Comp premiums down 13%: A.M. Best
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Direct written premiums in workers compensation in the first three quarters of 2020 are down 13% over the same period in 2019, according to A.M. Best Co.’s property/casualty market segment report released Wednesday.
According to the Oldwick, New Jersey-based rating agency, stay-at-home orders and government-mandated business closures have tamped down premium levels, with the impact even more pronounced for workers compensation due to declining rates and decreases in payrolls.
The workers compensation segment reported direct written premium of $37.9 billion for the first nine months of 2020, down from $43.4 billion during the first nine months of 2020. However, the workers compensation direct loss ratio held nearly steady at 49.1 for the first nine months of 2020, compared with 49.4 for the same period in 2020, likely due to favorable loss frequency from the lower risk profile due to remote work, and furloughs and layoffs in higher hazard industries, according to the report.
A.M. Best noted that premium declines from higher rates of unemployment and the rebuttable presumption laws making it easier for workers to obtain compensability for COVID-19 that have passed in some states are emerging risks for the industry.
More insurance and workers compensation news on the coronavirus crisis here.
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