Boca Raton, FL – The performance of the US workers compensation system remains healthy, according to the 2022 metrics that the National Council on Compensation Insurance (NCCI) released yesterday.
Workers compensation premium increased 11% in 2022, highlighting a return to a similar level of premium as 2019, $47.5 billion. Private carriers produced their ninth consecutive year of underwriting profitability with a Calendar Year 2022 combined ratio of 84. It is the sixth consecutive year with a combined ratio below 90 for the workers compensation insurance market.
“Despite an unsettled environment over the past few years, the reality is that workers compensation has had more tailwinds than headwinds influencing results,” said Bill Donnell, President and CEO of NCCI. “Experience tells us that it won’t last forever, and we must be ready.”
“Overall, you see a healthy and strong workers compensation system,” NCCI Chief Actuary Donna Glenn added. “Workers compensation premium is up by 11%, which has essentially made up the ground that was lost during the pandemic.”
Other key insights included:
- Lost-time claim frequency returned to its 20-year trend, declining 4% in the past year.
- NCCI reported a notable rise in severity for 2022 with medical claim severity increasing about 5% and indemnity claim severity rising about 6% year over year. The longer-term perspective indicates this is a manageable rise.
- Workers compensation’s accident year combined ratio is 97% with prior years continuing to experience downward reserve development.
- The workers compensation reserve redundancy grew to $17 billion.
Glenn issued the State of the Line Report at NCCI’s Annual Insights Symposium (AIS) 2023 on May 9 in Orlando, Florida.
Read the free report: NCCI: The State of the Line Report (PDF) and 2023 State of the Line Guide (ncci.com) are available now at ncci.com/AIS.
Source: NCCI