WELLINGTON - Despite a sharp fall in premium income on its employers' account, the ACC managed to turn in a 25 per cent higher surplus in the six months to December 1998 after the sharemarket's rebound at the end of last year tripled investment income.
While the surplus onthe employers' account was down from $153.9 million in the same period of 1997 to $41.6 million, a jump in investment income from $46.6 million to $136.7 million boosted ACC's bottom-line surplus to $145.1 million, a $28.5 million gain.
Its chief executive, Garry Wilson, said the sharemarket's last-minute recovery had resulted in an investment return of 8.9 per cent, comfortably outperforming the portfolio benchmark of 6.4 per cent.
However, Mr Wilson said the three most satisfying aspects of the corporation's performance lay in a reduction in accidents brought about by injury minimisation programmes, quicker returns to work and continued reductions in the number of long-term claimants, down by nearly 2000 in the six months to just below 26,000.
In the past 18 months, the number of long-term claimants has dropped from 30,000, with an accompanying reduction in the long-term claims liability from $9 billion to an expected $7.4 billion by June 30.
While ACC will be forced to withdraw from the workers' compensation market when it is opened to competition on June 30, Mr Wilson said it would still be the largest player in accident insurance because of its continuing role in servicing the self-employed, motor vehicle and other non-work accident claims.
Despite being barred from underwriting workers' compensation insurance, Mr Wilson said ACC would have a large, ongoing role with employers through provision of advisory and management services to its competitors and through its own efforts in getting non-workplace accident victims back into paid employment.
ACC would also become a significant investment manager as it moved away from pay-as-you-go to full funding, and funds under management would grow from $1.8 billion now to about $4.5 billion.
