SIRA’s QBE Audit Shows a System Circling the Drain — Not a System Being Fixed

The latest SIRA audit into QBE’s handling of workers’ compensation claims has been reported as a moment of accountability — a regulator stepping in, identifying gaps, and demanding improvements. insurancebusinessonline.com.au

But anyone who has lived through this system, worked inside it, or studied its behaviour over the past decade knows the truth:

This is not reform. This is a system circling the drain, and the audit reads like a controlled PR manoeuvre designed to make it look like something is being fixed when nothing fundamental has changed.

Because despite the headlines, one thing remains consistent:

Injured workers are still invisible in every one of these reports.

1. What the audit actually says

In May 2025, SIRA audited QBE’s claims management performance for both: sira.nsw.gov.au+1

• the Nominal Insurer (NI) – covering most private-sector employers via icare

• the Treasury Managed Fund (TMF) – the self-insurance scheme that covers NSW government agencies

SIRA reviewed 50 active claims (20 NI claims and 30 TMF claims) and found: sira.nsw.gov.au+1

• Gaps in wage reimbursement controls for large employers

• Poor or missing handover documentation when case managers changed

• Delayed injury notifications from TMF agencies (sometimes weeks or months late)

• Missing or weak injury management plans and infrequent updates

• Data quality problems, including incorrect “date claim made” and inconsistent work status codes

The same audit notes that icare manages around 83% of all workers’ compensation claims in NSW, and uses a panel of Claims Service Providers (CSPs) like QBE to manage day-to-day claims. sira.nsw.gov.au+2sira.nsw.gov.au+2

All of that is factual.

What’s missing is the most important element: the human impact.

2. An audit about optics, not outcomes for injured workers

SIRA’s report is framed around:

• compliance with guidelines

• adherence to wage reimbursement agreements

• documentation of handovers

• correct use of data fields

It does not ask:

• Did any worker go without pay because of these failures?

• Did delays in liability decisions or missed treatment approvals worsen someone’s mental health?

• Did turnover of case managers and poor handovers contribute to deterioration, self-harm risk, or family breakdown?

This is happening in a system where:

• More than 102,000 people a year are supported for workplace injuries in NSWParliament of NSW

• Psychological injury claims are rising sharply and now account for around 12% of claims but 38% of total scheme costs, with average costs nearly doubling in five years NSW Government+2Parliament of NSW+2

And yet the audit does not attempt to measure harm.

SIRA audits processes. It does not audit suffering.

3. Quietly removing QBE — and pretending that’s the fix

QBE had already been removed from the TMF panel before this audit became public. From 3 October 2025, QBE no longer provides claims management services for NSW government agencies under the TMF; all those claims were transferred to other providers. QBE DEV+1

The audit now retrospectively justifies that exit with phrases like:

• “concerns about wage reimbursement processes”

• “insufficiently documented handovers”

• “data quality issues”

None of those problems are unique to QBE. They are systemic features of the NSW workers’ compensation model.

By treating QBE as the problem, the system gets a neat story:

But the architecture of the scheme remains unchanged.

4. A hybrid model that outsources risk — and fails everyone

This is the part the public rarely hears.

NSW doesn’t operate a simple state insurer model. It runs a hybrid:

• The Nominal Insurer (NI) and TMF are statutory schemes managed by icare and overseen by SIRA. iCare NSW+2sira.nsw.gov.au+2

• The actual claims are handled by outsourced Claims Service Providers (CSPs) — companies like QBE, EML, Gallagher Bassett and others. GallagherBassett US+2EML+2

So we have:

When something goes wrong, everyone can point at someone else:

• icare can point at the CSP

• the CSP can point at icare’s contracts or funding

• SIRA can point at “the scheme” and issue another supervision plan

• Ministers can point at “rising costs” and “complex claims”

This hybrid model is supposed to bring “contestability” and “efficiency”.

What SIRA’s QBE audit actually demonstrates is fragmentation and chaos:

• multiple handovers

• inconsistent standards

• data definitions that differ between providers

• transitions between CSPs that destabilise injured workers’ lives

It is not working. The audit proves that — even though it doesn’t admit it.

