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The 2013 workers’ comp State of the Line

With long-time top actuary Dennis Mealy’s retirement, NCCI tabbed Kathy Antonello to fill his very big shoes.

On a personal and professional note, it is GREAT to see a woman in a historically-male profession in such a prominent role (says the father of two professional women).

The public introduction of Ms Antonello to the work comp industry is happening now with her presentation on the State of the Line, perhaps the most-anticipated report in the industry.  Here are a few of the highlights:

  • Total P&C premiums for 2013 were up 4.6 percent.
  • The P&C 2013 combined ratio was 96%, a decline of 12 points from 2011 and 10 from the 1985 – 2012 average.
  • Work Comp premium was up 5.4% – $2.3 billion over 2012 and over $8 billion (almost a third) from the low point in 2010.
  • Work comp’s operating gain shot up to 14 percent, a huge jump from last year’s 5.6% and far above 5.3 percent – the average over the last 23 years.

Ms Antonello got into a lot of detail about various components, ALAE, ULAE, various margin calculations, and premium drivers, and did so with humor and polish.  Among the key drivers employment is perhaps the most important.  I’ll leave the rest of the details to those who want to download the full presentation. (available at no charge, registration is free as well)

She also provided a view into some cool new data visualization tools NCCI has developed, tools that help explain trends over time and the impact of various factors.

So here’s the $64 billion question – is a soft market nearing?  Will some see these strong results as a reason to double-down on work comp, write as much business as possible in as many states as possible, and thereby start a decline in effective premium rates?

States such as California, Arizona, Colorado, New Jersey, Florida, and Connecticut – where premiums grew by double digits – may be especially attractive to new entrants and some current writers.  

Add to those factors the news that premium rates approved for 2014 increased less than a point, and a report from Goldman Sachs that work comp premium increases are moderating, and the likelihood of a softer market looks a little higher.

What does this mean for you?

The work comp industry has never been unable to enjoy success for very long.  Just as we are starting to see daylight, there are some potentially-troubling indications that the market may soften.

Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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