In the July 2023 Insurance Journal article, AM Best discusses the evolving conditions for workers’ compensation insurers and their potential impacts. In 2022, workers’ compensation insurers performed better than other U.S. property/casualty (P/C) commercial sectors, largely due to a decrease in workplace accidents and reduced fraudulent claims, as reported by AM Best. The insurance sector benefited from favorable prior year loss reserve development, which led to fewer claims over time. While prices in this sector decreased since 2015, there was a mild increase during the post-pandemic period of 2020-2021.

Key points from this article include:
The combined ratio for the workers’ compensation segment was 87.8 in 2022, significantly better than the P/C segment’s 102.4.
With premiums based on payroll, the segment saw benefits from the largest wage growth in the U.S. in over 25 years and robust job growth.
While medical and compensation severity rose, the growth in wages helped maintain the claim severity. Direct premiums written increased by 9% year-over-year in 2022, with a further increase of 4.7% in the first quarter of 2023.

However, challenges like inflation and rising wages could increase claim severity and potentially impact future results. Experts anticipate wages and healthcare costs to surpass inflation rates in the coming year, possibly affecting the underwriting results due to unexpected claims from previous years.

Don’t let work-related injuries or accidents put your life on hold! Despite safety measures in place, mishaps can still occur. At McIntyre, Donohue, Accardi, Salmonson, & Riordan, LLP, we understand the complexities of worker’s compensation, and we’re here to champion your case. With our expert legal team by your side, you can focus on recovery while we fight for your rights. Ready to take control? Give us a call at 866.557.7500

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Source: AM Best | Insurance Journal | July 18, 2023 • “Workers’ Compensation Remains Profit Engine for U.S. P/C Insurers”