5. A system losing basic governance control

If you strip away the neutral language, SIRA’s findings are the kind you see in a system that is losing control of its own operations:

• Case manager churn so high that handovers are often missing or poor sira.nsw.gov.au+1

• Provisional liability dragged out without timely move to full decisions

• Injury management plans absent in a third of significant injuries, and rarely updated in line with changing capacity or treatment

• Delayed notifications by TMF agencies, sometimes months late, undermining early intervention

• Wage reimbursement schedules coming in late or inconsistently, with limited checks that payments match statutory entitlements

• Data fields (like “date claim made”) used in ways that don’t align with the Workers Compensation Guidelines

These aren’t minor administrative issues.

Taken together, they describe a scheme where neither icare nor its CSPs have full visibility or control over:

• who is being paid

• whether they’re being paid correctly

• how quickly decisions are made

• whether case plans are clinically meaningful

• or how many of these failures are directly harming injured workers

That’s not a “mature” system needing fine-tuning. It’s a system on the edge of failure.

6. “Costs will go up for employers” — but where is the outrage about abuse?

You hear it in every ministerial statement:

Treasury and the government have repeatedly warned of:

• premium increases of up to 36% over several years News.com.au+2The Guardian+2

• an extra $1 billion a year in premiums for businesses and not-for-profits if reforms fail Daily Telegraph+1

Business groups, predictably, are focused on those numbers.

But here’s the striking silence:

Instead, employers are fed a simple narrative:

• Psychological claims are exploding.

• The system is too generous.

• Without tightening access, your premiums will soar.

The structural issues that actually drive cost — poor claims management, churn, delays, fragmentation between CSPs and icare — are treated as peripheral. Yet SIRA’s own audits and Treasury’s own reviews point to claims management performance as a core risk to the scheme. sira.nsw.gov.au+2Parliament of NSW+2

In other words:

No one pays premiums to have people abused. But that is effectively what is happening.

7. The political story sitting behind the audit

All of this lands in a very specific political context:

• Psychological injuries are now one of the fastest-growing and most expensive parts of the scheme. NSW Government+2Lockton+2

• The scheme has been reported as running a multi-billion-dollar deficit, with only cents in the dollar set aside for future liabilities. Daily Telegraph+1

• The Minns government has proposed reforms that would sharply restrict access to compensation for psychological injuries — lifting whole-person impairment thresholds, narrowing eligibility, and forcing some workers into court to prove harassment or bullying. The Guardian+2The Guardian+2

Those pushing the reforms frame them as necessary to save the system and protect employers from ruinous premiums. Those opposing them point out they will make it “virtually impossible” for many workers with genuine psychological injury to claim at all. The Guardian+1

Against this backdrop, SIRA’s QBE audit is more than a routine review.

It is part of a broader performance:

• Look, we’re tightening oversight.

• We’ve audited the provider and found issues.

• We’re moving to new CSPs.

• We’re acting on data quality.

It creates the impression of control, just as the government is asking Parliament to sign off on reforms that will shift the burden of a failing system back onto the injured.

8. The most confronting truth: the problem isn’t QBE — it’s the system

You could swap QBE’s logo for EML, Allianz, DXC, Gallagher Bassett, or any other CSP in NSW, and the findings in this audit — turnover, handover gaps, inconsistent plans, data issues — would almost certainly look similar. sira.nsw.gov.au+2sira.nsw.gov.au+2

Because the problem is not one provider.

The problem is:

• a hybrid design that fragments accountability

• a claims culture that prioritises cost containment over recovery

• a regulatory mindset that measures compliance not harm

• and a political narrative that blames injured workers and “expensive psych claims” instead of confronting leadership failure and system design.

• And most importantly, the division in 2015 of the old Workcover, which already was flawed into three agencies - SIRA, icare and Safework NSW. It was not adequately thought through, that much is obvious by the legislative chaos it caused and, we are living with the conse

  quences, while the government tries to fix the 'bloody mess' but still peddles rising premiums for businesses as an excuse to rid the system of psychological injuries. Why? Because the political exposure of the harm they have caused to the injured ad their families is too great.

Bluntly: SIRA’s QBE audit isn’t a sign that the system is being fixed.

It’s a sign that the system is circling the drain — and those in charge are trying to manage the optics on the way down.