Two mostly-ignored things will have way more impact on workers’ comp than any other ten factors.
And as usual, workers’ comp is out to lunch.
- ignorance of actual research on COVID’s cost,
- a failure to focus on COVID cost drivers,
- a complete lack of understanding of how the US healthcare system functions
- misguided focus on claims costs and initial failure to
- anticipate the real impact – a drastic drop in premiums.
That led to far too much angst and far too little reality-based planning by the workers’ comp industry.
Fast forward to today, where the opposite is happening.
The industry is blithely ignoring the impact;
- heat will have on claims, loss ratios, combined ratios, and claim duration, and
- infrastructure investment will have on premiums and claims.
Sure there’s heat exhaustion and heat stroke and heat prostration (which costs about $38k per claim…)
But that’s the (forgive the analogy) tip of the iceberg…Excessive heat also creates more injuries of all types…injuries to cherry harvesters in Washington State increase 1.5% for every 1 degree C above 25 C (77 degrees F) – mostly from falling off ladders.
Oh, and California data shows: compared to days with temps in the 60s,
- on days when the temperature was between 85 – 90 degrees Fahrenheit…the overall risk of ALL types of workplace injuries was 5 to 7 percent higher.
- when temps topped 100 degrees, the overall risk of injuries was 10 to 15 percent greater.
This means more claims in an industry that is generally unprepared to “manage” heat-related claims.
Hundreds of billions of dollars is flowing into infrastructure, investment that has already created ninety thousand jobs in:
- transportation improvements,
- highway, bridge and road maintenance and replacement, and
- heavy industry.
And many more jobs are on the way. (check out where this is happening here).
These are very well-paid, high-frequency and high-severity jobs.
This means premiums will increase as will claims and claims costs. And this will continue for years.
What this means for you.
At risk of belaboring the obvious, a more dangerous environment for many more workers in already high-risk jobs.
Heat + Jobs = more premium dollars, higher costs for self-insureds, more claims, and higher severity claims.