Today’s issue of WorkCompRecap features the release of a new report from AM Best that examines the condition of the workers’ comp market, which has averaged $4.8 billion in annual underwriting profit in the last five years and totaled almost $24 billion in that time.
In its new Market Segment Report, “Workers Compensation Generates Solid Profits but the Future Remains Uncertain”, Best notes that workers’ comp has recently achieved a level of profitability unmatched by any of the other major property/casualty lines. As the frequency of claims continues to decline, the segment’s net loss ratio has ranged from 45.4 to 49.0 in the most recent five-year period, and the combined ratio remained within the range of 86.2 and 92.2 during the period. Best noted although net income remains strong, it has not been growing, even as policyholders’ surplus has, which has led to a drop in after-tax return on equity the past two years. A market briefing webinar will also review the state of the market and its trends.