Media release

7 June 2011

Insurance companies admit ACC costs less

Claims by the insurance industry that ACC will have an unfair advantage in the market over private insurers demonstrates that ACC is a more cost effective means of delivering accident compensation than private insurance says the ACC Futures Coalition.

“It is interesting that private insurers are bemoaning the fact that they have to pay dividends to their shareholders and ACC doesn’t,” said ACC Futures Coalition spokesperson Hazel Armstrong. “That was precisely one of the reasons why the founders of ACC consciously decided against using private insurers to deliver this vital social service and now the insurers are admitting that they can’t compete with that”.

“Treasury also commented in their papers released along with the Stocktake of ACC Accounts last year that ACC would have to be shackled in order to enable the private insurers to compete,” said Ms. Armstrong,” so it is not just the insurers but the government’s own advisers that are confirming our arguments about cost.”

“The original Woodhouse Report that led to the establishment of ACC gave serious consideration to this issue and also noted the extra costs that come with the inevitable duplication of systems from having multiple competing providers delivering ACC.”

“The PriceWaterhouseCoopers’ review of ACC in 2008 concluded that ACC was more cost effective than Australian workers compensation schemes that rely on private provision,” said Ms Armstrong. ”Its time the government did the same, as the only people who will benefit from this reform are the Australian insurance companies who stand to make $200million a year.”

ENDS
Contact: Hazel Armstrong: (027) 472 1793

02:37PM Tuesday, 07 June, 2011