Towards the back end of 2020, CGU announced that it would not be renewing it’s licence as an authorised Workcover Agent in Victoria, which was due to expire at 30 June 2021.

This news seemingly came from left field, however when looking at this in the context of an insurance company, it is not that surprising.

CGU have pulled out of a number of markets in Australia in recent years which is reflective of the hardening insurance market and the reduced risk appetite for insurance companies. No matter what spin insurance companies put on it, they sole purpose of their existence is to make money by transferring risk. In home insurance this works by rebuilding your home if it burns down in a fire for a fee. In workers’ compensation this works by paying for medical expenses and compensation if an employee gets injured. If one of those two pillars is not performing then the insurance company will cease operations. Case in point CGU.

That is the background on WHY CGU have refused to sign a contract for on-going claims management in Victoria, but how does that impact you?

Well to be honest, it impacts you in a pretty shitty way. While CGU are contractually obligated to perform the role as an agent until 30 June 2021, the reality is that staff will be resigning left, right and centre. To be honest, you can’t blame them, knowing that in 6 months time you won’t have a job.

What does this mean for you?

This means that the glacial pace that insurers normally work at will be EVEN slower now at CGU. More files will go ‘missing.’ Payments will be more likely to be missed. Emails not responded to and generally abysmal performance. The closer to 30 June, the worse the service is going to get. It will get to a point where there will be barely anybody answering the phone and all staff that are left will be concentrating only on paying benefits and nothing else. This means that conciliation, IME’s etc will have NO DOCUMENTS. Unfortunately there is no repercussion for the insurer failing to do their job properly for the next 6 months and the person that is going to miss out the most is the reason the scheme exists in the first place. The injured worker.

What can you do?

Unfortunately, you are going to have to get in the drivers seat even more if your claim is managed by CGU. You need to be diligent with certificates, appointments etc. I would recommend sending certificates in once and if no response within 2 days send it again to make sure it is uploaded.

What is going to happen after 30 June? 

This happened in Victoria last in 2016, when QBE did not obtain a licence for the 5 year contract and EML stepped in to take over a large number of employers from the QBE portfolio. What will happen is Worksafe Victoria will announce a transition plan, which might mean that other insurers in Victoria (Allianz, XChanging, Gallagher Bassett or EML) will start managing your claim from 30 June onwards. We will provide more information in the lead up to this when there are developments.

In the meantime if you need any further support please don’t hesitate to reach out.