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Comp underwriting results improved in 2006: NCCI


BOCA RATON, Fla.--Workers compensation insurers experienced a calendar-year combined ratio of 96.5% for 2006, a 6.5-point improvement over 2005, according to an NCCI Holdings Inc. annual market analysis released Thursday.

That represents workers comp insurers' best underwriting results in 30 years, according to the NCCI's "State of the Line" report.

On an accident-year basis, the industry saw its fourth straight year of underwriting profits, with NCCI estimating that insurers posted a combined ratio of about 87% for 2006.

NCCI noted, however, that the above results were skewed by the experience of California, where reforms have had a substantial impact on costs and pricing.

NCCI said its short-term view of the line is optimistic, but its long-term view remains cautionary because of issues such as skyrocketing medical costs and low investment returns.

"Although the underwriting results are the best in decades, the returns after investment income and federal taxes show that returns on surplus supporting the business are not close to record levels, and only modestly above the average for the last 20 years due to the low levels of interest rates," the NCCI report states.

The report is available at