Opening ACC to Competition

Murray McCully Accident Insurance

Hon Murray McCully
Minister for Accident Rehabilitation and Compensation Insurance

MEDIA RELEASE

EMPLOYERS GEARING UP FOR CHANGES

"Employers appear ready and keen to take advantage of the opportunities the Government is creating in opening ACC to competition," the Minister for ACC, Murray McCully said today.

"A UMR Insight survey of 800 employers done in March shows that 94% of employers are aware of the changes occurring on 1 July, when they move to the commercial insurer of their choice to cover any injuries that happen in their workplaces," he said.

UMR Insight surveyed a mix of urban and rural employers and a range of industries. The research was commissioned by the Department of Labour to assess awareness and the development of the accident insurance market.

"84% said they would be ready to switch from the ACC, which will cease providing workplace cover for employees from 1 July, while just 5% said they would do nothing and be allocated to an insurer, which is likely to be the new SOE insurer, At Work," Mr McCully said.

"While the research can only measure intention and we must be cautious about this figure, it shows a pleasing awareness by employers of the benefits that competition will bring.

"And it's not just the large employers who know about the reforms and are preparing for the new market. 83% of small employers, those with up to five full-time equivalent staff, and 89% of medium sized employers, those with between 6 and 49 full-time equivalent staff, intend to choose an insurer rather than be allocated.

"There's a strong measure of support for the reforms across all employers, with 63% in favour, and only 19% opposing. Strongest support comes, perhaps predictably, from the large employers with more than 50 full-time equivalent staff, at 75%, but 61% of small employers and 68% of medium sized employers also support the changes.

"The research also indicates that self-employed people, who can stay with ACC or choose a commercial insurer for their work and out of work accidents from 1 July, are waiting to see how the market develops for them.

"Of the 350 self-employed people asked, 26% said they would switch to a commercial insurer, 19% said they intended to stay with ACC and 39% said they would wait and see. Again, there was a strong awareness of the reforms (85%) and measure of approval, with 63% supporting and 18% opposing the changes.

"As insurers register and begin marketing their products, I expect that both employers and self-employed will take advantage of the opportunity to shop around for the deal that best meets their needs and the needs of their employees," the Minister said.


The ACC Reforms
- A Quantitative Study Amongst Employers

[March 1999]
UMR Insight Limited
E-mail: umr@umrinsight.co.nz

Objectives

The primary objective of this survey was:

  • to measure and provide benchmark ratings to track the intentions of employers regarding workplace accident insurance.

    Other specific objectives of the quantitative research stage are:

  • to measure the current level of awareness and knowledge of the ACC reforms among employers;
  • to measure the intentions of employers and when, and if, they are likely to act to purchase workplace insurance;
  • to gain a better understanding of the sources of information that employers use to gain information regarding the ACC reforms;
  • to provide direction to the development of the communications strategy of the Department of Labour;
  • to provide benchmark figures that will serve as the basis for tracking and assessment;
  • to provide indications of the likely difference in behaviour of employers broken down by urban, provincial, business size and major region samples, and if possible industry type.

Methodology

This report is based on results of a telephone survey of in total 800 experienced rated New Zealand employers.

A random selection of telephone numbers was provided by the ACC which was loaded directly into UMR Insight 's CATI system. The CATI sample management system automatically randomises the telephone numbers provided to interviewers.

Quotas were set by business size for small (0-5 full time equivalent employees), medium (5.5 to 49 full time equivalent employees) and large businesses (50 or more full time equivalent employees). This included a booster sample of 150 large employers. A booster sample was used in order to provide a valid sub-sample of this key audience. The total sample significantly over-represents larger employers so overall results were weighted back to ensure there was no impact on overall results.

For a sample of 650 the margin of error for a 50% figure at the 95% confidence level is plus or minus 3.8%.

For the sub-sample of 150 large employers the margin of error for a 50% figure at the 95% confidence level is plus or minus 7.6%.

Fieldwork was conducted from 3rd March to 23rd March 1999 at UMR Insight 's national interview facility in Auckland. There was only light interviewing in the first week and the last week of interviews was required for call-backs to the difficult to reach larger employers.

Respondents were approached at each company on the basis of being the person "who makes the decision on ACC and other insurance related matters".

Telephone interviewing was conducted during standard work hours of 9.00am to 5.00pm unless a call-back appointment was specifically booked for time outside those hours.

Six call-backs were made to initially selected respondents to reduce non response due to unavailability.

Some totals in tables in the attached report will not add to 100% because of rounding.

Overall Findings

  • There was 94% declared awareness of the ACC reforms with 61% able to correctly nominate the 1st July starting date.

    Overall levels of knowledge of the reforms appeared to be stronger amongst the employers than the self employed.

  • 63% of employers declared they favoured the reforms with 19% opposed.
  • A very high 84% declared that they would be ready to switch to a private sector insurer by 1st July. This number was well above expectations and does need to be carefully interpreted.

    As noted in the self employed survey report there are always steps to be negotiated before declared intentions in a survey translate into actual behaviour. This is especially the case if complex steps are required to realise the behaviour and if high costs are involved.

    Even more caution is required for the employers than the self employed as the choice given to the employers (while the actual one facing them) does present them with one active, positive option and a more passive option.

