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US Workers’ Comp Line Still Showing Strong Profits, Lower Claim Frequency



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Net written premium in the U.S. workers’ compensation insurance market grew by just 1% from 2022 to 2023, a far smaller percentage than most other property/casualty lines.


However, the workers’ compensation line remains the most profitable segment, with a combined ratio well under 100, according to the National Council on Compensation Insurance (NCCI), which provides analysis and recommendations on loss costs and rates in 38 states. The NCCI’s Annual Issues Symposium runs through Wednesday in Orlando, Florida.

“The overall numbers for workers compensation show a financially healthy system,” Donna Glenn, NCCI’s chief actuary and lead presenter at the conference, said in a statement.


The combined ratio climbed slightly for calendar 2023, to 86, something NCCI actuaries attributed to a slight bump in the average loss ratio nationwide. Last year was the 7th consecutive year with a combined ratio below 90, Glenn noted.


Net written premium for workers’ comp private carriers grew from $42.5 billion in 2022 to $43 billion in 2023. For the P/C industry as a whole, net premium climbed by more than 10%, to $851 billion, the NCCI’s State of the Line report shows.

The workers’ comp line reserve redundancy grew to $18 billion.


Other highlights from the symposium:

  • Lost-time claim frequency declined by 8% in the past year. Frequency continues its long-term decline.
  • Workplace safety has contributed to a steady decline in injuries over the last two decades, helping to produce annual rate decreases in most U.S. states. Safety technology is now expanding into more industries and evolving into a broader range of applications. “It is clear that safety technologies will be a vital part of future safety initiatives. They may even be a gamechanger for evaluating and improving workplaces and reducing injuries,” said Damian England, executive director of affiliate services for NCCI.
  • Severity changes were considered moderate for 2023 with increases of 2% for medical claim severity and 5% for indemnity claim severity.
  • Inpatient cost per claim rose modestly. That’s largely from a decrease in utilization of 22% since 2012, said Raji Chadarevian, executive director of actuarial research at NCCI. “This is fueled by a dramatic drop in admissions and a shift of surgeries to an outpatient setting. By contrast, inpatient prices have grown by more than 50%.”
  • Since 2012, a 24% decline in pharmacy costs has come from decreased opioid prescribing and a shift to generic use, which has led to savings in direct pharmacy expenditures and in workers compensation settlements, said Jon Sinclair, director and actuary.
  • Payroll increased by about 6% in 2023 – 2% from employment and 4% from wages.

Profit Loss
Workers’ Compensation


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