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| | Promising Sign Of Growth Reported In The Workers’ Compensation Insurance Market, Although Not Out Of The Woods
By Lonce LaMon - May 15, 2012
The National Council on Compensation Insurance (NCCI) has released its latest edition of its annual State of the Line.
The report states workers’ compensation insurance grew in the United States in the year 2011, meaning that premiums grew in that year, but that this growth has been countered by the apparent stagnation of the market.
The report suggests that the combined ratio for the workers’ compensation line in the U.S. remains unsustainable.
Workers’ compensation premiums grew by 7.4% in 2011, and although this is a promising sign for the insurance industry, the changing regulatory landscape has brought more challenges to insurance companies. There are signs that the industry has made some progress over 2010 but that combined ratio has held firm at 115 for two consecutive years. This could mean trouble for workers’ compensation insurance providers as it is creating worrisome turbulence in the U.S. market.
The NCCI cites ongoing economic turmoil as one of the key factors contributing to the stagnation of the market and the fears gripping the workers’ compensation insurance industry. Because workers’ compensation coverage is closely linked to the employment and labor markets, it is acutely sensitive to changes in the nation’s economy. Though the U.S. economy has shown signs of recovery from the Recession that technically began according to pundits in 2007, the NCCI claims that combined ratios continue to be at levels that are unsustainable for many of the country’s workers’compensation insurance providers.
Good news may come in the form of the unchanging results from 2010 to 2012. Though the numbers may not bode well for the worker’s compensation insurance sector, the fact that they have remained unchanged for so long could be considered a positive sign. The NCCI notes that the results could have been far worse, which suggests that the market may soon turn around as the economy begins to show promising signs of recovery.
lonce@adjuster.com |
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