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Member, Beacon International Group, Ltd.
Property/casualty insurers, including workers compensation underwriters, should continue realizing “the benefits of exposure growth that began in earnest last year,” Robert Hartwig wrote in a just-released first quarter results report
“For example, the value of manufacturing shipments, has nearly returned to its pre-crisis peak,” Mr. Hartwig, an economist and president of the Insurance Information Institute wrote in his report, available here.
“Indexes of manufacturing and non-manufacturing activity through May 2012 indicate that expansion was continuing, despite economic turmoil in Europe,” he wrote.
Work comp exposure is measured by employer payrolls, and those are also up.
“The private sector created 2.105 million jobs last year, up from 1.423 million in 2010,” Mr. Hartwig continues. “Through the first three months of 2012, private sector employers added an additional 678,000 workers (and a total of 847,000 through May).
“Overall payrolls, the exposure base for workers compensation insurance, now exceeds its pre-crisis peak. During 2011, the unemployment rate ranged from a high of 9.2 percent in June to a low of 8.5 percent at year’s end. By March 2012, the unemployment had dropped still further to 8.2 percent.”
Yet, recent news reports point to continued slow economic growth and plenty of uncertainty ahead for the economy and workers compensation.
I am writing this just minutes away from the Supreme Court releasing its decision on the Health Care Affordability Act, which will certainly impact workers comp, although I am not certain how.
Meanwhile, Bloomberg just reported that “the number of applications for unemployment benefits hovered last week near the highest level of the year, showing little improvement in the U.S. labor market.”
So it’s not an entirely rosy outlook, but what lies ahead?