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Some safer bets in risk, benefit management predictions


Making predictions is a tough game to play. People have a tendency to remember the ones you get wrong rather than the ones you get right — everyone remembers that the Chicago Tribune's political analyst, with some help from pollsters, got Dewey Defeats Truman wrong in 1948 but not that he correctly predicted four out of five of the previous elections.

More recently, the CIA has been subjected to some ribbing for predictions it made in 2000 about what the world would look like in 2015. Thankfully, its prediction that AIDS and famine would lead to population declines in Africa was off the mark, and the continent's population has grown significantly. It also suggested that a unified Korea could become a regional power in Asia, but that had not happened when we closed out the year last week — at least not before this column went to press.

In other areas it made the right call — the transformational power of the Internet and the increasing environmental problems of developing nations. While hindsight is 20/20, it's fair to say that the agency was not exactly chancing its arm with some of its other correct predictions — the world's population would grow and people would live longer.

Being the cautious type, I'm more comfortable with safer bets, which is why when it comes to the core areas that Business Insurance covers, I'm going for the more predictable predictions.

First off, risk managers are going to continue to enjoy a buyers market. Insurers are well-capitalized after years of low catastrophe losses, many are posting underwriting profits, reinsurance is cheap and plentiful. About the only events that could change the direction of pricing would be a colossal insured catastrophe or massive consolidation in the sector. While it's impossible to rule out a mega-loss, the consolidation trend we are witnessing has not yet reached the point where sellers of insurance are in the ascendancy.

On the workers comp and safety front, employers will face increased scrutiny and citations from the U.S. Occupational Safety and Health Administration. As we report on page 1, OSHA has become increasingly aggressive in its pursuit of employers whom it deems to have unsafe working environments. And it is much more willing to use the full range of its powers to pursue employers.

On benefits, I'm willing to go out a little further on the limb and predict that the Cadillac tax will be repealed. It may not happen in 2016, but the delay in applying the tax that was approved last year coupled with the departure of President Barack Obama after the next election may signal the end of the measure, which was included in the health care reform law, the president's signature law. Opponents have successfully unraveled the argument for the tax, and it is opposed by many businesses that wield clout.

If I'm wrong on any of this, there's always next year.