    This point is underlined by the finding amongst employers who declared they were not aware of the reforms or who were aware of the reforms but declared they knew not that much or hardly anything about them. 79% still declared that they would be ready to switch to a private sector insurer by 1st July.

  • The information pack has clearly been very effective with employers. There was 90% recall of the pack. Of those who recalled the pack 74% had read or skimmed through it and 9% had kept it.

General Setting

  • 66% of employers surveyed declared they used an insurance broker.
  • 92% of employers declared they had fire and general insurance, 92% public liability and indemnity insurance, 51% health insurance and 26% key man insurance.
  • 41% of employers declared they had a lot or a fair amount of contact with their insurance providers with 58% declaring they had not that much or hardly any contact.
  • Amongst those who declared they had a lot or a fair amount of contact 94% declared they were generally satisfied with their personal dealings with 4% dissatisfied.
  • There was also a reasonably high value for money rating. Amongst all employers 63% considered they were generally getting value for money for the premiums they pay to insurance companies with 23% considering they were not getting value for money. 14% were unsure or volunteered conditional answers.

Awareness of Reforms

  • There was a high 94% declared awareness that changes were being made to ACC.
  • 66% of employers aware of the reforms were able to correctly nominate the 1st July starting date.
  • There were respectable levels of declared knowledge about the changes being made to ACC. 11% of employers aware of the reforms declared they knew a lot about the changes, 46% a fair amount with 42% declaring they knew not that much or hardly anything.
  • Amongst those who declared they knew a lot or a fair amount about the changes the introduction of competition was, as with the self employed, overwhelmingly identified as the major feature of the changes.
  • There was a fairly high level of interest declared by employers about the changes being made to ACC.

    Amongst the 94% who declared they were aware of the changes 40% declared they were very interested, 40% that they were somewhat interested with only 17% declaring they were not that interested or not interested at all.

Attitude to the Reforms

  • 63% of employers declared they favoured the proposed changes to ACC, 19% were opposed with 18% unsure or volunteering conditional answers.
  • The major reason given by those who supported the ACC reforms was support for the introduction of competition. This was followed by an expectation of cheaper or fairer premiums followed by an expectation of better service.

    The major reasons given by those who opposed the ACC reforms were a concern that they would be more expensive and a view that there was nothing wrong with the current system. Negatives coming through at a lower level were that it would involve more work for employers, support for Government control and a concern that service would deteriorate with the fragmentation of suppliers.

  • In prompted testing there was strong agreement with the positive statements that the reforms would mean "more account would be taken of the particular circumstance of individual companies, that there would be "more incentive for employers to improve workplace safety" and that there would be "better service than ACC currently provides".

    There was also strong agreement with the negative statement that the ACC reforms would mean more disputes and more work for lawyers.

    Of the positives statements tested:

      78% considered that it was very or fairly likely and 12% not that or not at all likely that the ACC reforms would lead to "more account being taken of the particular circumstances of individual companies".

      69% considered that it was likely and 24% not likely that the ACC reforms would lead to "more incentive for employers to improve workplace safety".

      65% considered that it was likely and 20% not likely that the ACC reforms would lead to "better service than ACC currently provides".

      55% considered that it was likely and 34% not likely that the ACC reforms would lead to "lower premiums".

      54% considered that it was likely and 29% not likely that the ACC reforms would lead to "faster rehabilitation of injured workers".

      33% considered that it was likely and 53% not likely that the ACC reforms would lead to "fewer accidents in the workplace".

    Of the negative statements tested:

      67% considered that it was likely and 23% not likely that the ACC reforms would lead to "more disputes and more work for lawyers".

      47% considered that it was likely and 39% not likely that the ACC reforms would lead to "under reporting of accidents".

      34% considered that it was likely and 55% not likely that the ACC reforms would lead to "injured employees being forced back to work too soon".

Response to Reforms

  • Given a choice 84% of employers declared that they would be ready to switch to a private sector insurer by 1st July, 5% that they would allow themselves to be allocated to an insurer by the Government with 11% unsure or volunteering a conditional answer.

    As noted, considerable care is needed in interpreting "declarations" in surveys of future intentions.

  • Amongst employers who declared they knew a lot or a fair amount about the reforms 89% indicated they would be ready to switch by 1st July, 4% that they would be allocated with 8% unsure or volunteering conditional answers.

    Amongst those who are not aware of the reforms or declared they knew not that much or hardly anything about the reforms 79% declared they would be ready to switch by 1st July, 6% that they would be allocated with 15% unsure or volunteering conditional answers.

  • The time frame for making a decision is still seen by most as one to two months away. 23% declared they would finally decide which option they would take in the next month, 22% before May, 32% before June with 23% unsure or volunteering a conditional or other answer.

Information

  • The major sources of information about the changes to ACC identified were ACC, followed by direct mail, followed by insurance brokers and then newspapers.

    A wider range of information sources was identified by employers compared to the self employed. This is generally consistent with the greater levels of knowledge apparent amongst employers.

    Brokers were a more significant source of information for employers than for the self employed.

  • A high 90% recalled receiving the information pack. Of those 74% declared they had read or skimmed through this information pack.
  • Of those who had read or skimmed through the information pack 80% considered that it was very or fairly helpful in explaining the ACC reforms with 13% considering it as not that helpful or not helpful at all.
  • Amongst the 90% who recalled receiving the information pack, a very high 94% had kept it.
USE INSURANCE BROKER
Do you use an insurance broker?
  

