Workers comp remains strong as labor market rebounds: Expert

ORLANDO, Florida – As the threat of a recession looms, the workers compensation insurance industry remains relatively healthy, an industry expert said during a presentation Wednesday at the National Council on Compensation Insurance’s Annual Insights Symposium.

A recession this year would likely lead to a deceleration of commercial lines’ net written premium growth, taking pressure off the current hard market as demand for property/casualty insurance slows, said Robert Hartwig, clinical associate professor and director, Risk and Uncertainty Management Center, at the University of South Carolina’s Darla Moore School of Business.

During a presentation on the labor market, economic uncertainty and the combined effect on workers comp, Mr. Hartwig said the insurance industry will likely continue to remain stable despite what has been occurring in the banking sector, including recent large bank failures.

“The P&C insurance industry is strong, stable, sound and secure,” he said.

Workers comp remains the only major commercial line seeing declining rates. “That really, really sets workers comp apart,” from other major lines, Mr. Hartwig said.

Property/casualty insurers have seen rising investment income, which has helped offset underwriting losses, he noted.

Mr. Hartwig said the labor market remains strong, with the unemployment rate at a generational low. Workers ages 25 to 54 are back at work in large numbers post-pandemic, and the percentage of employees quitting their jobs is down sharply, he said.

“Labor markets can reasonably be expected to remain tight,” he said.