Insurers juggle with ACC statistics

By RICHARD BRADDELL

Between the lines

It looked open and shut. Apart from the massive premium savings in the privatised workers' compensation market, workers were benefiting from dramatically lower accident rates, according to data produced by the Insurance Council last week.

The figures, collated from returns to the regulator, showed workplace accident claims were down a hefty 40 per cent on ACC's, while fatalities and claims for injuries involving time off work had halved. Furthermore, disputes were down 85 per cent.

The apparent explanation: employers, with the incentive of the threat of higher premiums, were going out of their way to make workplaces safer.

Perhaps so. But there are reasons for taking such figures with more than a rock of salt. Take the 40 per cent drop in work-related accident claims. To get a comparable number to ACC's, the Insurance Council annualised the first five months of returns to the regulator.

We can retrace the council's steps, and by doubling the six months' returns from July to December, get annualised claims of 150,000 that are only slightly higher than the 145,000 the council calculated.

Either way, the numbers look impressive beside the 246,000 attributed to ACC in its last year in the market.

If only. One reason the council's number is so good is that it chose to include July, the first month of the new market, when claims were a mere 3700. They have been trending upwards to around 16,000 a month at present.

Including July skews annualised claims down by 20,000 or more. Annualise, instead, the last two months of 1999, and claims would have been over 190,000.

That still leaves a yawning gap of 56,000 between ACC and the private market. One reason is that accidents tend to be higher in the yet to be reported summer months of January to March, when casual workers move into accident prone primary sectors such as agriculture and forestry.

Annualise and compare instead ACC's last first half of 111,000 with the private sector and the gap between the two narrows further to 24,000.

Doubtless, better behaviour by employers accounts for some of the difference. But employer misbehaviour has helped too.

Many minor accidents may not have been reported. And according to the Medical Association, employers - presumably seeking to dodge paperwork or to keep experience ratings intact - frequently turn up at doctors' surgeries trying to persuade GPs to reclassify injuries as a non-work or as the result of sickness.

Without labouring the point further, there are serious problems with the rest of the Insurance Council's conclusions.

Far better for the council to concentrate on the real defects of the Government's proposals. And they are far from small.