Market Update 2018 Q1 : Workers Compensation Insurance and Occupational Accident Programs

By March 28, 2018 Article

By now, everyone has heard about the struggles with the commercial auto insurance market. However, the good news is that in 2017, workers compensation and occupational accident pricing decreased overall, especially for safe companies. The competition remains strong in 2018 as well, and it may be time to take advantage of a relatively soft market. Below is a market update for the first quarter of 2018 that may impact rates and purchasing decisions.

For 2018, a desire among insurers to grow their market share should lead to desirable pricing for most buyers of workers’ compensation insurance and occupational accident programs. It should be noted that underwriters will likely exercise increased discipline in the coming years. Underwriters are continuing to carefully review a business’s loss history and safety programs while writing and renewing policies. The market capacity should remain for businesses with good risk profiles and positive loss experience, and competition among carriers should lead to flat renewals. Of course, for companies with poor claims history, underwriters will continue to be reluctant to compete for the business without clear signs that management cares about safety.

Trends to Watch

  • Medical care costs: According the Bureau of Labor Statistics, medical care costs rose by 3.2 percent during the first half of 2017. This rise outpaced inflation for the same period. While workers’ compensation premiums are largely unaffected by this rise in costs, if this trend continues, insurance companies will have to re-examine their pricing models.
  • The opioid epidemic: Workers’ compensation has been affected by the opioid epidemic, as 40 percent of all drug spending under workers’ compensation is on opioids. Each year, more and more workers’ compensation stakeholders, including state governments and insurers, are stepping up to address the issues and impacts of opioid usage by injured workers. To date, a number of states have introduced legislation aimed at curtailing opioid misuse and addiction in workers’ compensation claims.
  • Owner Operator Classification: This is a labor law issue that can have great ramifications on workers compensation and occupational accident programs. With the increased dependence on independent contractors, many states (ahem, California!) are tightening regulations to limit the owner operator-motor carrier relationship. Anyone using owner operators should work with an attorney to ensure they aren’t suddenly classified as employees.

The Daniel & Henry Company specializes in providing Workers Compensation and Occupational Accident programs to the transportation industry. To start exploring your options today, please CLICK HERE or email us at RuebsamJ@danielandhenry.com