Oldwick, NJ -(BusinessWire)- In its first of four “First Monday” episodes, A.M. Best’s Senior Financial Analyst W. Dolson Smith says increased payrolls, along with higher premium rates and more stringent underwriting, has led to a fourth consecutive year of growth, based on net premiums written, in the U.S. workers’ compensation residual market.
The U.S. competitive state compensation funds have been on a solid run in recent years. Seven of the 19 state funds have workers’ compensation market shares of at least 50% in their respective states, and overall these state funds have substantially improved. Smith attributes this improvement to the substantial growth that has taken place over the last four years. “Three factors are responsible for the recent growth: improved pricing, greater macroeconomic activity and due to hardening pricing employers are seeking out state funds to a greater degree.”
Additionally, concerning this week’s American Association of State Compensation and Insurance Funds Annual Conference, Smith states, “A.M. Best will be looking for the attendees to discuss workers’ compensation, the exposure of insurance companies to terrorism and the potential for state funds to loss their tax exemption by legislation at the federal level.”
The remaining “First Monday’ episodes will focus on interviews conducted with A.M. Best’s Director of Analytics Catherine Thomas and Managing Director of Analytics Stefan Holzberger on how traditional business models in the London market are threatened by changing market dynamics and economic uncertainty; how London’s standing as a key global insurance center would be diminished if the United Kingdom were to exit the European Union; and how market conditions and the looming start of Solvency II have prompted European insurers to increasingly tap capital markets. “First Monday” is A.M. Best’s monthly program featuring commentary by the company’s leading analysts.
Click here to watch the free video: A.M. BestTV: US State Funds Ride Market Momentum