Workers’ Compensation System Shows Financial Strength and Lower Claim Frequency

The performance of the workers’ compensation system remains strong, according to a new State of the Line Report from the National Council on Compensation Insurance (NCCI).

2023 was another profitable year for workers’ compensation, with U.S. private carriers producing their 10^th consecutive year of underwriting profitability with a combined ratio of 86 (a 2% increase over 2022). This is the seventh consecutive year with a combined ratio below 90 for the workers’ compensation insurance market. This profitable underwriting result for workers’ compensation insurance is in contrast to the overall property and casualty combined ratio for private insurers, which is at 102 for 2023.

Furthermore, the report revealed that U.S. private insurers’ net written premiums for workers’ compensation insurance increased from $42.5 billion in 2022 to $43 billion in 2023. This represents a 1% increase in net premiums written for workers’ compensation insurance.

“The overall numbers for workers’ compensation show a financially healthy system.” 
-Chief Actuary Donna Glenn, NCCI 

NCCI estimated that lost-time claim frequency declined by 8% in the past year, more than two times the size of the long-term average decline. For 2023, severity changes were considered moderate, with a 2% increase in medical claim severity and a 5% increase in indemnity claim severity. “The workers’ compensation system has unique features that have differentiated us from other commercial lines in terms of overall performance during the past several years,” said NCCI President and CEO Bill Donnell. “However, there are key questions ahead related to issues such as frequency change and medical cost inflation.” Click here

 for more information about the report. To discuss your organization’s workers’ compensation needs, contact us today.  

The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2024 Zywave, Inc. All rights reserved.