Boca Raton, FL – At its Annual Issues Symposium (AIS) in May 2019, NCCI presented the State of the Line Report—a comprehensive account of financial results for the workers compensation (WC) line of business.
The results presented at AIS 2019 reflected the most up-to-date data available at the time, including NCCI’s preliminary estimates for Calendar Year 2018. In its latest report, NCCI provides updated results for 2018, as well as preliminary estimates for Calendar Year 2019.
For Calendar Year 2018, NCCI estimated WC premium volume net of reinsurance to be $43.2 billion for private carriers. The updated data reported by the industry indicates a slightly higher result of $43.3 billion. This is almost a 9% increase in net written premium (NWP) over 2017.
NCCI has since evaluated the data reported as of mid-year 2019 to provide a full-year, private carrier written premium volume estimate for Calendar Year 2019. While still early and subject to revision, NCCI’s analysis indicates a decrease in NWP of 3.9% to $41.6 billion for private carriers.
Net Written Premium
Prior to 2018, increased utilization of offshore reinsurance stalled NWP growth. Driven by the additional tax burden on business transferred to offshore affiliates imposed by the Base Erosion Anti-Abuse Tax (BEAT) of the Tax Cuts and Jobs Act of 2017, NWP grew by $3.5 billion in 2018. While the BEAT’s residual effect and the strong economy may place upward pressure on 2019 NWP, the recent decreases in rates/loss costs are likely to more than offset these factors.
Changes in rates/loss costs impact premium growth and are reflective of several factors that impact system costs, such as changes in the economy, cost containment initiatives, and reforms. NCCI expects premium in 2019 to decrease by 10%, on average, as a result of rate/loss cost filings made in jurisdictions for which NCCI provides ratemaking services.
Read the full Insights report: NCCI 2019 Workers Compensation Financial Results Update