Comp residual market premium, share decline in 2020Posted On: Jun. 17, 2021 2:38 PM CST
The workers compensation residual marketplace and reinsurance pools remained largely stable during the COVID-19 pandemic, but premium volume and market share is projected to decrease for the sixth consecutive year, according to the National Council on Compensation Insurance’s 2020 Residual Market Management Summary.
For policy year 2020, combined ultimate written premium for all reinsurance pools serviced by Boca Raton, Florida-based NCCI is projected to decline 9% to $790 million, compared with 2019, and the pools are also predicted to see an ultimate operating loss of $47 million and a combined ratio of 106%, the report revealed.
Residual market premium volume and market share also continued to decline for the sixth consecutive year, while total 2020 premium in workers comp insurance plans administered by NCCI — which includes reinsurance pools and direct assignment experience — decreased to $655 million from $698 million in 2019, and its percent of market share dropped to 5.3% from 5.4% the prior year.
The majority of states with NCCI-serviced reinsurance pools reported net operating losses — minus any loss adjustment expense — though Arkansas, Delaware, Kansas, Nevada, North Carolina, South Dakota, Tennessee and Washington, D.C., reported net operating gains.
NCCI, which provides residual market services in 31 jurisdictions, based its projections on a partially earned policy year.