MAR 99

%

Yes

66

No

33

Unsure

1

INSURANCE COVER
Does your company have insurance cover in the following areas?
  

Yes

%

No

%

Unsure

%

Fire and General

92

7

1

Public Liability and Indemnity

92

6

2

Health

51

48

1

Key Man

26

60

14

CONTACT WITH INSURANCE PROVIDERS
How much contact have you personally had with your insurance providers over the last year or so   have you had a lot, a fair amount, not that much or hardly any?
  

MAR 99
%

A lot

13

A fair amount

28

TOTAL A LOT/A FAIR AMOUNT

41

Not that much

26

Hardly any

32

TOTAL NOT THAT MUCH/HARDLY ANY

58

Unsure

1

SATISFACTION WITH DEALINGS WITH INSURANCE PROVIDER

[Respondents who have had a lot or a fair amount of personal dealings with their insurance providers were asked:]

Have you been generally satisfied or dissatisfied with your personal dealings with your insurance providers?
   MAR 99
%

Satisfied

94

Dissatisfied

4

Unsure

2

Base: 41% of respondents who had a lot or a fair amount of personal dealings with their insurance providers (n=320)

VALUE FOR MONEY FROM INSURANCE COMPANIES
Do you think your company is generally getting value for money for the premiums it pays to insurance companies?

   MAR 99
%

Yes

63

No

23

Some value for money/others not (volunteered)

6

Unsure

8

AWARENESS OF PROPOSED CHANGES TO ACC
Are you aware of any changes being made to ACC that will affect employers and self employed?
   MAR 99
%

Yes aware

94

No

5

Unsure

1

DATE OF CHANGES TO ACC
[Respondents who were aware of the changes being made to ACC were asked:]
On what date are these changes being introduced?
  

%

July 1999 - Right

66

Unsure

20

Other

14

Base: 94% of respondents who were aware of changes being made to ACC (n=735)

LEVEL OF KNOWLEDGE ABOUT PROPOSED CHANGES TO ACC
[Respondents who were aware of the changes being made to ACC were asked:]
How much would you say you know about the reforms to ACC to be introduced on 1 July 1999?
   MAR 99
%

A lot

11

A fair amount

46

TOTAL A LOT/A FAIR AMOUNT

57

Not that much

28

Hardly anything

14

TOTAL NOT THAT MUCH/HARDLY ANYTHING

42

Unsure

1

Base: 94% of respondents who were aware of changes being made to ACC (n=735)

MAJOR FEATURES OF THE PROPOSED CHANGES
[Respondents who were aware of the changes being made to ACC and knew a lot or a fair amount about the reforms were asked:]
Could you tell me what you think are the major features of these changes?
Anything else?
  

%

COMPETITION

Can get workplace insurance elsewhere-ACC no longer compulsory (52.5%), There will be competition (21.0%), Now have a choice, can choose (1.7%), Need to find us a new insurance company (1.2%)

76.4

Employers need insurance for employee work injuries (23.4%)

23.4

PRIVATISATION/DEREGULATION

Deregulating (4.7%), Government is getting out, it is going private (5.8%)

10.5

MORE FAIR/MORE JUST (6.8%)

6.8

Businesses still need to contribute to ACC to pay their debts (5.7%)

5.7

More flexible (3.7%)

3.7

HIGHER PREMIUM

Pay 2 quarters within 2 months, have to pay 2 premiums (0.9%), Premium reduction (0.9%), Paying more for insurance for my employees, will cost more (0.3%)

2.1

More work for us (0.9%)

0.9

HAVE TO FIND A NEW COMPANY OR ONE WILL BE ALLOCATED (0.3%)

0.3

ADVISE EMPLOYEES ON HOW TO MAKE A CLAIM (0.3%)

0.3

Base: 57% of respondents who were aware of changes being made to ACC and knew a lot or a fair amount about the reforms (n=416)

INTEREST IN THE PROPOSED CHANGES

[Respondents who were aware of the changes being made to ACC were asked:]

How interested are you in the proposed changes to ACC   are you?

   MAR 99
%

Very interested

40

Somewhat interested

40

TOTAL INTERESTED

80

Not that interested

11

Not interested at all

6

TOTAL NOT INTERESTED

17

Depends (volunteered)

1

Unsure

1

Base: 94% of respondents who were aware of changes being made to ACC (n=735)

SUPPORT/OPPOSE PROPOSED CHANGES TO ACC
Let me give you some details about the ACC reforms and how these reforms may affect your company.

From 1st July employers must buy workplace insurance cover from an insurance company other than ACC. The self employed can choose to stay with ACC or buy both work and non-work accident insurance from an insurance company of their choice.

Do you support or oppose the reforms to ACC to be introduced in 1 July 1999?

   MAR 99
%

Support

63

Oppose

19

Depends (volunteered)

5

Unsure

13

REASONS FOR SUPPORTING THE ACC REFORMS

[Respondents who support the changes being made to ACC were asked:]

Why do you support the ACC reforms? Anything else?

