For many businesses, workers’ compensation premiums are their single largest expense (second only to payroll expenses). But the good news is, it is possible to control these premiums – while also keeping your people safe at work and injury-free.
In this article, we show you how we did exactly that for a client who was under financial duress from their workers’ compensation premiums.
This client faced two key challenges:
The impact of these two challenges alone would result in a near 500% increase in premiums over three years.
What’s more, our client’s insurer refused to meet with them to resolve these concerns – despite repeated requests.
Understandably, our client was feeling frustrated and powerless to resolve these very serious issues.
Through our review of the client’s workers’ compensation program, we identified the key causes of underperformance – and took the following steps to rectify them:
One of our client’s main challenges was communication with their insurer. Because their insurer would not engage with them, they couldn’t take corrective action.
To increase the insurer’s accountability for our client’s portfolio performance, we spoke to the insurer and insisted they appoint a dedicated Account Manager who would be responsible for our client’s program. We then transferred our client’s claims management to an office that was closer to them to make communication easier.
Our client has specialist licences for demolition and asbestos removal, which they advertise to differentiate themselves in the market. However, this is not their predominant business activity.
When we reviewed our client’s workers’ compensation program, we discovered their insurer had made an error. Their industry classification had been re-classified from ‘site preparation services’ to ‘demolition’.
This attracted an industry rate increase of around 60%.
So how did this happen? The insurer conducted an online review of the business and incorrectly concluded that demolition/asbestos removal was their primary business activity. And they did not engage with our client during this process.
As soon as we discovered this error, we gathered information to demonstrate that our client’s primary business activity was in fact site preparation services. We then submitted a formal premium review to the insurer to have the policy re-rated.
We conducted a detailed review of our client’s claims and discovered that wages had been incorrectly paid on a single claim – which resulted in a ~$60K premium increase.
The insurer had incorrectly reimbursed wages to a worker who chose to abandon his employment following an injury. However, when our client protested paying these wages, these objections fell on deaf ears with their insurer.
After discovering this error, we submitted a review for reimbursing wages during the period that the injured worker had abandoned his employment. We gathered evidence that showed that the worker:
After presenting this evidence, the insurer conceded that the wages should not have been paid under workers’ compensation.
We set about systematically addressing the issues our client faced, supporting them to maintain a financially successful business. Throughout this process, we provided regular updates and communicated any roadblocks we encountered.
Thanks to this transparency and robust communication, the client quickly placed their trust in us.
All in all, the full range of services we provided included:
THE OUTCOME: Keeping Aussie businesses operating
Austbrokers Corporate successfully removed the unsustainable financial pressure the client faced – and turned its poorly managed workers’ compensation program into a well-oiled machine.
This meant that we prevented an Australian business from collapse.
In summary, we were able to:
Thanks to our intervention, our client achieved a huge saving from their past and future premiums. And we turned an underperforming claims portfolio around, making our client’s business profitable once again.
|$300K+ savings||$60K refunded||Greatly reduced premiums|
|from retrospective premium adjustment||for incorrectly paid wages||both retrospectively and
into the future
At Austbrokers Corporate, we’ve invested heavily in our workers’ compensation capabilities and services.
With our expertise and guidance, we can help your business minimise costs and exposures of workplace risks. This includes workers’ compensation premiums and claims/injury management expenses.
Our team has been in the Australian workers’ compensation industry for over 50 years, working with large insurers, regulators and global brokers. We are specialists in alternative premium models such as the loss prevention and recovery (LPR) scheme in NSW – and burner programs in the privately underwritten states.