As has been seem two major insurance systems operate in relation to accident compensation in New South Wales: compulsory third party motor vehicle insurance and workers' compensation insurance. A study of the available statistics, which is undertaken in more detail in the Issues Paper, reveals some useful information.

Third Party Insurance

• In 1980-1981 premiums received by the Government Insurance Office (which transacts 98% of the compulsory third party insurance business in New South Wales) amounted to $311 million, a three- fold increase since 1974-1975.
• In the same year, claims paid by the Government Insurance Office totalled $229 million, also a three- fold increase since 1974-1975. Claims incurred for 1980-1981 (that is, the estimated long-term cost of claims arising during the year, taking into account that they might not be finalised for many years) amounted to $454 million.
• The number of very large damages settlements and verdicts in third party insurance cases has increased dramatically. In 1980, the Government Insurance Office participated in 160 settlements and verdicts in which the amount paid to the claimant exceeded $ 100,000. In 1981 the number of such settlements and verdicts had increased to 272. Again, in 1980 there were 10 settlements and verdicts over $500,000, of which only one exceeded $1 million. In 1981 the corresponding figures were sixteen and eight.
• Since January 1977 third party premiums in New South Wales have been tied by statute to the Consumer Price Index, despite the fact that the amount paid in claims has increased at a faster rate than the increase in prices generally.

Workers' Compensation Insurance

• In 1979-1980 the premiums received by licensed insurers and attributed to licensed self-insurers in New South Wales totalled $413 million. Primarily because of heavy discounting of premiums by insurers, this figure had not materially increased since 1977-1978.
• The compensation paid by insurers and self- insurers under the Workers' Compensation Act has increased rapidly from $91 million in 1974-1975 to $286.5 million in 1979-1980. In addition, in 1979-1980, $35 million was paid in common law damages claims in respect of industrial injuries.
• As noted earlier, concern has been expressed in recent years about the adequacy of reserves maintained by licensed insurers to meet outstanding liabilities. During 1979-1980 and 1980-1981 premiums collected by licensed insurers were less than the claims paid in those years.