Bob Hartwig of the Insurance Information Institute talked about his optimistic views of the economy, a somewhat different perspective than he shared with the audience at last year’s NCCI Issues Symposium.
Hartwig does not expect a ‘double-dip’ recession, and believes we’ll see a significant expansion in employment – and therefore work comp payrolls and demand for commercial insurance – later this year and into 20110.
Projections shared with the audience included significant growth in commercial insurance, albeit growth that will be spotty and vary significantly across the country. At this point it appears the states from Texas north are going to see the most growth the soonest, it would be great if these states actually had residents.
Hartwig sees unemployment dropping to near 9% by the end of this year. That’s a 0.7 point improvement over April numbers, a significant move. I’d note that compared to other economists he’s pretty optimistic as others see employment staying well above the nine percent figure.
Hartwig (and panel members) veered off into politics, decrying the Stimulus Bill as ineffective in creating jobs, citing no visible impact on workers comp policyholder types or volume. A credible and well-respected source, Macreconomic Advisers, noted recently: “we still estimate that the peak effect of the stimulus on employment will reach about 2.5 million by the end of this year before then fading gradually.” Other economic experts have similar or somewhat lower projections, but for Hartwig et al to infer the Stimulus Bill was ineffective was inaccurate.
Panelists discussed the potential for a Federal Office of Insurance Information, noting its function is to collect information and has no regulatory authority per se. The current financial reform bill includes funding for the Office while limiting its role and functions.
The panelists opined the health reform bill may help contain comp medical costs, as it will increase health insurance coverage and thereby reduce the need for work comp payers to fund ‘non-comp’ care. John Leonard of MEMIC noted that there is a ‘lot of good’ in the reform bill, but it’s too early to tell exactly how much, and how, reform will affect comp. John Hill stated that if the proposal helps to weed out inefficiencies in the health care system, that will be a positive, as will the impact of increased coverage on the overall health status of the population.
There was one more session last Thursday that I’ll write about later this week.
May
10
