A number of high cost injuries resulted in surging workers compensation premiums for a large New South Wales labour hire business when workers failed to return to work either for the original host employer or at head office.
Through analysis of previous costs and adopting a new approach to managing claims the Gallagher Workplace Risk specialism succeeded in enabling the business to regain control over its workers compensation expenditure.
The premium rate had been increasing at the maximum rate of 30% year-on-year — the maximum premium can increase due to claims costs incurred — severely impacting the business's profit margins.
Gallagher Workplace Risk completed a preliminary review and determined that workers compensation premium would be raised again for a further policy period, based on costs already incurred.
Even if there wasn't a single new workplace injury there was no way to avoid an increase for the new financial year but there was an opportunity to make a positive impact on future premium costs if new claims were managed well while the older legacy claims cycled out of premium sensitivity.
Essentially the business needed to decide between investing now for a return in 18 months' time or continue to budget for steep workers compensation premiums and hope that they can be passed on to host employers.
Upon appointment Gallagher partnered with the business's return to work coordinator to reassess some of the legacy claimants and to redevelop the systems and processes in place to manage any new workplace injuries.
Specific approaches taken to improve the workers compensation risk and cost management included:
The Gallagher Workplace Risk expertise and partnership with this client over two years achieved a positive trend in the business's workers compensation premium spend, despite industry rate increases.
Further reductions are forecast as injured workers return to work more quickly, which leads to reduced claims costs.
The business's workforce and host employers are also more educated about the benefits of early return to work and recovery at work, while the stakeholders are working to support injured workers and to control insurance spend.
Workplace risk and mitigation is a specialty area that Gallagher provides to businesses Australia wide, and globally. For consultation, advice or solutions, we're here to help.
Our Workplace Risk team offers everything from safety mentoring and training through to health and wellness programs, hazard and risk profiling, and incident management and investigation for larger companies.
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