Boca Raton, FL – A new survey has produced familiar feedback as workers compensation executives express unease about rate adequacy, medical inflation, economic uncertainty, and the shifting workplace and workforce. The National Council on Compensation Insurance (NCCI) recently conducted a comprehensive survey of 101 workers compensation leaders, addressing key issues for 2024.
“Stakeholders continue to comment on the long-term financial health of the workers compensation system,” remarked Bill Donnell, President and CEO of NCCI. “The survey functions as a barometer of industry sentiment and helps NCCI determine which topics become the focus of our research and analytics.”
The survey report highlights four key concerns along with new, emerging topics:
Financial health of the system and rate adequacy
Executives worry about the steady decline in rates and loss costs and other potential risks to the long-term health of the system. NCCI expects a 2023 combined ratio under 100, which would be the 10th consecutive year of underwriting profitability. Strong employment and wages, declining loss frequency relative to premium, and moderate changes in claim severity all contribute to a continuation of declining loss costs. NCCI continually analyzes the data with healthy skepticism in order to identify changes in trends.
Medical costs are rising, causing uncertainty for carriers that are troubled about frequency, severity, and large claims. NCCI analysis shows that medical costs are climbing modestly in workers compensation, medical severity has been moderate in recent years, and fee schedules in most states are mitigating medical cost increases.
Wages have been increasing along with consumer prices. NCCI’s Quarterly Economics Briefing—Q3 2023 shows that the labor market remains robust and the probability of a recession has diminished during the past quarter.
Changing workplace and workforce
The increase in telecommuters, gig workers, and aging workers, along with the worker shortage, are leading carriers to reevaluate workplace risks. NCCI notes there is a generational shift under way in the workforce. NCCI examines one aspect of this shift in a new report on Temporary Disability Benefit Duration.
The annual carrier executive survey report also spotlights emerging issues that may impact the workers compensation system including climate change, expanding legalization of marijuana, artificial intelligence, and the emergence of new safety technology. NCCI’s Annual Insights Symposium 2024 will address many of these emerging issues in depth.
View the full report: NCCI Carrier Executive Top Concerns Report