Victoria’s workers compensation scheme remains financially sound with returns for the six months to December in line with expectations, according to the latest half-yearly report from WorkSafe Victoria.
Chief Executive of WorkSafe, Colin Radford said that at 31 December last year, WorkSafe’s insurance funding ratio (a measure of assets against claims liabilities) was 123 per cent, well above the midpoint of the 100 to 140 per cent target range.
“WorkSafe and the Victorian Funds Management Corporation manage the workers compensation scheme’s investment portfolio to achieve sound returns over the long term,” Mr Radford said.
“The portfolio has achieved an average return of more than eight per cent a year over the past decade,” he said.
Mr Radford said the growth in the cost of claims, and an increase in the length of the time injured workers spent in the scheme, led to a rise in the valuation of WorkSafe’s liabilities and contributed to a Performance from Insurance Operations (PFIO) of negative $1.1 billion.
“This was offset by strong returns on the compensation scheme’s investment portfolio, contributing to an after-tax loss of $502.5 million for the first half of the financial year – a $148 million improvement on the result for the six months to December 2019,” he said.
