Hartford, CT – The Workers’ Compensation industry is at an inflection point in its performance, according to a new study by Conning, Inc.
“In 2015 the Workers’ Compensation industry posted exceptional results, including a reported loss ratio that was the lowest we have seen since 1995,” said Jerry Theodorou, Vice President, Insurance Research at Conning. “Workers’ Compensation premiums have been rising for the past six years as well, boosted by growth in payrolls from the expanding economy. However, these stellar results are not likely to continue, as 2016 rate filings indicate a softening market in the face of rising medical costs.”
The Conning study, “Record Profitability in Workers’ Compensation Insurance: Strategies for Continued Success” analyzes performance data over ten years for the national multilines, regionals, state funds, and specialist Workers’ Compensation Insurers separately to identify the long term outperformers. The study also presents findings from Conning’s 2016 Workers’ Compensation Survey sent to a cross-section of the industry.
“Workers’ Compensation insurers have seen substantial improvements in recent performance thanks to years-long focus on safety and loss prevention programs, medical loss containment and return-to work initiatives,” said Steve Webersen, Head of Insurance Research at Conning. “While these have all benefited the industry, it is increasingly clear that workers’ compensation insurers are now facing a turn in fortune. We see pressures in investment income, the rate environment and medical costs driving a significant deterioration in combined ratio performance over the next few years. Those workers’ compensation insurers that will focus on protecting underwriting performance above growth will fare best in the coming years.”
“Record Profitability in Workers’ Compensation Insurance: Strategies for Continued Success” is available for purchase from Conning by calling (888) 707-1177 or by visiting www.conningresearch.com.