Improved performance strengthens ACC’s sustainability

Improved performance strengthens ACC’s long term sustainability

Information released today shows that ACC continued to improve its performance rehabilitating injured New Zealanders over the past financial year.

Four key rehabilitation indicators have all improved during the year. Those are: people no longer dependent on ACC after 70 days – 71%, up from 67% two years ago people no longer dependent on ACC after 273 days – 93%, up from 91% two years ago number of people on ACC long term – about 12,000, down from 14,500 two years ago proportion of people going on to require time off work after an injury – 3.25%, down from 4.1% two years ago.

“Getting people back to their normal lives, as far as possible and as soon as possible is ACC’s core role. So these results are very pleasing” said ACC Chairman John Judge.

“Additionally, this improved performance has led to a further reduction in ACC’s net deficit, making the Scheme more sustainable into the future”.

Preliminary financial results for the 2010/11 year show a forecast net surplus of around $2.5 billion*. That means the Corporation’s net deficit will fall from last year’s $10.3 billion to about $7.8 billion.

The $2.5 billion* surplus is calculated as follows. improved performance of the insurance business +$2.1 billion improved investment performance +$1.7 billion Economic factors -$834 million Miscellaneous -$478 million

Overall ACC Scheme solvency has now improved to 72% from just 46% two years ago.

This result is due to a range of factors but most notably the improved rehabilitation of injured clients and improved investment returns. It has also been important that ACC has stuck more closely to its legislation than was perhaps the case in the past.

“ACC received over 1.6 million new claims this year. By helping these people get back to work or independence faster we’ve not only improved their lives but also lowered our own claim costs and stopped the growth in our future liabilities that was so severe for so many years”, Mr Judge said.

“This is a great result, due in no small part of the efforts of ACC staff, but there is still a long way to go. The remaining deficit of $7 billion is still a major issue and now is not the time to rest on our laurels. These positive trends could easily reverse.”

* Given the current volatility of external economic factors the final result for the financial year may change.

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