Late bids deluge insurance firms

By Richard Braddell

WELLINGTON - Insurers are working through the night to meet a deluge of demand for workers' compensation insurance.

Employers who have been slow in seeking a replacement to ACC when it withdraws from the workers' compensation market on July 1 will end up insured with the new Crown entity @Work insurance, whether they like it or not.

But with brokers and insurers working at full capacity to meet the rush to reinsure, it is likely that many quotations and policies will not be completed according to statutory timetables, resulting in employers who have decided on an insurer being forced to go with @Work for the three month transition period at least.

Insurers have a 10-day limit to supply a quote and must provide cover within five days of acceptance. But the chief executive of the Employers and Manufacturers Association northern branch, Alastair Thompson, said it was taking anything up to 20 days for quotes to be provided because the insurers were inundated.

"We always knew it was going to be a big ask for something like 180,000 policies to be issued within such a short time period," Mr Thompson said.

The association, which has been working closely with broker Willis Corroon, has been working on promoting awareness among its members for several months. But while big business is expected to make huge savings from private provision, gains for a smaller businesses will be marginal and there are many who will give up and default to @Work, Mr Thompson said.

The director of Injury Management New Zealand, Brian Blackman, said he had worked every weekend for the last six weeks, and staff had been working until 3 am simply to handle the physical volume of quotes that had to be sent out.

Injury Management is an offshoot of Willis Corroon and was set up four years ago to provide claims and case management services under the ACC employer accredited scheme.

"It's just the physical volume of policies that have to be sent out within such a short time-frame," he said, blaming the indecent haste in which privately provided workers' compensation has been introduced on political rather than practical imperatives. Labour has said it will repeal the privatised regime if it becomes government.

To be registered as covered under the legislation, employers must supply an alpha-numeric insurance number. But in one of the ill-thought-out details, the letter "I" had been included in some numbers and that could be punched in as a "one", Mr Blackman said.

In such cases, employers would automatically default to @Work. In the first instance, employers who end up with @Work will do so for a three month transition period after which they can elect to stay with @Work, or go to a private insurer. The position then is less clear regarding employers who stay with @Work beyond the transition period and then decide they would like to cancel in favour of another insurer.

Spokesman, Mark Thomas, said @Work had still to finalise cancellation details and was under no obligation to set a particular duration on contracts but would encourage employers to go for 12 months.