  

%

SUPPORT COMPETITION

Increase competition, get away from the monopoly situation (27.3%), More options, can choose who to insure with (23.9%), Market competition will decide the premiums, market control (1.0%)

52.2

CHEAPER/FAIRER PREMIUMS

Cheaper premiums, will cost less, value for money (24.0%), Ensure that the right amount is paid, fairer premiums (4.1%)

28.1

Give a better AND QUICKER service/ more efficient (10.1%)

10.1

ACC is going backwards/ACC is not fair (6.8%)

6.8

USER PAYS

User pays is better (2.7%), Make people more responsible for themselves (1.8%)

4.5

We need the reforms (3.0%)

3.0

Cost less for the taxpayer/ government can not afford ACC (2.3%)

2.3

Government has already decided/ have no choice (2.2%)

2.2

SAFETY/AWARENESS

Make workplaces safer as they won't be compensating the unsafe ones (1.0%), Make employers more aware (0.9%)

1.9

Hopefully stop the fraud (1.3%)

1.3

Rather control things myself/don't like dealING through the Government (1.3%)

1.3

EXPERIENCES WITH ACC

ACC has been good to me so far (0.5%), We have had problems with ACC (0.5%)

1.0

DOESN 'T MATTER

Does not matter who you are paying insurance to (0.5%), There will be no difference (0.2%)

0.7

CLEARER

Easier to understand than ACC (0.5%), Will bring clarity to the whole system (0.2%)

0.7

Base: 63% of respondents who support the changes to ACC (n=492); multiple response.

REASONS FOR OPPOSING THE ACC REFORMS

[Respondents who oppose the changes being made to ACC were asked:]

Why do you oppose the ACC reforms? Anything else?

  

%

MORE EXPENSIVE

Cost more in the long run, more expensive, not give value for money (24.7%), Puts insurance out of some peoples price range (3.3%), Now have to pay 2 premiums (1.7%), Still have to pay the same high premiums (0.8%)

30.5

Nothing wrong with the current system/ keep doing what doing (25.5%)

25.5

MORE WORK/HASSLE

A hassle to go and find a new insurer, too much for employers to do (13.9%), Much more paperwork (1.6%)

15.5

GOVERNMENT CONTROL

Government is loosing control, should stay Government controlled (7.4%), Anti privatisation (2.4%)

9.8

FRAGMENTATION/COMPETITION

Get better service from one big supplier, too fragmented (7.3%), Country is too small for competition (1.6%),

8.9

Needs reforming but this is not the right way (5.9%)

5.9

The unknown factor/ need more information (5.7%)

5.7

Gone away from original ACC/moving away from the original ethic (4.9%)

4.9

Been paying too long without benefit (4.1%)

4.1

Private sector won't do any better (2.4%)

2.4

Rushed through/ not really thought about (1.9%)

1.9

DON 'T TRUST THE PRIVATE SECTOR TO PAY OUT (1.6%)

1.6

OPEN THE DOOR FOR LIABILITY SUITS (1.0%)

1.0

Base: 19% of respondents who oppose the changes to ACC (n=148); multiple response

STATEMENTS ON REFORMS

Circumstances will vary for different companies but overall how likely do you think it is that ACC reforms will lead to the following. Is it very likely, fairly likely, not that likely or not likely at all?

   VERY LIKELY FAIRLY LIKELY
%
TOTAL LIKELY
%
NOT THAT LIKELY
%
NOT LIKELY AT ALL
%
TOTAL NOT LIKELY
%
DEPENDS
%
UNSURE
%

POSITIVES

More account taken of the particular circumstances of individual companies

29

49

78

8

4

12

2

9

More incentive for employers to improve workplace safety

31

38

69

17

7

24

2

5

Better service than ACC currently provides

27

38

65

14

6

20

3

13

Lower premiums

14

41

55

21

13

34

3

8

Faster rehabilitation of injured workers

16

38

54

22

7

29

4

13

Fewer accidents in the workplace

9

24

33

33

20

53

4

10

NEGATIVES

More disputes and more work for lawyers

31

36

67

20

3

23

1

8

Under reporting of accidents

15

32

47

32

7

39

2

12

Injured employees will be forced back to work too soon

9

25

34

43

12

55

3

9

READY TO SWITCH/BE ALLOCATED

By 1st July employers will have to choose a private sector insurance company for their workplace accident cover or be allocated to an insurer by the Government.

It is early days but do you think it is most likely you will:

Be ready to switch to a private sector insurer by July 1, or
Allow yourself to be allocated to an insurer by the Government?

   MAR 99
%

Be ready to switch to a private sector insurer by July 1

84

Be allocated to an insurer by the Government

5

Depends (volunteered)

3

Unsure

8

TIMEFRAME FOR DECIDING WHICH OPTION
How soon do you think it will be before you decide which option you take?
   MAR 99
%

Next month

23

Before May

22

Before June

32

Other

11

Depends (volunteered)

10

Unsure

2

INFORMATION SOURCES REGARDING ACC REFORMS

Where do you get most of your information about the changes to ACC? Anything else?

   MAR 99
%

ACC

49

Direct mail

39

Insurance brokers

32

Newspapers

26

Television

11

Trade publications

10

Word of mouth from others

8

Advertising from insurance companies

7

Consultants

5

Radio

4

Course

4

Accountant

3

Labour Department

3

Inland Revenue

3

Other

3

The Internet/website

1

Base: All; multiple response

RECALL OF INFORMATION PACK
Do you remember recently receiving an information pack that outlines the ACC reforms to be introduced from 1 July?
  

