icare insights — Management of claims related expenses

This data provided by our independent actuaries, Finity, shows claims related expenses trends in the Nominal Insurer Scheme.

Focus on effective application of claims related expenses

This insight is from the latest quarterly report provided by our independent actuaries, Finity, on key measures and data used by icare to monitor the operation of the Nominal Insurer Scheme.

icare has made progress ensuring claims related expenses within the Scheme are applied appropriately and provide value for money after several years of increasing costs. The latest data on workplace accidents in NSW shows a 10 per cent fall in 2018 for occupational rehabilitation payments made within five years of an accident (see Figure 1).

In addition, the Finity Quarterly Monitoring report shows that during 2018 rehabilitation payments made within one year of accident were significantly lower than previous years, resembling 2014 levels. The report states that ‘there has been more training for claims managers in how to use occupational rehabilitation more effectively. This appears to have led to fewer claims receiving rehabilitation.’

Rehabilitation payments within five years of accident – by payment type in millions of dollars by quarter from 2014 to end 2018
Figure 1 — Rehabilitation payments within five years of accident — by payment type

The report notes that in 2018 occupational rehabilitation reduced by more than 60 per cent in claims with less than one month off work. For claims that had between 1-3 months off work, the number receiving rehabilitation reduced by more than 50 per cent (see Figure 1).

The analysis also shows the average size of rehabilitation payments fell in 2018 for those claims receiving a weekly benefit for more than 3 months (see Figure 2).

Number of claims receiving a rehab payment by accident quarter 2017/2018 and by length of time off work
Figure 2 — Number of claims receiving a rehab payment

The Finity Quarterly Monitoring report also shows legal payments have been lower across the five quarters from December 2017 to the end of 2018, with the most notable fall relating to disputes for weekly benefits with a duration greater than 12 weeks (see Figure 3).

Insurer legal payments within five years of accident by payment quarter from 2015 to 2018 split by type of legal costs.
Figure 3 — Insurer legal payments within five years of accident