Issue:

Experience rating is a common feature of workers’ compensation insurance programs across North America and in jurisdictions around the world. It is the principal way in which insurance providers attempt to create incentives for firms to invest in health and safety. Hence, understanding the type, magnitude, and consequences of behavioural effects created by experience rating is critically important to designing programs that promote desirable behaviours and minimize the likelihood of undesirable ones.

Experience rating continues to be a controversial policy lever in the workers’ compensation and work disability policy arena. Development in several jurisdictions suggests that policymakers continue to struggle with designing effective financial incentives in their program. For example, policymakers in Ontario, Canada recently undertook a review of the principal experience rating program in that jurisdiction, in part in response to media coverage of undesirable behaviours possibly being incented by the program in that jurisdiction. The South Australian experience rating program is also being revamped after a period of approximately 20 years. Almost concurrently, New Zealand has introduced experience rating into their disability compensation. The Netherlands also took this bold step several years ago; it introduced experience rating into their disability compensation program in an effort to curb the growing numbers of working age adults on long-term disability. At the European Agency for Safety and Health at Work there are ongoing efforts to identify and promote successful financial incentive programs. These diverse developments from around the world suggest that there is a lack of clarity on how best to incent employers to focus on health and safety, and particularly whether financial incentives such as experience rating are effective.

Objectives:

The objective of this systematic review is to update the evidence on the effectiveness of experience rating of workers’ compensation insurance premiums (both the introduction of, and the degree of) on incenting improvements on workplace occupational health and safety performance.

Anticipated Results:

This study is anticipated to be relevant to the WSIB, and other workers’ compensation authorities in Canada and internationally.

Investigators:

Emile Tompa (Institute for Work & Health), Chris McLeod (University of British Colombia)