In 2008/09 ACC disclosed a $4.8 billion deficit for the year and that came on top of a $2.4 billion deficit the year before. This was a trend that couldn’t be allowed to continue. The Board therefore set some challenging targets around improving rehabilitation performance and running the organisation more efficiently.
ACC’s performance has improved and for the past two years it has reported surpluses of approximately $2.5 billion each year.
This means that rather than the $12.8 billion net liability at the start of the 2009/10 year, ACC’s net deficit is now approximately $7.8 billion.
“ACC’s growing unfunded liability was threatening the sustainability of the Scheme and this couldn’t go on.
“Now I’m pleased to be able to announce that ACC’s performance is expected to improve for the second year running and preliminary financial results for the 2010/11 year show a forecast net surplus of around $2.5 billion.
“This is a significant turnaround driven by the improved rehabilitation of injured New Zealanders, lower claims rates and better investment returns among other factors. The Board is very pleased with the ongoing efforts of staff at ACC to turn the organisation’s performance around. It’s important that ACC has been able to achieve these improvements while staying true to its core purpose which is to support injured people to return to work or independence,” said ACC Chairman John Judge.
Any accident insurance provider can dramatically improve its financial performance if it stops accepting claims for a wide range of ailments that it previously covered.
Certainly in the work-related area of accident cover there has been a noticeable change in attitude by ACC to acceptance of claims, and it hasn’t been in favour of the individual concerned.
The real success of ACC is not going to be measured on the short-term balance sheet, but in the longer term when the real effects of the new profit driven regime are felt. Hopefully we will see a reduction in workplace accidents and a more streamlined claims system that improves rehabilitation care. Hope is free. Accident cover is not.