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ACC – cheaper and safer than private insurers

14 August 2000

ACC – cheaper and safer than private insurers

Employers and the self employed are paying $50 million dollars less this year for workplace accident insurance than they did under the private scheme and further reductions are likely with good safety management programmes says Accident Insurance Minister Dr Michael Cullen.

ACC's average workers' compensation premium after safety management discounts is $1.11 for every $100 of wages. That is 9 percent lower than the average $1.21 charged by the private market during 1999/2000. Dr Cullen says the average premium is lower in ten out of eleven overall industry categories.

Dr Cullen says employers now have three basic premium options with ACC.
 The standard premium, with discounts (10%, 15% and 20%) available for good health and safety management practices
 The partnership discount plan with average 37% or 43% discounts available for short term self-management, and
 The full self cover partnership plan with large discounts (up to 90%) in which employers take on more risk and fully manage the injury prevention and rehabilitation programmes.

By the end of the calender year, ACC expects that either the partnership or safety management programmes will cover 30 percent of all New Zealand workers.

Dr Cullen says at least 70 percent of employers have received lower premium rates from ACC and smaller employers have benefited most because most insurers had a minimum cost of establishing a relationship with an employer, regardless of size, whereas ACC levies are governed exclusively by liable earnings.

"On average, companies with $10 million liable earnings or more are more likely to have higher premiums under ACC, while those with $10 million liable earnings are likely to have a lower premium with ACC than they had with private insurers.

"We are dealing in average prices when there is a very large range in premiums – from 20c per $100 of wages, or 2 percent in teaching to around $8 or 8 percent for professional rugby and league players. Employers in high-risk industries can lower their own ACC premiums by introducing safety management practices and reducing the injury rate of their employees", said Dr Cullen.

ENDS

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