Wage Price Index [WPI] – icare will now base wage/premium projections on the WPI. The WPI measures changes in the price of labour and is more relevant for calculating wage increases. The WPI will be 2.6% for 2022-23. Previously icare used the Consumer Price Index [CPI] which measures inflation.
  2. Payment Options – icare has expanded the availability of monthly instalments. All policy holders with an annualised Average Performance Premium (APP) of $1,000 or more will have the monthly instalment option [whether the policy period is a full 12 months or is short termed].
  3. Late Payment Fees – icare will recommence the charging of late payment fees on outstanding premiums for policy periods effective from 30 June 2022. A rate of 0.647% will be charged.

What does this mean for the Automotive Industry in NSW?

There are 17 WICs that make up the automotive industry workers insurance portfolio in the NSW scheme. 53% of these WICs will have a premium rate increase in 2022/2023. The table below provides a summary of the rate changes for the industry.

In simple terms these WIC rate increases means:

  1. All policy holders impacted by WIC rate increases (assuming no change to wages) can expect a larger Average Performance Premium (APP), which is the starting point for all premium calculations.
  2. All policy holders impacted by WIC rate increases and an estimated wage increase for 2022/2023 can expect a an even larger APP increase.

If you are not sure what WIC(s) your policy is under you can find this information in your 2022/2023 workers insurance renewal pack or your 2021/2022 Certificate of Currency that would have been issued by icare.

IMPORTANT NOTES:

  • If you are an experience rated policy holder (APP of $30,000 or greater) your claims performance adjustment can have an impact on the final premium payable.
  • If you are a small employer policy holder (APP less than $30,000) with a current APP very close to $30k, a WIC rate increase could move your APP above $30k. This means that your individual claims performance will now have a direct impact on your premium payable (up/down).
  • Your premium can increase solely based on an increase in wages regardless of a WIC rate increase or your individual claims performance.

Table: Summary of Rate Changes for the Automotive Industry

One aspect of the change that is unlikely to have any material impact on the majority of Automotive WICs is the SIRA dust and diseases rate increase as it is highly unlikely that schedule one would apply to most business.

It is essential to keep in mind that there are other factors that that can influence your final premium payable. To better understand workers insurance and premium calculation factors, please read our article “Your workers insurance premium renewal demystified” here.

How can the MTC help you?

If you are unsure whether these changes will impact your business or are concerned about the possible impact of 2022/2023 Workers Insurance premium renewal, please contact us for assistance here.

Further information about 2022/2023 workers insurance premium changes can be found on the icare website here.

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