Today’s issue of WorkCompRecap features the release of a new AM Best Market Segment report that notes that underwriters of workers’ comp have consistently generated better underwriting profits than other P/C lines of business.
The report found that workers’ comp underwriting remained strong in 2020, despite a 10% decline in bottom-line net premiums written, owing to the substantial drop in payrolls during Q2. The combined ratio of 91.1 in 2020 was a few points higher than in 2019, but still comfortably under breakeven. AM Best also analyzed the overall health of the line through its Workers’ Compensation Composite, which is composed of U.S. companies, including state funds, whose workers’ comp and excess WC net premiums make up 50% or more of total net premiums. Even with the 2020 decline in workers’ comp premium due to the pandemic, the market share of these specialists rose to 26.2% in 2020, up considerably from 16.7% in 2011.