Today’s edition of WorkCompRecap, combined with news released last week and this week by two of the larger workers’ compensation insurers in the U.S., present a very troublesome glimpse into the near term future of workers’ compensation.
Last week the CEO of American International Group (AIG), appearing live on CNBC, made the comment that AIG was going to be cutting back on their workers’ compensation exposure due to some unrealistic pricing in the marketplace.
Then, yesterday, Liberty Mutual CEO Edmund “Ted” Kelly called workers’ compensation coverage currently being sold by insurers, already largely unprofitable while inflation is low, a “time bomb” that will become even more costly for insurers when inflation shoots up.
And now today, somewhat in conflict with the statements above, news breaks that California Insurance Commissioner Steve Poizner had rejected -for the third consecutive time – a filing submitted on behalf of insurers by the Workers’ Compensation Insurance Rating Bureau (WCIRB) seeking a rate increase of almost 28%.
And finally, you have a U.S. House Committee hearing testimony about impairment ratings and cost shifting FROM workers’ compensation to Medicare and Social Security Disability.
Sounds to me like we are in for some very challenging market conditions in the months and years ahead.
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Have a good weekend.
Patrick J. Sullivan
Managing Editor
WorkCompWire
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