As we head towards the end of the financial year, we're busily preparing terms for 2025/26 membership. Thank you to all members who have actively engaged with the renewal process, providing us with key updates on business requirements and operations. This time of year, is also the perfect time to stop and reflect on the Scheme's performance over the past twelve months.

2024/25 is predicted to finish well ensuring the ongoing delivery of sustainable long-term protection to the Western Australian local government sector. The year has not been without challenges, especially in workers' compensation, but the Scheme's prudent financial management has ensured a good position for the sector.

Financial results

LGIS projects a financial surplus for 2024/25. This is good news for members and the Scheme ensuring that we are well placed to meet the evolving and growing risk exposure of the local government sector.

In 2024/25 our independent scheme actuaries, Scyne, completed deep analysis of the Scheme and sectors' exposures and the capital required to be able to respond. Claims performance, with an increase in costs and complexity, across many areas of cover points to a need for increased capital capacity to meet the sector's growing need.

Our actuaries recommended that we retain capital in the range of 1.5 to 1.9 times the Minimum Capital Requirement (MCR). The Scheme commenced the year with capital below the target range and the projected surplus is anticipated to assist in meeting the capital requirement. It's for this reason that the Board has decided to retain the 2024/25 surplus.

Our investments are performing well and we expect a positive result for the end of the year.

Managing your Scheme

Our financial position continues to experience expenditure pressure; the nature of our business is volatile, and the sector's claims performance has been concerning on several fronts.

The WorkCare portfolio remains in the spotlight with rising claims costs. A significant contributor to rising workers' compensation claims costs was the new Workers Compensation and Injury Management Act 2023 (WA) which substantially increased worker entitlements.

Our Liability, Property and Motor portfolios have also experienced escalating claims costs with supply chain delays and replacement costs growing faster than inflation. Forecasts indicate that the construction and automotive sectors will continue to be constrained in the coming year with labour force challenges and supply chain delays. That said, all funds are expected to have performed well in 2024/25, but witnessed development on prior periods, with Liability incurring significant increases on the back of bushfire and catastrophic injury losses.

More information

Full details of LGIS 2024/25 financial results will be published in the companion reports 'A Year in Review' and 'Annual Financial Report.' In the meantime, if you have any questions, please speak to your LGIS Account Manager.