MAR 99

%

Yes

90

No

7

Unsure

2

READERSHIP OF INFORMATION PACK   

[Respondents who remember receiving an information pack were asked:]   

Did you read or skim through this information pack?

  

MAR 99

%

Yes

74

No

25

Unsure

1

Base: 90% of respondents who remembered receiving an information pack (n=708)

EFFECTIVENESS INFORMATION PACK   

[Respondents who remember receiving an information pack and read it were asked:]   

How helpful did you find the information pack in explaining the ACC reforms   very helpful, fairly helpful, not that helpful, not helpful at all?

  

MAR 99

%

Very helpful

26

Fairly helpful

54

TOTAL HELPFUL

80

Not that helpful

11

Not helpful at all

2

TOTAL NOT HELPFUL

13

Unsure

7

Base: 74% of respondents who remembered receiving an information pack and read it (n=526)

RETENTION INFORMATION PACK

[Respondents who remember receiving an information pack were asked:]

Did you keep this information pack?

  

MAR 99

%

Yes

94

No

5

Unsure

1

Base: 90% of respondents who remembered receiving an information pack (n=708)



The ACC Reforms
- A Quantitative Study Amongst Self-Employed

[March 1999]
UMR Insight Limited
E-mail: umr@umrinsight.co.nz

Objectives

The primary objective of this survey was:

  • to measure and provide benchmark ratings to track the intentions of self employed regarding workplace accident insurance.

    Other specific objectives of the quantitative research stage were:

  • to measure the current level of awareness and knowledge of the ACC reforms among the self employed;
  • to measure the likelihood of self-employed, currently dealing with ACC, switching to private insurance companies;
  • to gain a better understanding of the sources of information the self-employed use to gain information regarding the ACC reforms;
  • to provide direction to the development of the communications strategy of the Department of Labour;
  • to provide benchmark figures that will serve as the basis for tracking and assessment;
  • to provide indications of the likely difference in behaviour of the self-employed broken down by urban, provincial, business size and major region samples.

Methodology

This report is based on results of a telephone survey of 350 self employed New Zealanders that earned over $14,000 in the last tax year. A random selection of telephone numbers was provided by the ACC which was loaded directly into UMR Insight's CATI system. The CATI sample management system automatically randomises the telephone numbers provided to interviewers.

The margin of error for a 50% figure at the 95% confidence level is plus or minus 5.2%.

Fieldwork was conducted from 12th March to 18th March 1999 at UMR Insight's national interview facility in Auckland.

Telephone interviewing was conducted during standard work hours of 9.00am to 5.00pm unless a call-back appointment was specifically booked for a time outside those hours.

Six call-backs were made to initially selected respondents to reduce non-response due to unavailability.

Some totals in tables in the attached report will not add to 100% because of rounding.

  • Overall Findings
  • Declared awareness of the reforms is high at 85%. 49% were able to correctly nominate the 1st July starting date.
  • The reforms were overwhelmingly identified as providing competition for ACC.
  • There was overall a positive attitude towards the reforms with 63% in favour and 18% opposed.
  • 26% of the self employed declared they would be ready to switch to a private sector insurer by 1st July; 39% declared they would wait and see; 19% that they would stay with the ACC and 3% that they would choose to insure with the new State-Owned Enterprise. 12% were unsure.

    47% of those who declared they would "wait and see" thought they would eventually end up with a private sector insurance company and 15% that they would stay with the ACC. The remainder were unsure.

  • It is critical, nevertheless that appropriate caution is applied to interpretation of declared intentions at 1st July.

    This declared response was in answer to a prompted set of options which some of the self employed may not have yet thought about to a great extent.

    There are also always steps to be negotiated before declared intentions measured in any survey translate into actual behaviour. This is especially the case if complex steps are required to realise the behaviour and if high costs are involved.

  • The information pack appears to have been highly effective in drawing attention to the reforms. 83% remembered receiving the pack and of those 80% declared they had read or skimmed through the information pack. A very high 92% of those who remembered receiving the pack had kept the pack which can certainly be taken as an indication that it was seen as providing important information.

General Setting

  • 47% of the self employed surveyed used an insurance broker.
  • 75% declared they had fire and general insurance, 69% public liability and indemnity insurance, 50% health insurance and 17% key man cover.
  • The self employed had moderate levels of contact with insurance providers. 10% declared they personally had "a lot" of contact with their insurance providers, 24% "a fair amount" and 64% "not that much" or "hardly any" contact.
  • Those who had a lot or a fair amount of contact with their insurance providers were mostly satisfied with the service provided. 94% declared they were generally satisfied and 5% dissatisfied with their personal dealings with their insurance providers.
  • Self employed were also reasonably satisfied on value for money provided by insurance companies. 55% thought they were getting value for money, 27% that they were not with 18% unsure or volunteering conditional answers.

