Comp sector posts underwriting gains for 4th straight yearPosted On: May. 17, 2018 11:23 AM CST
ORLANDO, Fla. — The year 2017 was the fourth consecutive year the workers compensation line of business has posted an underwriting gain, according to data released Thursday by the National Council for Compensation Insurance Inc. at its annual Issues Symposium.
Kathy Antonello, chief actuary for Boca Raton, Florida-based NCCI, gave the organization’s “state of the line” report at the gathering in Orlando, Florida. The annual report, available on NCCI’s website, provides an annual review of industry market conditions, including financial indicators, trends, cost drivers and broad economic markers.
Overall, the data for 2017 shows a combined ratio for private workers compensation insurers of 89% — the lowest in NCCI’s historical data, according to Ms. Antonello. The overall reserve position for private insurers also improved in 2017, with NCCI estimating the year-end 2017 reserve position to be a $1 billion deficiency — down from $5 billion in 2016.
When compared to the overall property/casualty market, workers compensation is the only line of business that saw a decrease in net written premium in 2017, she said. In 2017, net written premium for private insurers dropped slightly to $39.8 billion and total market net written premium volume also declined slightly in 2017 to $45.0 billion, according to Ms. Antonello.
Further zeroing in on the comp industry, average lost-time claim frequency across NCCI states declined by 6% in 2017, on a preliminary basis, the data shows. And a similar percentage decline was observed in 2016, according to the report.
“We do not expect this trend to change” Ms. Antonello told attendees.
The number of claims less than $1 million have exhibited a declining pattern, while the number of claims exceeding that dollar amount have been relatively more volatile over time, according to Ms. Antonello.
In NCCI states, the preliminary 2017 average indemnity and medical lost-time accident year claim severities both increased by 4% compared to 2016 figures, the report shows.
The report also looked at the overall change in payroll, which affects the comp industry: a 3.4% increase in 2017 driven equally by changes in average wage, with a 1.6% increase, and employment, with a 1.8% increase.