10. Comp premiums unlikely to recover before 2023: Deloitte
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There’s been much speculation about the impact of the COVID-19 on property/casualty lines, with early predictions of premium drops of nearly 20% in workers compensation and an unlikely recovery before 2023.
In June, Deloitte Center for Financial Services issued these forecasts based on the number of workers furloughed or laid off in the second quarter. Coverage of Deloitte’s report was the 10th most read workers compensation story on Business Insurance’s website in 2020.
The reality hasn’t been quite as dire, with Fitch Ratings Inc. reporting in November direct written premium declines of just under 10% for the first half of 2020, and also a sizeable drop in claims frequency because of changed risk exposure.
In December, A.B. Best Inc. reported that direct written premiums in workers compensation for the first three quarters of 2020 were down 13% compared with the same period in 2019, but noted that the line’s direct loss ratio held nearly steady at 49.1, likely due to favorable loss frequency from the lower risk profile due to remote work, and furloughs and layoffs in higher hazard industries.
