Boca Raton, FL – NCCI recently released its 2022 Residual Market Management Summary, which provides facts and figures about workers compensation residual market plans and reinsurance pools that are serviced by the National Council on Compensation Insurance.
The content of this year’s report indicates that the residual market continues to be stable and self-sufficient, providing a significant contribution to fostering a healthy workers compensation system. The residual market premium remained at a manageable level in both premium volume and market share, with reasonable combined ratios in recent years ranging from 92% to 105% and averaging 99% for the 10 policy years of 2013-2022.
Combined ultimate written premium for Policy Year (PY) 2022 for all reinsurance pools serviced by NCCI is projected to be $775 million, representing a slight decrease from the ultimate projection of $777 million for PY 2021, representing the seventh decrease in eight years. The net operating results for PY 2022 are projected to produce an ultimate loss of $40 million, representing a combined ratio of 105%. It is noted that these ultimate projections are based on a partially earned policy year and are subject to potential material changes as additional premium is earned and losses are reported for the remainder of the policy period.
On a Calendar Year (CY) basis, including adjustments to prior period incurred loss estimates, 2022 reinsurance pool financial results reflect written and earned premium of approximately $797 million, a net operating gain of $130 million, and a combined ratio of 84%.
For all states in which NCCI provides plan or pool services, including both reinsurance pools and direct assignment experience, total residual market calendar year 2022 premium was reported at $1.2 billion representing a 6.1% market share. This premium volume represents a slight increase from CY 2021, but a market share decrease from 6.2%, and the eighth consecutive year of market share decreases.
Read the full report: NCCI 2022 Residual Market Management Summary (PDF)
Source: NCCI