Colonial has decided to enter into the Workers' Compensation insurance market by forming an exclusive strategic alliance with HIH Insurance. Instead of offering its own products Colonial advisers will now be able to offer businesses the HIH WorkAble contracts.
Aside from Royal & SunAlliance, which has formed the Fusion Insurance joint venture with Southern Cross and GMV Associates, the big life offices have stayed away from Workers' Compensation.
Colonial advisers who write workers' compensation business will be paid a new business commission of 5 per cent of annual premium income paid annually.
HIH was founded in Australia in 1968 specifically to cover workers' compensation risks. It has been operating in New Zealand since 1986 and is a leading insurer of specialist and long-term liability insurance.
Meanwhile, there are still concerns about the future of the Workers Compensation market. The Labour Party says if it gets into power after the next election it will scrap the market and return it to state owned enterprises.
It says private insurers will not be able to offer this type of insurance.
The Council of Trade Unions says preparations to privatise work accident insurance are in such disarray that the deadline for introducing the regime must be extended to avoid chaos. "The new Accident Insurance Act itself is riddled with anomalies, due to the haste with which it was cobbled together before Christmas," says CTU vice president Ross Wilson.
"It's going to be a lawyers' banquet."
Companies are now allowed to quote for this business and the new market kicks off on July 1.
For more information on Workers' Compensation Insurance, click here to go to a Special Report.
Colonial has decided to enter into the Workers' Compensation insurance market by forming an exclusive strategic alliance with HIH Insurance. Instead of offering its own products Colonial advisers will now be able to offer businesses the HIH WorkAble contracts.