Awareness of Reforms

  • There was 85% declared awareness of the ACC reforms amongst the self employed.
  • 49% of the self employed aware of the reforms were able to correctly nominate the July 1999 starting date.
  • 13% of the self employed who were aware of the reforms declared they knew "a lot" about the reforms, 37% a "fair amount" with 49% declaring they knew "not that much" or "hardly anything".
  • Introduction of competition overwhelmingly emerged as the key element of the reforms when those who declared they knew "a lot" or a "fair amount" about the proposed changes were asked what the main features were.
  • There were reasonably high levels of declared interest in the reforms. Amongst those aware of the reforms 33% of self employed declared they were "very interested" in the proposed changes to ACC, 42% that they were "somewhat interested" with 22% declaring they were not interested.

Attitude to the Reforms

  • 63% of self employed declared they supported and 18% that they opposed the reforms. 18% were unsure.
  • The major reason given for supporting the reforms was favouring the introduction of competition. This was followed well back by expectations of cheaper/fairer premiums and better service. Coming through at an even lower level were ACC negatives including getting worse, unfairness, fraud, poor service experiences and high costs.
  • The major reason given for opposing the reforms was concern that it would cost more. This was followed by a view that there was nothing wrong with the current system, concerns that fragmentation of service providers would lead to poorer service, the work involved in finding a new provider and support for Government provision of accident compensation insurance.
  • Of the positive statements tested:
      - 69% considered that it was very or fairly likely and 14% that it was not that or not at all likely that the ACC reforms would lead to "more account being taken of the particular circumstances of individual companies".

      - 66% considered that it was likely and 24% not likely that the ACC reforms would lead to "more incentive for employers to improve workplace safety".

      - 61% considered that it was likely and 18% not likely that the ACC reforms would lead to "better service than ACC currently provides".

      - 52% considered that it was likely and 38% not likely that the ACC reforms would lead to "lower premiums".

      - 50% considered that it was likely and 35% not likely that the ACC reforms would lead to "faster rehabilitation of injured workers".

      - 30% considered that it was likely and 54% not likely that the ACC reforms would lead to "fewer accidents in the work place".

    Of the negative statements tested:

      - 65% considered that it was likely and 24% not likely that the ACC reforms would lead to "more disputes and more work for lawyers".

      - 49% considered that it was likely and 34% not likely that the ACC reforms would lead to "under reporting of accidents".

      - 38% considered that it was likely and 43% not likely that the ACC reforms would lead to "injured employees being forced back to work too soon".

Response to Reforms

  • Given a choice of what they would do by 1st July:
      - 39% of self employed declared they would wait and see how the market develops before making up their mind;

      - 26% declared they would "be ready to switch to a private sector insurer by 1st July";

      - 19% that they would stay with the ACC as it is now;

      - 3% declared they would choose to insure with a new State-Owned Enterprise;

      - 12% were unsure or volunteered a conditional answer with a further 1% rejecting all options presented.

    As already noted care is needed in interpreting declared intentions in surveys.

    Those who declared they would "wait and see" were also asked if they thought it was more likely that they would end up with a private sector insurance company or stay with ACC.

    47% declared they would end up with a private sector insurance company and 15% that they would stay with the ACC with 38% unsure or volunteering a conditional answer.

    Those with an insurance broker were more likely to be ready to switch to a private sector company. Amongst this group 37% declared they would be ready to switch, 32% that they would wait and see and 15% that they would stay with ACC. Amongst the self employed who did not use an insurance broker 15% declared they would be ready to switch, 46% that they would wait and see and 23% that they would remain with the ACC.

    Amongst the self employed who declared they knew a lot or a fair amount about the reforms 39% declared they would be ready to switch to a private insurer by 1st July, 30% that they would "wait and see", 16% that they would stay with ACC, 3% that they would insure with the new SOE with 12% unsure or volunteering conditional answers.

    Amongst those who were not aware of the reforms and those, who while aware of the reforms declared they had not that much or hardly any knowledge of the reforms, 16% declared they would be ready to switch to a private insurer by 1st July, 45% that they would "wait and see", 20% that they would stay with the ACC, 2% that they would insure with the new SOE with 15% unsure or volunteering conditional answers.

Information

  • The major sources of information about the changes to ACC identified were the ACC itself and direct mail. The next most important was newspapers followed by television, word of mouth, advertising from insurance companies and trade publications.
  • There were good ratings for the information pack. 83% declared they remembered receiving the information packs. Of those 80% declared they had read or skimmed through the information pack.
  • Of those who declared they had received the information pack and had read or skimmed through it 72% declared that it was very or fairly helpful in explaining the ACC reforms and 15% that it was not that helpful or not helpful at all.

    Amongst all who remembered receiving the information pack a high 92% indicated they had kept it.

  

USE INSURANCE BROKER

Do you use an insurance broker?

  

MAR 99

%

Yes

47

No

51

Unsure

2

  

INSURANCE COVER

Does your company have insurance cover in the following areas<?

  

Yes

%

No

%

Unsure

%

Fire and General

75

22

2

Public Liability and Indemnity

69

28

3

Health

50

47

3

Key Man

17

64

19

CONTACT WITH INSURANCE PROVIDERS

How much contact have you personally had with your insurance providers over the last year or so   have you had a lot, a fair amount, not that much or hardly any?

  

MAR 99

%

A lot

10

A fair amount

24

TOTAL A LOT/A FAIR AMOUNT

34

Not that much

21

Hardly any

43

TOTAL NOT THAT MUCH/HARDLY ANY

64

Unsure

1

SATISFACTION WITH DEALINGS WITH INSURANCE PROVIDER

[ Respondents who have had a lot or a fair amount of personal dealings with their insurance providers were asked:]
Have you been generally satisfied or dissatisfied with your personal dealings with your insurance providers?

