Boca Raton, FL – NCCI recently announced the release of a new Insights Report, COVID-19 and Workers Compensation – What We Know Now, which details COVID-19 claims data reported to NCCI so far and brings the ultimate impact the pandemic may have on WC costs more into focus.
In early 2020, COVID-19 seemed like a potentially significant and disruptive event for the workers compensation (WC) industry. NCCI responded by authoring its white paper, “COVID-19 and Workers Compensation: Modeling Potential Impacts (PDF)” and creating the COVID-19 Hypothetical Scenarios Tool to help the industry evaluate potential direct cost impacts the pandemic may have on WC losses.
Leveraging the COVID-19 claims data that has been reported to NCCI so far, it aimed to bring the ultimate impact that the pandemic may have on WC costs more into focus.
- NCCI has observed $260 million of case-incurred COVID-19 WC losses, excluding self-insureds, for Accident Year 2020 in jurisdictions where NCCI provides ratemaking services.1
- NCCI estimates that COVID-19 claims, excluding self-insureds, have the potential to ultimately result in WC losses exceeding $500 million over the entire duration of the pandemic across jurisdictions where NCCI provides ratemaking services.
COVID-19 Claim Activity
As of year-end 2020, private carriers and state funds reported 45,000 pandemic-related claims to NCCI associated with $260 million in case-incurred losses—an average COVID-19 cost per claim of approximately $6,000. Note: This claim count total reflects those claims with a reported payment or reserve (i.e., a loss or expense reserve).
Relating these 45,000 claims to an estimated 56 million employees who are covered by private carriers and state funds in jurisdictions where NCCI provides ratemaking services, results in a COVID-19 claim frequency of approximately 8 claims per 10,000 workers. For comparison, historical non-COVID-19-related claim frequency values, including medical-only claims, have averaged more than 250 claims per 10,000 workers.2 The relatively low frequency of reported COVID-19 WC claims thus far, mitigates the impact the pandemic could otherwise have had on WC system costs for private carriers and state funds.
The report also goes on to segment claim activity by Industry Section, Claim Type, and Size of Loss.
Read the free report: NCCI: COVID-19 and Workers Compensation – What We Know Now