ORLANDO, Fla. — The workers compensation market is “balanced,” with combined ratios for private comp insurers falling 14 percentage points since 2011, the National Council on Compensation Insurance Inc. said Thursday.
The findings were announced during the NCCI's 2014 Annual Issues Symposium in Orlando. The Boca Raton, Florida-based rating and research organization also said private workers comp insurers had a combined ratio of 101% in 2013, down from 108% in 2012 and 115% in 2011.
“We are finally starting to see an industry in balance with these results,” NCCI President and CEO Steve Klingel said in a statement. “Today, industry costs are largely contained, claims frequency continues to decline, and the system in most states is operating efficiently. In short, the market is operating as it should on behalf of most stakeholders.”
NCCI chief actuary Kathy Antonello said in a presentation that workers comp premiums for private insurers grew 5.4% year-over-year to $37 billion in 2013, driven largely by payroll growth and increases in insurer pricing.
She also said NCCI estimated an $11 billion reserve deficiency for private comp insurers in 2013, down from an estimated $13 billion deficiency in 2012.
Both Mr. Klingel and Ms. Antonello said various factors could generate uncertainty about recent improvements in the workers comp market. These include the impact of federal health care reforms on workers comp, the potential expiration of the federal terrorism insurance backstop and a continued low-interest-rate environment that could affect insurers' investment income.