   MAR 99
%

Satisfied

94

Dissatisfied

5
1
  

VALUE FOR MONEY FROM INSURANCE COMPANIES

Do you think your company is generally getting value for money for the premiums it pays to insurance companies?

  

MAR 99

%

Yes

55

No

27

Some value for money/others not (volunteered)

3

Unsure

15

  

AWARENESS OF PROPOSED CHANGES TO ACC

Are you aware of any changes being made to ACC that will affect employers and self employed?

  

MAR 99

%

Yes aware

85

No

11

Unsure

4

  

AWARENESS DATE OF CHANGES TO ACC

[Respondents who were aware of the changes being made to ACC were asked:]

On what date are these changes being introduced?

  

%

July 1999   Right

49

Other

31

Unsure

20

Base: 85% of respondents who were aware of changes being made to ACC (n=297)

  

LEVEL OF KNOWLEDGE ABOUT PROPOSED CHANGES TO ACC

[Respondents who were aware of the changes being made to ACC were asked:]

How much would you say you know about the reforms to ACC to be introduced on 1 July 1999?

  

MAR 99

%

A lot

13

A fair amount

37

TOTAL A LOT/A FAIR AMOUNT

50

Not that much

31

Hardly anything

18

TOTAL NOT THAT MUCH/HARDLY ANYTHING

49

Unsure

1

Base: 85% of respondents who were aware of changes being made to ACC (n=297)

  

MAJOR FEATURES OF THE PROPOSED CHANGES

[Respondents who were aware of the changes being made to ACC

and knew a lot or a fair amount about the reforms were asked:]

Could you tell me what you think are the major features of these changes? Anything else?

  

%

Can get workplace insurance elsewhere-ACC no longer compulsory (61.7%), There will be competition (17.4%), Now have a choice, can choose (3.4%), Need to find us a new insurance company (1.3%), Give my money to someone else (0.7%), Self employed may go private or stay with ACC/is optional (0.7%)

85.2

Employers need insurance for employee work injuries< (14.8%)

14.8

Deregulating (5.4%), Government is getting out, it is going private (3.4%)

8.8

MORE FAIR/MORE JUST (4.7%)

4.7

Pay 2 quarters within 2 months, have to pay 2 premiums (2.0%), Paying more for insurance for my employees, will cost more (1.3%)

3.3

Businesses still need to contribute to ACC to pay their debts< (3.4%)

3.4

More flexible< (2.0%)

2.0

Will get better insurance cover (1.3%)

1.3

PREMIUM REDUCTION (0.7%)

0.7

Self employed may go private or stay with ACC/ is optional <(0.7%)

0.7

More work for us (0.7%)

0.7

It will be better for employers (0.7%)

0.7

Base: 50% of respondents who were aware of changes being made to ACC and knew a lot or a fair amount about the reforms (n=149); Multiple response

  

INTEREST IN THE PROPOSED CHANGES

[Respondents who were aware of the changes being made to ACC were asked:]

How interested are you in the proposed changes to ACC   are you?

  

MAR 99

%

Very interested

33

Somewhat interested

42

TOTAL INTERESTED

75

Not that interested

14

Not interested at all

8

TOTAL NOT INTERESTED

22

Depends (volunteered)

2

Unsure

1

Base: 85% of respondents who were aware of changes being made to ACC (n=297)

  

SUPPORT/OPPOSE PROPOSED CHANGES TO ACC

Let me give you some details about the ACC reforms and how these reforms may affect your company.

From 1st July employers must buy workplace insurance cover from an insurance company other than ACC. The self employed can choose to stay with ACC or buy both work and non-work accident insurance from an insurance company of their choice.

Do you support or oppose the reforms to ACC to be introduced in 1 July 1999?

  

MAR 99

%

Support

63

Oppose

18

Depends (volunteered)

3

Unsure

15

  

REASONS FOR SUPPORTING THE ACC REFORMS

[Respondents who support the changes being made to ACC were asked:]

Why do you support the ACC reforms? Anything else?

  

%

More options, can choose who to insure with (30.3%), Increase competition, get away from the monopoly situation (29.0%), Market competition will decide the premiums, market control (0.5%)

59.8

Cheaper premiums, will cost less, value for money (19.5%), Ensure that the right amount is paid, fairer premiums (4.1%)

23.6

Give a better AND QUICKER service/ more efficient< (12.2%)

12.2

ACC is going backwards/ ACC is not fair< (8.1%)

8.1

Make people more responsible for themselves (2.3%), User pays is better (0.9%)

3.2

We need the reforms (2.7%), Give stability (0.5%)

3.2

Hopefully stop the fraud (2.7%)

2.7

Rather control things myself/ don't like dealING through the Government< (2.3%)

2.3

Government has already decided/ have no choice< (2.3%)

2.3

As long as we do not lose anything out of it< (1.4%)

1.4

Make employers more aware (0.9%), Make workplaces safer as they won't be compensating the unsafe ones (0.5%)

1.4

ACC has not been good to me (0.5%), Have had problems with ACC (0.5%)

1.0

Cost less for the taxpayer/ government can not afford ACC< (0.9%)

0.9

Base: 63% of respondents who support the changes to ACC (n=221); multiple response.

