Report documents the turbulent times of the worker’s comp market
The National Council on Compensation Insurance (NCCI), the largest database of worker’s compensation insurance information in the U.S., has released the latest edition of its annual “State of the Line” report concerning worker’s compensation insurance in the country. The report covers 2011 and notes that premiums grew in that year. This growth has been countered by the apparent stagnation of the market, however. The report suggests that the combined ratio for the worker’s compensation line in the U.S. remains unsustainable.
Premiums are up in 2011, though combined ratio remains at unsustainable levels
According to the report, worker’s compensation premiums grew by 7.4% in 2011. The NCCI notes that this is a promising sign for the insurance industry, believing it to be a sign of strong growth despite the changing regulatory landscape that has brought more challenges to insurance companies. The organization notes that there are signs that the industry has made some progress over 2010, but that combined ratio has held firm at 115 for two years running. This could mean trouble for worker’s compensation insurance providers as it is creating worrisome turbulence in the U.S. market.
Economic troubles linked to challenges in the market
The NCCI cites ongoing economic turmoil as one of the key factors contributing to the stagnation of the market and the fears gripping the worker’s compensation insurance industry. Because worker’s compensation coverage is closely linked to the employment and labor markets, it is acutely sensitive to changes in the nation’s economy. Though the U.S. economy has shown signs of recovery from the financial disaster that begun in 2008, the NCCI claims that combined ratios continue to be at levels that are unsustainable for many of the country’s worker’s compensation insurance providers.
Consistent results may be a good sign
Good news may come in the form of the unchanging results from 2010 to 2012. Though the numbers may not bode well for the worker’s compensation insurance sector, the fact that they have remained unchanged for so long could be considered a positive sign. The NCCI notes that the results could have been far worse than they are, which suggests that the market may soon turn around as the economy begins to show promising signs of recovery.
