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Workers comp claim frequency posts first rise since 1997: NCCI

Posted On: Sep. 26, 2011 12:00 AM CST

Workers comp claim frequency posts first rise since 1997: NCCI

Several Great Recession factors may have caused a sudden halt in the trend of decreasing frequency of workers compensation claims, according to NCCI Holdings Inc. research released Monday.

Modest increases in employment since the recession formally ended in mid-2009 and workers possibly being less fearful of losing their jobs for filing claims may have contributed to a 3% rise in the frequency of lost-time claims during accident year 2010, NCCI said in its research brief.

Prior to 2010, the frequency of comp claims declined an average of 4.3% per year since 1990, with the only other increases occurring in 1994 and 1997.

“Reductions in claim frequency have been a major bright spot for workers compensation” with injury rates falling a total of 56.4% from 1990 through 2009, the rating and research organization said.

An increase in employment drives claims frequency because new hires generally file more claims than longer-term employees, NCCI noted.

Extent not entirely clear

Additionally, “some insurance experts have suggested that workers, fearful of losing their jobs, may have postponed filing workers compensation claims, but now appear less hesitant to file claims as the economy has shown signs of modest improvement,” the research brief said. “While the extent to which this phenomenon occurred is unclear, it may have contributed to the observed increase in claim frequency in 2010.”

There also is evidence of an influx of small lost-time claims during 2010, which may have been medical-only claims in previous years, NCCI said. But a lack of available light duty jobs to which injured workers could return because of the recession might have changed that dynamic.

It remains to be seen if the 2010 frequency uptick is part of a new normal or a minor blip in the long-term decline in frequency, NCCI said.

While frequency is up, growth in average indemnity and medical cost per claim slowed in 2010, the NCCI analysis added.