What we have seen in June Workers’ Compensation renewals
NSW carries the most change into this renewal round. While the statewide premium target collection rate is frozen at 1.99% for 2026-27 and 2027-28, three changes landing at the same time will matter more for most employers. A new excess applies to claims under policies issued or renewed from 4pm on 30 June 2026, with employers carrying up to the first two weeks of weekly compensation. Safe Employer Reward eligibility now depends on actual wage declarations being lodged within four months of the policy period ending, and premium capping for experience-rated employers tightens from 30% to 25%. Taken together, these changes mean more of the early cost of a claim, and more of the premium consequence of late or inaccurate wage data, now sits directly with the employer.
Victoria renews against an unchanged average rate, although WorkSafe’s stated regulatory priorities continue to target healthcare and social assistance, construction, government, agriculture and manufacturing, which makes inspection readiness part of renewal preparation in those industries. South Australia renews at an unchanged 1.85% average, and Queensland has held its target average rate at $1.343 per $100 of wages for a second consecutive year, with WorkCover Queensland citing rising mental injury claims and costs among the pressures it is managing. In WA, insurers are writing against recommended rates that are 5.9% higher on average, with industry-level movements ranging from a small decrease in agriculture to increases above 20% in some classes, so renewal outcomes will depend heavily on classification and individual claims performance. Tasmanian suggested rates have risen in recent years on the back of higher average claim sizes, the ACT has published its 2026-27 suggested rates, and across these markets and the NT there remains genuine scope to negotiate terms where an employer can present a strong claims story.
Premium pricing trends
Published average premium rates for 2026-27 are flat almost everywhere, with NSW frozen by legislation, Victoria holding at 1.80% for a fourth consecutive year, South Australia holding at 1.85% for a fourth year as well, and Queensland retaining the lowest scheme average in the country. Western Australia is the exception, with WorkCover WA lifting its recommended average rate from 1.823% to 1.931%, an increase of around 5.9%, on the back of higher claim volumes, higher average claim costs and the effect of ATO Class Ruling CR 2025/88 on settlements. Flat averages should not be read as falling cost, because in every scheme the pressure sits in psychological claims, and rates are being held while eligibility, duration and return-to-work settings are tightened underneath them. WA simply shows what happens when a scheme prices the trend directly rather than absorbing it.
Insurer behaviour
Scheme behaviour across 2026-27 has been disciplined, with regulators holding or legislating rates while tightening the settings that drive cost. This is not a market chasing premium so much as schemes holding the line on price while the psychological claims problem is addressed through eligibility and prevention, and NSW makes that trade explicit: the eligibility test tightens at the same time the premium lever is frozen, which means the scheme’s financial recovery depends on psychological claim volumes actually falling over the next two years.
Claims trends
Psychological injury remains the fastest growing and most costly claim category nationally. Safe Work Australia’s most recent national data shows mental health conditions now account for around 12% of all serious claims, with median time lost of around 35 weeks against roughly 7 weeks for other claims, and median compensation more than four times higher. Harassment, bullying and work pressure are the leading causes nationally, a pattern mirrored in individual schemes, with icare reporting around 70% of psychological claims in the NSW Nominal Insurer arising from those sources. Duration is the main cost driver, and most high-cost claims are visible well before lodgement, presenting first as workload problems, conduct complaints or poorly planned performance processes.
Legal and regulatory developments
NSW passed its reform package across two bills in November 2025 and February 2026, and it represents the most significant tightening of psychological injury compensability in any Australian scheme to date. From 1 July 2026, a primary psychological injury is only compensable where it is caused by one or more defined relevant events, such as bullying, harassment, unreasonable work demands or traumatic events, with a real and direct connection to employment. The reasonable management action defence has been broadened, weekly payment duration reduced, impairment thresholds increased to 25%, and insurers must determine conduct-based claims within 42 days, with the Industrial Relations Commission deciding whether the alleged conduct occurred. Elsewhere, Victoria’s psychological health regulations are now being enforced through the expanded inspection program, Queensland’s statutory review includes psychological injury within its terms of reference, and WA’s 2023 Act changes continue to flow through premium settings.
AI and technology impact
NSW became the first Australian jurisdiction to legislate WHS duties for digital work systems, passing the Work Health and Safety Amendment (Digital Work Systems) Act 2026 in February. Once proclaimed, employers must ensure that worker health and safety is not put at risk by the allocation of work through digital systems, defined to include algorithms, artificial intelligence, automation and online platforms, and WHS entry permit holders gain powers to inspect those systems. Privacy Act changes commencing in December 2026 will separately require transparency where automated decision-making significantly affects individuals. Any employer using automated rostering, monitoring or work allocation tools is within scope.
What policyholders should do now
The starting point for policyholders is understanding where claims are actually originating. Recurring patterns in the claims data are the most reliable indicator of where premium is being generated, and because every scheme prices on experience, improvements made at the source flow through to premium for years. For claims of every type, the fundamentals remain the same: report injuries early, respond well on day one, offer suitable duties quickly, and stay actively involved rather than leaving the claim to the insurer or agent. Duration drives cost in every scheme, so open claims should be reviewed regularly, estimates challenged where they no longer reflect the likely outcome, and long-running claims managed toward resolution rather than left to drift. Psychosocial risks warrant the same discipline as physical hazards, with assessments that reflect how work is genuinely performed, and management decisions such as performance management and restructuring documented with clear reasons, fair notice and contemporaneous records. From there the priorities are jurisdictional. NSW employers should review day-one claim response ahead of the new excess and lodge wage declarations on time to protect their Safe Employer Reward. Employers in the privately underwritten states should negotiate renewal on the strength of their claims performance, Victorian employers in the priority industries should be inspection ready, and any organisation using automated rostering, monitoring or work allocation tools should review them before the new WHS and privacy obligations commence.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
