Premium notices have been flooding into the office over the last few months and I’m continually surprised with the information, or lack thereof, that is provided to employers to allow them to actually understand what it is they are paying and why.
There seems to have been a conscious decision to provide as little information as possible, as these notices do not allow employers to assess or understand their performance, review their industry classification or develop goals to assist in premium reduction for the year ahead.
So what do you need to know?
The key factors that drive the premium you are paying, or have just paid, are as follows: –
- Employer claims cost rate and Industry claims cost rate (an assessment of your claims performance).
- Premium claims costs – rolling three years from 2017/18 (key factor, and the most controllable, within the premium calculation).
- Weighted Industry rate and industry classification/s (supporting your predominant business activity).
- Employer performance rate (dictates whether you are paying above or below the industry average).
Understanding these factors allows employers to develop strategies and targets around claims costs and ensures the relevance and accuracy of industry classifications.
All this information is available to you but you need to ask for it. Opportunities for improvement can then be assessed and modelled based on this information, and informed decisions made about future claim strategies and outcomes.
Don’t just pay your premium invoice – use it as an opportunity to better understand what, how and why.