  

REASONS FOR OPPOSING THE ACC REFORMS

[Respondents who oppose the changes being made to ACC were asked:]

  

Why do you oppose the ACC reforms? Anything else?

  

%

Cost more in the long run, more expensive, not give value for money (22.2%), Puts insurance out of some peoples price range (3.2%), Now have to pay 2 premiums (3.2%), Still have to pay the same high premiums (1.6%)

30.2

Nothing wrong with the current system/ keep doing what doing< (14.3%)

14.3

Get better service from one big supplier, too fragmented (11.1%), Country is too small for competition (1.6%),

12.7

A hassle to go and find a new insurer, too much for employers to do (6.3%), Much more paperwork (3.2%)

9.5

Government is losing control, should stay Government controlled (4.8%), Anti privatisation (1.6%), Too many private companies getting in on ACC (1.6%)

8.0

Gone away from original ACC/moving away from the original ethic< (7.9%)

7.9

Been paying too long without benefit< (4.8%)

4.8

The unknown factor/ need more information< (4.8%)

4.8

Needs reforming but this is not the right way< (4.8%)

4.8

Rushed through/ not really thought about< (3.2%)

3.2

Private sector won't do any better (1.6%)

1.6

Base: 18% of respondents who oppose the changes to ACC (n=63); multiple response.

  

STATEMENTS ON REFORMS

Circumstances will vary for different companies but overall how likely do you think it is that ACC reforms will lead to the following. Is it very likely, fairly likely, not that likely or not likely at all?

  

Very

likely

%

Fairly

likely

%

TOTAL LIKELY

Not

that

likely

%

Not

likely

at all

%

TOTAL NOT LIKELY

%

Depends

  

%

Unsure

  

%

POSITIVES

More account taken of the particular circumstances of individual companies

26

43

69

11

3

14

3

14

More incentive for employers to improve workplace safety

29

37

66

17

7

24

2

8

Better service than ACC currently provides

21

40

61

15

3

18

3

19

Lower premiums

13

39

52

22

16

38

2

8

Faster rehabilitation of injured workers

15

35

50

26

9

35

2

13

Fewer accidents in the workplace

10

20

30

37

17

54

4

13

NEGATIVES

More disputes and more work for lawyers

25

40

65

19

5

24

2

9

Under reporting of accidents

15

34

49

27

7

34

3

15

Injured employees will be forced back to work too soon

11

27

38

36

7

43

4

15

  

OPTIONS FOR GETTING ACCIDENT COVER

From 1st July the self-employed will have three options for obtaining work and non-work accident insurance cover.

From a private sector insurer,

From a new State Owned Enterprise which will be competing in the market

From the ACC as it is now.

It is early days but do you think it is most likely you will:

Be ready to switch to a private sector insurer by July 1, or

Wait and see how the market develops before making up your mind, or

Stay with ACC as it is now, or

Choose to insure with the new State Owned Enterprise.

  

MAR 99

%

Wait and see how the market develops before making up your mind

39

Be ready to switch to a private sector insurer by July 1

26

Stay with ACC as it is now

19

Choose to insure with the new State Owned Enterprise

3

None (volunteered)

1

Depends (volunteered)

1

Unsure

11

  

LIKELIHOOD OF STAYING WITH ACC

[Respondents who would "wait and see" how the market develops were asked:]

  

Do you think it is more likely you will eventually end up with a private sector insurance company or stay with ACC?

  

MAR 99

%

Private sector insurance company

47

Stay with ACC

15

Depends (volunteered)

17

Unsure

21

Base: 39% of respondents who would wait and see how the market developed (n=136)

  

INFORMATION SOURCES ON ACC REFORMS

Where do you get most of your information about the changes to ACC? Anything else?

  

MAR 99

%

ACC

43

Direct mail

43

Newspapers

29

Television

14

Word of mouth from others

10

Advertising from insurance companies

9

Trade publications

8

Radio

6

Base: All; multiple response

  

RECALL OF INFORMATION PACK

Do you remember recently receiving an information pack that outlines the ACC reforms to be introduced from 1 July?

  

MAR 99

%

Yes

83

No

14

Unsure

3

  

READERSHIP OF INFORMATION PACK

[Respondents who remember receiving an information pack were asked:]

  

Did you read or skim through this information pack?

  

MAR 99

%

Yes

80

No

20

Unsure

1

Base: 83% of respondents who remembered receiving an information pack (n=291)

  

EFFECTIVENESS INFORMATION PACK

[Respondents who remember receiving an information pack and read it were asked:]

  

How helpful did you find the information pack in explaining the ACC reforms   very helpful, fairly helpful, not that helpful, not helpful at all?

  

MAR 99

%

Very helpful

25

Fairly helpful

47

TOTAL HELPFUL

72

Not that helpful

11

Not helpful at all

4

TOTAL NOT HELPFUL

15

Unsure

13

Base: 80% of respondents who remembered receiving an information pack and read it (n=232)

  

RETENTION INFORMATION PACK

[Respondents who remember receiving an information pack were asked:]

Did you keep this information pack?

  

MAR 99

%

Yes

92

No

5

Unsure

2

Base: 83% of respondents who remembered receiving an information pack (n=291)