Workers compensation opportunity for WA and Tas businesses
Business ManagementBusinesses in Western Australia and Tasmania are invited to participate in a pilot program focused on group buying in workers compensation. This would mean that instead of buying workers compensation insurance as an individual business, everyone who participates would purchase a collective piece of the cover.
This opportunity has stemmed from the rising cost of business-related insurance and an investigation completed by Apple and Pear Australia Limited (APAL) into the creation of a Discretionary Mutual Fund (DMF) for industry.
The first stage in setting up a DMF is to determine whether it’s workable, which was confirmed following a feasibility study completed late 2019. The DMF would provide coverage for industrial special risks (ISR) – such as expanded polystyrene (EPS) insulation panels – property, liability, machinery and potentially crop protection.
However, it would not be feasible or advised to have all cover sitting in the DMF which is why group buying opportunities are also being presented. These opportunities shared across the country would include management liability, motor vehicle, travel and cyber coverage. There are additional benefits, in terms of workers compensation, for businesses in WA, Tas, the ACT and NT who have an opportunity to pool resources with other growers in their state/territory to save money and purchase this cover as a group. This is because workers compensation in these areas is underwritten and a broker can negotiate terms for business owners. The government controls workers compensation in each of the other states which is why the same opportunity doesn’t apply.

Figure 1: Structure outlining how current insurances would be redirected. Note: It would not be feasible for all coverage to sit in the mutual and some insurance products are better suited to group purchasing arrangements. This leads to three opportunities that will be managed by a single desk and invoicing system.
Why participate in the workers compensation pilot?
There are eight insurers licensed to provide workers compensation in WA and seven in Tas. Because there are multiple insurers, engaged individually by each business, there are a range of rates and deals being offered. Collectively, apple and pear growing businesses face similar risks but appear to the insurance industry in silos because these businesses are not acting, or purchasing, together.
APAL engaged Justin Niven and Tom Patterson from KJ Risk Group to conduct the DMF feasibility study. Now that phase one is complete, they’re working towards increasing the scale of DMF participants; and implementing group buying and workers compensation opportunities, where appropriate.
A case study has been completed for one of their clients, a large WA-based buying group, to highlight the savings they’ve made through their workers compensation program within the last two years.

Above: Performance improvement metrics for KJ Risk Group’s large, WA-based buying group.
What is a claim experience discount?
A claim experience discount (CED), or rebate, is a feature offered by most insurers for larger workers compensation programs and acts as both a business retention tool and also a reward to clients for good claim performance.
While the features of a CED can vary per policy, they are fundamentally offered by an underwriter to the client where the following two scenarios are achieved:
- The Client renews their policy with the Insurer for a further 12 months (eg. for a 2019/20 CED to be payable, the Client needs to renew the policy with the same Insurer for the 2020/21 policy period); and
- The Client’s claim costs remain below a certain threshold (most CED’s will allow a rebate for claim costs so long as the total incurred costs remain below 70 per cent of the total premium charged for each policy year).
How are these outcomes achieved?
- As the broker working for the large WA-based buying group, KJ Risk has developed a relationship with senior leaders of their chosen insurer to ensure they’re working with the best team.
- The strong working relationship between KJ Risk and the insurer ensures all buying group members receive strategic claim support.
- A KJ Risk representative attends quarterly claim reviews in person where they sit with the insurer and review all claims.
- Comprehensive safety audits have been introduced at the lower performing sites within the buying group.
- Performance reports are shared with the buying group to ensure they’re aware of their risks, including trend analysis to identify/clarify the risks across the board.
- A Job Dictionary is created to outline the typical tasks performed at each site. Functional requirements of each role are measured and recorded into a formal document. This document can then be sent to a general practitioner (GP) in the event of a workplace incident, to highlight the list of duties and identify appropriate tasks that can still be performed, with little risk of re-injury/aggravation while the worker recovers from their injury.
If you would like to participate in the workers compensation pilot or require more information about the DMF and group buying opportunities contact: APAL Manager, Future Business Richelle Zealley: 03 9329 3511 or [email protected]. Alternatively, contact the following representatives from each state: Pomewest Executive Manager, Nardia Stacy: 08 968 869 or [email protected]; and Fruit Growers Tasmania Policy & Engagement Officer Michael Tarbath: 03 6169 2059 or [email protected].
Expressions of interest can be submitted via this link and close Friday, 29 May.