CGU has announced that it will exit the New South Wales workers’ compensation scheme when its current contract runs out at the end of the year.
The firm will not make a submission to act as an agent of the scheme for 2018-2020, it was confirmed in a statement from parent company
IAG.
The move comes days after icare revealed a new direct proposition for new business customers.
New business owners in New South Wales will be able to quote and bind workers’ insurance policies directly with icare, rather than through a scheme agent.
The direct offering is designed to improve customer service by making it faster and easier for employers to arrange workers’ insurance.
Ben Bessell, IAG chief executive in the Australian business division, confirmed that CGU had made its decision based on changes to the design and distribution of the new model, making it commercially unviable for the business.
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“We have valued our partnership with icare and have been proud to be an insurer for the employers and workers of NSW for the past 30 years,” Bessell said. “However, after careful consideration we have decided it is no longer viable for the business to act as an agent in the future model of the scheme.”
CGU will continue to have a workers’ compensation presence in other states and territories.
John Nagle, icare group executive for workers’ insurance, said that CGU’s decision will see “no immediate change” for existing policyholders.
“We understand their commercial and operational reasoning in their decision to not continue in the selection process,” Nagle said.
“We will continue to work with them over the coming months and in July begin transitioning employer policies and workers’ claims to icare’s ongoing service providers.”
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