BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
Many employers renewing their workers compensation coverage at midyear are benefiting from increased competition, with pricing that is the same or slightly less than a year ago.
“It's very much a buyer's market, so we've been able to secure rate decreases on a significant number of our clients' programs,” said Christopher Flatt, managing director and leader of Marsh L.L.C.'s Workers' Compensation Center of Excellence in New York.
Most employers are seeing workers comp rates that range from flat to decreases as large as 5%, experts say.
However, employers with an unfavorable loss experience or a large number of workers in an urban area are less likely to secure significant rate decreases, he said.
Meanwhile, insurers are offering “really aggressive collateral terms for the best-performing companies” as well as “early renewal strategies or multiyear rate commitments” to keep current customers, said Mark Moitoso, Boston-based senior vice president and analytics practice leader at brokerage Lockton Cos. L.L.C.
Rates vary from flat to a decline of 10% across Lockton's portfolio, depending on the underwriter's profitability and the client's loss experience, he said.
In California, employers may see rate reductions greater than 5% as a result of S.B. 863, said Pamela Ferrandino, executive vice president and senior principal of national casualty at Willis Towers Watson P.L.C. in Hartford, Connecticut.
The law that took effect in 2013 increased benefits for injured workers and included several changes — such as independent medical and bill reviews — to reduce costs. The Oakland, California-based Workers' Compensation Insurance Rating Bureau said in November that S.B. 863 could help reduce system costs by $770 million a year.
Rate decreases may also be greater for real estate companies and financial institutions “because a lot of the newer carriers or merged carriers are broadening their appetite to write large, guaranteed-cost business in that sector, and they're being competitive about it,” Ms. Ferrandino said.
"Plenty of capital out there'
The workers comp market is likely to remain very competitive for at least the rest of this year, experts said.
“There's plenty of capital out there,” said Gary Pearce, chief risk compliance and privacy officer at Troy, Michigan-based temporary staffing firm Kelly Services Inc. “If you're a good risk and you can prove you're a good risk, then you become attractive to underwriters.”
Mr. Pearce added that “collateral is not the obstacle it used to be to (changing insurers), so the buyer side is more liquid, if you will, than it was in the past.”
Still, Kelly Services renewed its workers comp coverage Jan. 1 with Chubb Ltd., previously Ace Ltd., in what he described as a “high-level agreement” that's managed from “a multiyear perspective.”
According to the Boca Raton, Florida-based National Council on Compensation Insurance Inc., private workers comp insurers' combined ratio improved to 94% in 2015 from 100% in 2014.
NCCI Chief Actuary Kathy Antonello in May called it “one of the best underwriting results we've had in decades.”
The improved performance has led comp insurers to be “more thoughtful about having broader account strategies vs. simply line-of-business strategies to win over business,” Mr. Moitoso said.
Insurers are willing to be “more aggressive on rates for comp to be able to secure, maybe, a rate increase on a companion line (within property/casualty) that hasn't necessarily performed as well,” such as commercial auto insurance, Mr. Flatt said.
For Syracuse, New York-based Giovanni Food Co. Inc., efforts to improve safety programs and reduce exposures have allowed the private-label food manufacturer to secure lower workers comp prices, Nicole Bryant, human resources manager, said in an email.
The company, Ms. Bryant said, has implemented a return-to-work program; improved a program aimed at decreasing slips, trips and falls; and is working to enhance a program centered on team-based safety behaviors.
The efforts have benefitted Giovanni Food “either through a reduction in our (experience modification) rate or through safety credits received via state-approved safety programs that we have established,” she said of the coverage provided by MEMIC Group.
Transparency and documentation “are critical aspects to getting the best terms and conditions in the marketplace,” Mr. Moitoso said. “Saying you have great safety procedures” but being unable to “formally show an underwriting company how that's actually executed is not going to get you the score you need” to reduce workers comp rates.
While reinsurance rates generally fell at the midyear renewals, there were some signs of stabilization, and many reinsurers declined business where they did not consider the rates to be adequate.