Insurance Commission romps to bumper profit, renews concern on public servant mental health claims

Rising mental health claims by WA public servants show no sign of abating even as unexpectedly good investment returns propelled the State Government’s insurer to a bumper profit of more than $300 million for the December half-year. The Insurance Commission of WA, which levies third-party insurance on the State’s motorists but also handles insurance cover for government agencies and State property, said the $324.8m unaudited first-half profit easily bettered its budget projections and the $154.5m made for the same period in 2023. The credit goes to the $419.5m profit on ICWA’s now $9.4 billion investment portfolio as its main fund returned 5.4 per cent for the half-year. Chief executive Rod Whithear said on Thurdsday the commission had increased net profit by “another couple of hundred million” before equity markets were reined back in February. He said that while new US President Donald Trump’s policies were “shaking things up”, increasing volatility, “we’re not necessarily concerned, particularly in the long term, that will be negative for investment markets”. “The headline claims about lower regulations, lower tax ... those sentiments, if not the facts, should be supportive for markets,” Mr Whithear said. He said ICWA’s fund managers continued to look for opportunities in Henderson to invest in the infrastructure planned to support AUKUS submarines and major defence contracts earmarked for WA, but “nothing seems to be moving quickly, unfortunately”. “Hopefully, some investment funds in Australia can play a role in financing some of those (Defence Department) needs.” While the insurance market remains under pressure because of rising repair and reinsurance costs around the world, influenced by more frequent, severe weather events, Mr Whitwear said ICWA’s investment returns had insulated WA motorists by limiting premium rises to about 2.5 per cent. Premium increases for other insurance, including buildings and medical cover, had also moderated to single digits. However, Mr Whithear said compensation claims by public servants for mental health issues were still rising, making up a record 60 per cent of all claims at the end of 2024. Public servants account for 11 per cent of the State’s workforce, but more than 50 per cent of all mental health claims. Last financial year, ICWA paid over $300m to compensate government employees suffering mental health problems, receiving 715 claims alone in the 12 months to June 30. Almost a third (246) of those claims were for “work pressure”, while there were 207 claims after “traumatic events”, 167 for harassment in the workplace and 52 for exposure to workplace violence. Mr Whithear said on Thursday the average claim for mental stress was about double the claim for a physical injury, and involved twice as much time off work. While it was now more “socially acceptable” for workers to take time off for mental health issues, “the worry is, that the more people that are off for workers’ compensation, the more stress is transferred to the remaining workers”. “So there’s a spiral, people are working double shifts and overtime to cover for the absences, that doesn’t put them in a good space either.” The first-half profit generated a $31.9m dividend for the Government in December, on top of a $26m payout in June. ICWA also paid $58.3m in insurance duty and $83.1m of tax-equivalent payments. The Government has pocketed more than $2.3b in dividends from the insurer in the past 10 years.