Large NSW companies have been hit with major delays in their workers comp premium renewal process, stoking fears about budget pressures.
NSW WorkCover reforms to processing procedures introduced this year have caused delays in premium reporting, with renewals yet to be received by many large businesses.
An Insurance & Care NSW (a new government organisation also known as icare) spokesperson says that the mid-year renewal cycle was delayed as a result of insurers’ systems not being ready.
“The June renewal cycle for experience rated employers was delayed by one month as insurers’ systems were not in a validated and ready state to start processing accurately for all renewals,” he says.
“The June renewal cycle has been extended by one calendar month with renewals to be complete by 31 October.”
RiskNet’s Richard Gilley says the changes were a complete overhaul.
“Insurers all had to reprogram their systems to be able to pick up data accurately. There was a massive amount of testing that had to be done by insurers before there was any confidence that the premium calculations that they would be putting out would be accurate.”
Gilley says an embargo on premium submissions during the middle of the year has left insurers little time to prepare, creating a delay in premium renewals being provided to companies.
“You can’t do this sort of stuff in a week. There is a lot of extra time to be taken to push out these new premium notices,” he says.
The delay in premium renewals is expected to cause significant financial problems for many companies awaiting notice. Gilley says that this issue is worsened by the expected rise in premiums.
“Most companies will have closed their books off for last year, and some of them are facing significant extra premiums. They probably haven’t accrued for those,” Gilley says.
“They may not have any idea what they are going to be. It’s going to cause a lot of financial hardship. Nobody knows yet what the extent of that is going to be.”
“Every insurer I talk to says, ‘it’s really ugly’. There are going to be some shockers,” he says.