Comp holds steady despite early pandemic predictions: Marsh
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The workers compensation market continues to remain steady and competitive, despite dire predictions at the beginning of the pandemic, according to a study released Thursday by Marsh LLC. However, presumption laws, payroll drops and shifting employee classifications continue to create challenges for employers, the brokerage warned.
The report, which studied the impact of coronavirus on the workers compensation market and looked at future challenges for the industry, found that average renewal premiums have been between -5% and 3% in the first half of 2020, and that claims of COVID-19 exposure in the workplace have had minimal impact on the market, in large part because of the decline of other reported occupational injuries.
However, industry expert predict premium volume will decline by as much as 20% in 2020, with premiums continuing to fall in 2021 due to the current state of the labor market, according to the Marsh report.
This is in line with June predictions by the Deloitte Center for Financial Services, which anticipates the same drop with a recovery not before 2023.
The industry has not seen the expected large number of COVID-19 claims, according to the report, even with laws in more than a dozen states that provide the assumption that certain classes of workers who contract COVID-19 did so on the job, making it easier for those workers to obtain workers comp benefits.
Changes may be on the horizon for some employers with regards to workers comp insurance premiums due to changes in payroll, shifts in employee classification and injury experience ratings. For example, the study notes that wait staff who may not be delivering orders or performing remote customer service functions would temporarily fall under different class codes.
More insurance and workers compensation news on the coronavirus crisis here.
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