Recent media attention has focused on one of our clients, icare, who manage the NSW workers compensation insurer (the Nominal Insurer). Finity was appointed in 2017 by way of a publicly tendered procurement process as an independent actuarial expert to value the insurance liabilities of the Nominal Insurer every six months.
As a professional consulting firm we do not normally make any public comments about the work we carry out for our clients. However, some of the media commentary has suggested that the liability figures in the Nominal Insurer’s accounts are significantly understated. This statement is in response to those media reports and to correct the public record.
Each valuation of the Nominal Insurer’s liabilities is a substantial project undertaken over a number of months by a team of experienced actuarial professionals.
The Board of icare engages another firm of actuaries to perform external and independent peer review of the liability valuation.
The Auditor-General for NSW audits the accounts of the Nominal Insurer, and engages a third firm of consulting actuaries to review the liability valuation.
The NSW workers compensation scheme is complex, there have been a number of major changes to the legislation governing benefits over the past decade (2012 and 2015 in particular), and the operating environment has also been evolving. Finity’s estimates of the Nominal Insurer’s liabilities are based on detailed knowledge of the scheme and with complete access to all underlying data. Our estimates then benefit from being reviewed by two other independent firms of actuaries and we have absolute confidence in the quality and professionalism of our work.
The comments on the Nominal Insurer’s liabilities as reported in the media are based on rough benchmarks and approximation, which fail to take into account important aspects of the NSW scheme benefit design.