Self Insurance News July 2010 – Ageing workforce and financial implications for workers’ comp self insurers
Australia’s population is ageing. In recent years, there has been increased awareness and extensive media coverage of this trend — and a growing concern about its implications for the economy. This was highlighted by the increase in national retirement (pension) age announced in the 2009 Federal budget. At the same time there are significant changes occurring in the age and gender of Australia’s workforce.
So what are the financial implications of an ageing workforce, and an increasing national retirement age, on workers’ compensation costs, particularly for self insurers? This article examines the key drivers of workers’ compensation claim costs broken down according to age and gender of worker. Using publicly available projections of the future workforce, these cost drivers are then overlaid to estimate the effect of population and workforce ageing on workers’ compensation costs over time.
We then look at some ‘what if’ scenarios.