The headline of an article at WorkCompCentral this morning is “Liberty Mutual to Exit Workers’ Compensation.” That headline is misleading.
WCC revised the headline; it now reads “Liberty Mutual backing away from workers compensation”
While there’s no question the formerly-largest-writer-of-workers’ comp insurance has dramatically cut back, lopping off about a third of its WC premium, it remains the fourth-largest writer, continuing to seek new business in some markets and hold on to existing accounts in many.
Yes, it sold Summit; and its WC business in Argentina; and paid Berkshire to take over several billion dollars in WC legacy claims. Yes the executive ranks are no longer the exclusive domain of former Liberty WC claims handlers and sales folks – far from it. Yes, personal lines is the future of the company.
None of those changes, dramatic as they are, nor all of those changes together, mean Liberty’s dumping WC entirely.
But what if mother Liberty does bid farewell to work comp?
The WCC article contained a passage that – in my view – is inaccurate at best.
There is worry that Liberty Mutual’s dropping out of workers’ compensation could lead to higher costs for employers and result in companies making cutbacks to injury benefits or challenge claims submitted by workers, Ishida Sengupta, director of workers’ compensation at the National Academy of Social Insurance, told the Globe.
“I certainly think it doesn’t bode well,” Sengupta said.
That is totally nonsensical – companies CANNOT make “cutbacks to injury benefits.” This is workers’ comp, and benefits are statutorily determined.
In addition, there’s no logical reason the fourth largest WC insurer’s decision to exit work comp would lead to higher cost to employers or encourage those employers to challenge claims. I’m really surprised that someone from NASI (an organization in which I am a member) said that – if they did.
BTW I asked Liberty’s press people to comment early this am; they haven’t done so as of 4 pm.