Insurers have called for legislative reform and claims handling improvements to address growing cost pressures on workers’ compensation schemes.

Investments in early intervention programs and government action to tackle a shortage of psychiatrists and psychologists are also recommended in a report today by the Insurance Council of Australia.

Psychological injury and other complex claims are associated with higher costs and a delay in employees returning to work, the paper says.

And while claim frequency has been relatively stable in recent years, average claim costs are increasing.

ICA’s workers’ compensation policy paper says since 2021-22, average premium rates have increased in public/government-underwritten schemes by 23.03%; in private/competitively underwritten schemes by 0.94%; and across all schemes by 11.98%.

“Psychological claim numbers continue to grow as a share of total claims,” the paper says. “While this remains a minority of total claim numbers, psychological claims tend to have a much higher average claim size than physical claims.”

The average size of serious mental injury claims – at least one week of work lost – across all jurisdictions was about $65,000 in 2021-22, more than three times the overall average.

Governments and regulators should review scheme settings to address evolving challenges, to ensure they remain sustainable and balance the interests of injured workers and employers, the paper says.

“While individual employers can take steps to make their workplaces safer, a co-ordinated effort involving governments, regulators, insurers and health professionals to address existing and emerging issues would help ease pressure on workers’ compensation schemes.”