Record safety performance delivers solid result

A record low rate of workplace injuries and ongoing improvements in scheme management have helped deliver a sound 2012/13 financial result for WorkSafe Victoria.
News article published

Friday 20 Sep 2013

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WorkSafe Chief Executive, Denise Cosgrove, said Victoria’s employers and employees had worked hard to reduce injury rates and, together with agents and WorkSafe staff, had helped create strong claims liability results.

“The number of claims per million hours worked fell to 7.53 as Victorian workplaces continued to improve their safety performances. That is a fall of 6.6 per cent on the previous year and once again confirmed Victoria as the safest state in which to work,” Ms Cosgrove said.

“Strong scheme management delivered improved performance from insurance operations (PFIO) of $119 million, underpinned by an actuarial release of $179 million. Both figures reflect the ongoing health of the scheme.”

Ms Cosgrove said Performance from Insurance Operations (PFIO) was the clearest measure of WorkSafe’s financial results because it stripped out all external factors such as global investment returns and interest rate changes, which can otherwise mask scheme performance.

“Our PFIO, which was $84 million above budget, gives us an accurate picture of how well costs and liabilities associated with the scheme have been managed,” she said.

Ms Cosgrove said the actuarial release had exceeded its target and reflected the efforts of those involved in helping injured workers get back to safe work sooner, and in managing other claim costs.

Ms Cosgrove said WorkSafe’s net result was $1.084 billion, which was significantly assisted by improved investment returns and changes to economic assumptions such as inflation and discount rates.

“In 2012/13, we paid almost $1.6 billion in compensation, treatment and rehabilitation benefits to injured Victorian workers,” she said.

“Taken as a whole, these results indicate that the scheme is in a sound financial position.”

Ms Cosgrove said Victoria’s average premium rate of 1.298 per cent remained the lowest in the state’s history and the lowest rate in the country. “This is a great outcome for all Victorian businesses which benefit from being part of a high quality scheme that keeps costs down.”

Ms Cosgrove said that while the results for 2012/13 were pleasing, WorkSafe has put in place a clear strategy to deal with the challenges of a changing socio-economic environment.

“Changing patterns and types of work, economic conditions, and an ageing workforce will increasingly affect workplace safety and return to work opportunities,” she said.

“While we have made steady gains over a sustained period of time, forward trends are showing that improvements are slowing. As a result, we have begun to introduce a series of strategic initiatives designed to keep improving workplace safety and deliver strong return-to-work and service rates while keeping premium costs low and achieving our longer term performance targets.”

Financial results at a glance

Financial results 2012/13 2011/12 2010/11 2009/10 2008/09
Performance from insurance operations $119m $385m $294m $654m $277m
Actuarial release $179m $182m $136m $189m $78m
Net result after tax $1.084b ($676m) $521m $176m ($1.255b)
Funding ratio 108% 96% 108% 100% 97%
Average premium 1.298% 1.338% 1.338% 1.387% 1.387%

Average injury insurance premium rates

2011/12 1.338% 1.41% 1.42% 1.547% 1.68% 2.19% 2.75%
2012/13 1.298% 1.80% 1.450% 1.691% 1.68% 2.28% 2.75%
2013/14 1.298% 1.82% 1.42% 1.668% 1.554% 2.36% 2.75%