Workers Compensation: State of the Risk

Workers Compensation

In recent years, workers compensation insurance has been the most profitable property/casualty line of business, having experienced its sixth consecutive year of combined ratios under 90 and its ninth straight year of underwriting gains. While the broader industry has suffered, workers comp has benefited from a generally strong economy and, in particular, strong growth in payrolls.

• Claim frequency is the main cost driver in workers comp. Due to improved workplace safety and increased use of automation, frequency has been low.
• Unlike claim frequency, medical and indemnity severity have increased about 60 percent over the past two decades.
• Current trends bode well for workers comp, but the industry needs to recognize and be responsive to emerging issues – for example, increased introduction of mental-injury bills in state legislatures.

As of July 27, 2023

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