WorkSafeNB’s 2016 operating results were released today in its 2016 Annual Report. The report highlights a year of continued improvement in service delivery and stakeholder engagement, better than expected investment returns, and a continuing upward trend in claim acceptance and duration.
WorkSafeNB recorded a $114.8 million deficit in 2016, resulting in a funding level of 112.1%. “The deficit was primarily due to higher than expected claims costs, which were offset by better than expected investment return,” said Tim Petersen, acting president and chief financial officer. Claim costs reflect the latest trends, valuation assumption changes and changes to benefit entitlements resulting from policy changes. The significant policy changes were implemented in response to differing interpretations of legislation by the Workers’ Compensation Appeals Tribunal (WCAT). Cost increases in 2016 were largely the result of the WCAT’s differing interpretations of legislation affecting standards of evidence to accept claims and subsequently determine continued benefits, especially as it relates to soft tissue injuries. “This has led to significant increases in the number of case-managed claims and their duration,” Petersen said.
Additionally, changes in the valuation for hearing loss claims to reflect increasing volumes and costs also contributed to the increase. In response, WorkSafeNB reached out to the hearing service providers to work on a strategy to reduce the claim costs, and has just launched a hearing protection campaign reminding employers and workers of the importance of protecting their hearing.
From an investment standpoint, WorkSafeNB’s portfolio earned a return of 9.16% in 2016, exceeding its budgeted returns of 6.08%. Inflation for the same period has averaged 1.50%, resulting in a real return of 7.66% for the period. “This exceeded WorkSafeNB’s expected real return objective by 3.91%,” Petersen said. WorkSafeNB’s investment return for the 20 years ended December 31, 2016 has averaged 6.57%. Inflation for the same period has averaged 1.81%, resulting in an average real return of 4.76% for the period. This exceeds the expected real return objective by 1.01%.
In 2016, WorkSafeNB’s administration costs increased from $43.7 million to $48.7 million, but remained well below budgeted costs of $51.2 million. The increase in actual costs is primarily the result of investments made for service transformation and advancing safety leadership.
WorkSafeNB is required by legislation to reimburse the provincial government for the operating costs of the worker and employer advocates ($1.4 million) and the WCAT ($1.3 million).
WorkSafeNB continues to invest in safety leadership and increased workplace inspections. In 2016, WorkSafeNB launched a safe waste collection prevention campaign, worked with industry leaders to improve safety in the nursing home industry, partnered with the CNIB to launch the New Brunswick Eye Safety Tour, expanded safety days for elementary schools, and released an award winning mobile app which provides quick and easy access to health and safety resources.
“Every partnership and initiative we undertook in 2016 was strategically developed to prevent injuries and minimize claims costs,” Petersen said. “And while 2016 brought a number of changes and challenges, WorkSafeNB is committed to adapting to and facing them head on to ensure healthy and safe workplaces for all New Brunswickers.”
We invite you to read the 2016 Annual Report to learn more about WorkSafeNB and our results.