Comp underwriting profits top property/casualty lines in 2020
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Workers compensation held its reign over other property/casualty lines on underwriting profits in 2020, A.M. Best reported Wednesday.
Underwriting results of workers compensation insurers remained strong in 2020, despite a 10% decline in bottom-line net premiums written, attributed to a significant drop in payrolls during the second quarter of the year, according to the report.
Researchers note a decline in premium correlated to an increase in expense ratios that did not overly dampen underwriting earnings.
As the line most sensitive to economic cycles, according to A.M. Best, comp is expected to continue to experience the impact of the pandemic over the long term. Researchers note some favorable short-term impacts of the pandemic on the workers compensation segment, such as declines in fraud, workplace accidents and defense costs, will likely be outweighed by the negatives of economic and financial market concerns, along with the possibility of significant claims latency, as the long-term health effects of the virus emerge.
In its analysis of the overall health of the workers compensation line of business, even with the decline in premium, the market share of this group rose to 26.2% in 2020, up considerably from 16.7% in 2011.
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