Report: Worker's Comp Insurers May Be Pressured into a Hard Market

(parts of this article first appeared in National Underwriter Magazine)

With the current investment environment not benefitting Worker’s Compensation insurers, companies may be pressured into a harder market and thus higher rates as they try to achieve underwriting profits in a line that hasn’t seen combined ratio of less than 100 (the profit line) since 2006.

Even if interest rates rise, the benefit in improved investment returns may be tempered by the corresponding possibility of higher inflation. Historical results have shown that medical inflation often moves in the same direction as general inflation. Rising medical costs would increase Worker’s Comp loss costs.

Everything you read says that Worker’s Comp rates will be rising. However, there are some ways that YOUR BUSINESS can offset those increases to some degree. Remember, decreased frequency of claims, as well as better claims management, leads to a lower Experience Mod factor. With a lower Mod factor comes lower premiums and more credits! YOU really can control your Worker’s Compensation premiums to a degree, and it’s that control that is critical to not only your premiums in the next few years, but your overall operations as well.

Don’t forget- your insurance carrier doesn’t pay for your claims- you do!

Bobby Bland PWCA, CIC
Commercial Risk Service