Login Register Subscribe
Current Issue

Workers compensation claim frequency continues to decline: NCCI

Reprints

Workers compensation claim frequency continued declining during 2012, after the Great Recession, which may have driven a 2010 frequency spike, according to a National Council on Compensation Insurance Inc. research brief released Thursday.

Lost time claim frequency declined by 5% during accident year 2012, Boca Raton, Fla.-based NCCI found. That comes after a 0.9% frequency decline in 2011 and a 3.8% increase for 2010.

The 2010 uptick marked the first increase since 1997, according to NCCI's brief. Prior to that increase, claim frequency declined at an average rate exceeding 4% annually since 1990.

Several factors may have contributed to 2010's abrupt halt in the long-term frequency, NCCI reports. Workers fearful of losing their jobs during the recession may have postponed filing workers compensation claims, but then became less hesitant as the economy improved.

“While the extent to which this phenomenon has occurred is unclear and cannot be confirmed by NCCI, it may have contributed to the observed increase in claim frequency in 2010,” NCCI's brief states.

NCCI also found that for accident year 2012, average indemnity costs increased 1% while medical costs rose by 3%.

Additionally, NCCI examined events for policy years ending 2007 through 2011 and found that:

• Frequency per payroll declined 16% or 4.3% annually, but leveled off over the latest two years.

• Frequency per payroll declined for all industry groups, most notably in contracting and manufacturing.

• Frequency per payroll declined for all employer sizes, with the largest declines for employers generating more than $100 million in payroll.

• Payroll volume increased by double digits in the oil and gas and health care sectors, while declining nearly 2% for all industries combined.