Boca Raton, FL – Last Week, the National Council on Compensation Insurance (NCCI) held its Annual Issues Symposium (AIS)—The Future@Work in Orlando, FL.
This Year’s Word: Connecting
This year’s event opened with NCCI President and CEO Bill Donnell emphasizing the importance of connecting during times of constant change. Before an audience of more than 900 top carrier executives, regulators, and stakeholders, Donnell spoke of the work, the worker, and the workplace of the future with his focus on understanding how those dynamics might shape the workers compensation industry.
As is tradition at AIS, Donnell revealed this year’s word—Connecting—to describe his vision of a path forward for the workers compensation industry to successfully advance in today’s change-driven environment.
“This year marks the 30th anniversary of NCCI’s Annual Issues Symposium. On such a historic occasion, we can’t help but look back and ask ourselves, what has changed since our first AIS event? Notably, the health of the workers compensation system is much stronger,” Donnell said. “But what we are most proud of is what hasn’t changed—our industry’s commitment to serving the employers and workers of this country.”
During the event, Donnell shared key indicators of industry results. Preliminary 2017 private carrier net written premium is $39.8 billion, and the preliminary 2017 pretax operating gain percentage is 23%.
Donnell concluded his remarks with a vision of what success will look like when the workers compensation system is able to connect to the work, workers and workplace of the future; “Our success will ultimately be measured by how we embrace technology to deliver our services and positively impact workplace safety and return-to-work efforts,” he said.
State of the Line
Following Donnell’s remarks, NCCI’s Chief Actuary Kathy Antonello, FCAS, FSA, MAAA, delivered the company’s highly anticipated State of the Line Report, which provided the audience with a detailed description of 2017 industry results, market indicators, and trends.
As presented in this year’s State of the Line Report, the workers compensation Calendar Year 2017 combined ratio for private carriers was 89%. This is the fourth consecutive year that the workers compensation line of business has posted an underwriting gain. Total market net written premium volume declined slightly in 2017 to $45 billion.
“The Calendar Year 2017 combined ratio of 89 brought unprecedented underwriting gains to the workers compensation industry,” said Antonello. “The underlying loss ratio of 49 was the major contributor and a historically low watermark. It’s clear that private carriers are supporting conscientious underwriting while interest rates remain low.”
On an accident-year basis, the industry-reported 2017 workers compensation combined ratio was 99%. NCCI expects this accident year’s combined ratio to develop favorably over time.
Other market indicators and trends highlighted in NCCI’s 2018 State of the Line Report included the following:
- The overall reserve position for private carriers improved in 2017. NCCI estimates the Year-End 2017 reserve position to be a $1 billion deficiency—down from $5 billion in 2016.
- Average lost-time claim frequency across NCCI states declined by 6% in 2017, on a preliminary basis. A similar percentage decline was observed in 2016.
- In NCCI states, the preliminary 2017 average indemnity and medical accident-year claim severities both increased by 4% relative to their corresponding 2016 values.
- The workers compensation Residual Market Pool premium volume declined to approximately $1 billion during 2017, while the average residual market share remained stable at 8%.
A copy of the “State of the Line Guide” is available here: NCCI State of the Line Guide (PDF)
For more information about NCCI’s State of the Line Report, visit ncci.com or email firstname.lastname@example.org.