The NSW workers’ compensation scheme has reported a $3.2 billion underwriting loss as the number of psychological injuries rose 20%, state insurer icare’s annual report says.

The 2024-25 nominal insurer underwriting result deteriorated from a $2.81 billion loss the previous year, but the scheme’s bottom line benefited from stronger investment revenue.

The scheme, which covers 3.4 million workers, reported gross written premium of $5.4 billion and net claims expenses of $7.62 billion.

Net investment revenue of $1.48 billion rose from $911.7 million a year earlier, and the $1.7 billion bottom-line loss improved from a $1.88 billion loss.

The annual report says psychological injuries have more than doubled since 2022 in the nominal insurer scheme.

In the Treasury Managed Fund scheme – which covers public sector workers and volunteers – psychological injury claim numbers have grown 60% since 2022. About 70% of claims are caused by bullying, harassment and work pressure.

“Psychological injury claims are complex, often severe and take longer for recovery,” the annual report says. “This is a challenge for the overall performance of our workers’ compensation schemes, with both return to work and claims costs being impacted.”

The Treasury Managed Fund comes under Insurance for NSW, which also provides cover for more than $400 billion in state government assets.

Insurance for NSW reported an underwriting loss of $3.2 billion, with adverse impacts from psychological injuries, severe weather and large liability claims under litigation.

The Home Building Compensation Fund – a safety net for homeowners if building contractors cannot honour commitments due to insolvency, death or a licence suspension – reported a $92 million underwriting loss.

A bottom-line net result of $40 million benefited from investment income and a Treasury top-up, partly offset by higher claim numbers and larger average costs for multi-unit defects.

The reports are available here.