​LGIS entered 2025/26 from a position of strength and a renewed focus on managing rising claims and member resilience. Membership retention was 100% at renewal, investment returns and disciplined portfolio management produced operating surpluses above budget, and capital ratios strengthened — allowing continued returns to members through reinvestment in member programs.

Financial performance

Overall financial results remain healthy with improved reserves and balance‑sheet resilience. Last year's surplus was retained in the Scheme to bolster capital reserves and support members through funded risk programs. A decision on any surplus for 2025/26 is still being considered by the Board.

Portfolios, in the main, have performed well. Property was materially impacted by Tropical Cyclone Narelle, while WorkCare remains under pressure with rising claims numbers and average claims costs.

The Scheme takes a long-term, 10-year horizon, approach to investments which has positioned us well to withstand volatile global pressures.

Workers' compensation in the spotlight

WorkCare is under significant pressure with total claims costs continuing to grow. This is a challenging area, and members must work collaboratively with LGIS to actively manage risks, intervene early and proactively work to resolve claims.

Musculoskeletal disorders (MSD) remain the dominant WorkCare exposure, accounting for 45% of claims and prompting the Board to fund an additional injury‑prevention consultant in 2025 to expand strategic prevention work.

At the same time psychosocial risks have risen; psychological injuries are increasing in frequency, are more complex to manage and drive disproportionate cost — roughly 7% of claims but around 15% of total claim costs. It will be an area of focus for both LGIS and members going to 2026/27.

Member engagement and risk services

This year has once again seen excellent collaboration with members as LGIS has delivered a variety of workshops and services to both regional and metropolitan members.

Scheme‑funded risk programs were expanded with priorities including infrastructure and asset risk, workplace safety, and psychological safety.

We've also invested in improvements to claims handling and digital capability to speed turnaround times and simplify member interactions.

Overall, our near‑term focus is contribution stability, stronger member governance (asset declaration and renewal processes), further investment in prevention programs, and continued enhancements to claims and digital services. Managing WorkCare and liability cost pressures is a priority to protect member capacity and keep protection sustainable