Premium updates for 2019-2020

Summary of changes made to premiums for the 2019-20 year.

  1. Changes to Employer Safety Incentive (ESI)

    We’re operating in an environment of rising insurance costs generally. The cost of private medical insurance, for example, has increased by an average of 4% each year over the past five years. This is well above the rate of inflation.

    In particular, individual medical costs have increased nationally over the past three years, with hospital and surgery costs increasing by some 25%.

    In addition to this super inflation on medical expenses, the scheme has been under the pressure of low investment returns leading into the pricing cycle. Despite these cost pressures, icare has been able to minimise the impact on workers insurance premiums.

    icare is proud to have been able to absorb these costs over the past five years. However, the growing pressures of medical inflation have meant we’ve needed to make some changes to workers insurance incentives to ensure the scheme remains financially sustainable in the years ahead.

    In considering the premium model for the 2019-20 policy year, we’ve been able to maintain an Employer Safety Incentive (ESI) with all employers entitled to a discount of 7.5%. This is $190 million icare is pleased to invest to help NSW businesses keep their people and workplaces safe.

  2. Scheme Performance Measure (SPM)

    Over the past 24 months icare has consolidated claims management from five scheme agents to predominantly one. The aligning of these claims may have had a small one-off impact to the claims cost used to calculate experience-rated employer premiums. To make allowances the SPM has been increased to 4.3%. Increasing the SPM reduces any adverse premium impact resulting from the claims consolidation process.

    The rates for employers with a policy for less than 36 months are as follows:

    24 to < 36 months - 3.32%

    12 to < 24 months - 2.42%

    < 12 months - 0.00%


  3. Increase in Loss Prevention and Recovery (LPR) factors

    There has been a change in LPR rates for the 2019-20 policy year. We’ve endeavoured to keep LPR rates as low as possible over recent years, however to ensure we’re able to continue to offer this product we’ve had to gradually increase them. Details of the LPR rates are as follows:

    Adjustment point Large claim limit and adjustment factors
    $350,000 $500,000
    24 months 2.61 2.49
    36 months 2.24 2.11
    48 months 2.24 2.11
  4. Changes to Return To Work Incentive (RTWI)
    The claims RTWI is no longer applied to small employers' claims, however they will still retain their Employer Safety Incentive.
  5. Cap on premium changes

    There will be a 30% cap on experience premium changes for employers.

    The cap is only applied if the increase or decrease results from a change in your claims experience, or due to amendments in the premium methodology. If you qualify for capping this has been automatically applied to your premium.

  6. Adaptive Maximum Premium Component

    In 2019/20 an adaptive maximum premium component will be applied to employers who have consistently high claims costs year-on-year.

    Employers that have had a claims performance rate (CPR) of 400% and above for more than one year will have an increased claims performance adjustment (CPA) rate.

  7. Changes to Workers Compensation Industry Classification (WIC) rates
    Each year WIC rates are revised in line with an industry’s performance. However, the average premium rate for NSW remains unchanged at 1.4% of wages. WIC changes for 2019-20 are as follows:

    234 WICs have had a decrease in WIC rate.

    271 WICs have had an increase.

    33 WICs remain unchanged.

    Find out more about current and historical WICs and premium rates.

  8. Catastrophic Claims Contribution

    Fatality claims will no longer be included in the claims experience for your premium. However, your business may be required to pay a one-off contribution amount if a claim is made in relation to a workplace incident or injury if it results in the death of your worker. 

    The contribution is based on a percentage of your Employers Average Performance Premium (APP) and is capped at a $1,000 minimum and a $250,000 maximum. 

    The contribution does not apply to uninsured employers with an uninsured liability scheme (UILS) claim, Loss, Prevention and Recovery (LPR) employers and exempt employers.

    This change became effective on 30 June 2018 and will apply to any fatality claims made on or after this date.

  9. Premium Reviews
    icare will conduct a review of your premium at your request. Refer to Premium reviews for more information on the process and what to expect from your premium review.
  10. Mine Safety Fund Premium Adjustment
    The MSFPA for 2019-20 is 1.0131%, down from 1.0879%. 
  11. Changes to Consumer Price Index Applied to Wages

    The CPI increase applied to wages for all employers has been amended from 2% to 1.8%.

  12. Late Payment Fee

    The Late Payment Fee remains at 0.808%.

  13. Claims excess

    The maximum excess amount recoverable from an employer is increased to $2,145.30

  14. Exclusion from wages of motor vehicle and accommodation allowances
    The motor vehicle allowance increased to 68 cents per kilometre. The accommodation allowance has increased to $278.05.
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