Hartford, CT – Insurity recently released its Workers’ Compensation Industry Trends report.
The exclusive research reveals four converging trends related to COVID-19 that are expected to impact insurers’ portfolios in 2021. The study was based on $60 billion in workers’ compensation policy and claims data from Insurity’s proprietary Valen Data Consortium from Q1 through Q3 2020.
The pandemic has exacerbated challenges for the workers’ compensation industry, which has seen loss costs on a downward trend for years alongside climbing expense ratios. This, combined with the findings within this report related to new business, renewals, and expected premium loss, underscores the need for a heightened focus on underwriting excellence so insurers can protect and preserve loss ratios while competing for premium in the current and post-pandemic marketplace.
“Our consortium data reveals what is actually happening on the ground during the pandemic, providing a real-world view of what insurers are up against,” said Kirstin Marr, head of data solutions at Insurity. “It’s clear from our analysis that new business is becoming harder to find while insurers may also be on the hook to return a significant amount of premium upon retrospective audits. Compounding this, investment yields are at all-time lows. This puts adequacy of premium at risk and creates urgency around enhanced risk selection, pricing, and portfolio management practices—not only to safeguard loss ratios, but also to establish competitive differentiation.”
“The trends show insurers facing pressures from three primary areas: a decrease in new business, renewal stagnation, and the potential return of substantial premium, resulting from retrospective audits that reflect pandemic-driven layoffs and furloughs,” said JJ Ihrke, head of analytics and chief scoring officer at Insurity. “With new business quotes down as much as 23% in some industries—underwriting profitability becomes incredibly important to achieve because insurers simply can’t afford to miss on the scarce new business opportunities available.”
Download the report: Insurity: Workers Compensation Industry Trends report
Source: Insurity