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ACC Premiums Reduce Over $500 Million In Two Years

ACC’s lower premium rates that come into effect for most people today mean New Zealanders will save nearly $220 million on personal injury insurance this year, ACC chief executive Garry Wilson said today.

“Someone on the average wage of $34,500 paid $34.50 less last year, and will save a further $69.00 this year, “ Mr Wilson said. “That means they’ve got an extra $103.50 in their pocket.

“Over two years the total savings in ACC premiums for New Zealanders is estimated to be $514 million”.

The majority of the savings are to employers for workplace cover and earners who pay a premium on earnings for injuries outside the workplace such as at home and in sport. Premium and levy reductions for employers will leave $125 million in their pockets this year. The premium saving for earners is estimated to be $73 million this year.

The average discounted premium in the employers account has dropped from $1.47 per $100 earnings in 1999/2000 to $1.11 in 2000/01 and another 22% to 85 cents this year. The lower premiums, along with reduced levies for employers represent savings of $379 million in the last two years.

For earners, the drop in premium from $1.24 to 98 cents over two years means savings of $102 million for those in the workforce.

Premium rates for self-employed people have reduced by nearly a third from $1.85 in 1999/2000 to $1.35 this year.

“A self-employed crop farmer earning $29,000 can expect to pay about $345 in premiums for the year,” Mr Wilson said. “Those premiums cover the full range of services ACC provides from injury prevention to rehabilitation and subsidised medical services, and weekly compensation for people whose injuries prevent them from working.”

Mr Wilson said the Government was able to lower ACC’s premiums in all accounts because of significantly better performance by the corporation over the last few years. “Essentially fewer people are being injured, and they’re getting treated better and faster so spending less time on the scheme.”

The other notable change to premiums this year are changes in classification structures to remove cross subsidies, along with the creation of new premium groups.

“ACC consultations with employers and other groups led to some premium groups being reclassified. Also the number of self-employed premium groups increased to 121 to mirror the employer groups.

“This ensures that lower risk groups pay lower premiums and by defining the business groups better, the risk of that work is more accurately reflected,” Mr Wilson said.

“For example a new pricing group for Oil and Gas Extraction has reduced that group’s premiums by 54%, and for Bread Manufacturing 51%.

“In some instances this means increased premium rates for higher risk activities. For the self-employed this increase was limited to 10% this year so as not to create unnecessary financial pressure.


Ends
For further information:
Richard Ninness
Public Affairs manager (04) 918 7884 or 025 470 255

Premium/ Levy reductions
2001/02 2000/01 1999/2000
Employers’ Account
Average premium 0.85 1.11 1.47
Total $ premium change $104m $125m

Earners’ Account
Average premium 0.977 1.155 1.244
Total $ premium change $73m $29m

Self-employed Account
Average premium 1.35 1.64 1.85
Total $ premium change $17m $12m

Residual Account
Average premium 0.35 0.40 0.67
Total $ premium change $21m $129m

Motor Vehicle Account
Average premium 128.45 132.20 132.20
Total $ premium change $4m

Total savings $219m $295m

Total savings over 2 years is $514m

All figures are net and exclude GST including Earners’ Account

Employer Premium rates – Major industries


Industry 2001/02 Premium
(.90c AVERAGE) 2000/01 Premium
(.90c AVERAGE) Percentage change
(AVERAGE -22%)
Livestock farming $2.10 $2.28 -8%
Forestry $4.48 $5.67 -21%
Fishing $3.99 $4.69 -15%
Meat processing $2.49 $3.15 -21%
Bread manufacturing $1.56 $3.16 -51%
Printing & publishing $0.80 $1.14 -30%
Electricity generation $0.45 $0.84 -46%
House construction $2.91 $3.68 -21%
Supermarkets & grocery $1.03 $1.40 -26%
Air transport $1.01 $1.05 -4%
Postal & courier $1.28 $1.99 -36%
Banks $0.28 $0.36 -22%
Insurance $0.28 $0.36 -22%
Legal services $0.26 $0.35 -26%
Central government $0.40 $0.76 -47%
Primary & secondary education $0.16 $0.20 -20%
General practice $0.14 $0.46 -70%
Hospitals $0.64 $0.81 -21%
Fire Service $1.85 $2.44 -24%
Rugby $6.26 $7.92 -21%


Self Employed Premium – major industries


Industry 2002/01 Premium
per $100 of earnings
($1.35 AVERAGE) 2000/01 Premium
per $100 of earnings
($1.64 AVERAGE) Percentage change

Bricklaying (Building) $3.89 $3.90 0%
Crop Growing
(Farming)
$1.13 $1.71 -34%
Diary Cattle Farming
(Farming) $1.34 $1.77 -25%
Couriers $1.67 $2.86 -42%
Road Freight Transport $2.16 $2.76 -22%

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