The National Council on Compensation Insurance (NCCI) in December outlined several of the top concerns in Workers’ Compensation insurance for 2022, based on its survey of 100 insurance executives in the space. Following are some of the survey’s takeaways.
Rate Adequacy
Carriers are focused on ongoing loss cost decreases, driven primarily by declining frequency across all areas and categories, and their ultimate impact on premium levels. They are looking at how long these trends will continue and what factors might contribute to a change in direction. They are also concerned about the “great reshuffle” in the U.S. workforce and how it will impact claim frequencies and severities. In addition, the impact of inflation, unemployment, and interest rates in a post-COVID economy have insurers looking at rate adequacy moving forward.
COVID Impact
As new COVID variants continually emerge, insurers are looking at the potential long-term impact on Workers’ Compensation, including whether states will expand/extend their presumption laws for infectious diseases. According to the NCCI, at least a dozen states have introduced legislation that would establish permanent Workers’ Compensation presumptions for infectious diseases and pandemics. While several of these bills specifically mentioned COVID-19, these proposals also contain terms such as “contagious disease,” “COVID-19 or similar disease,” or “other future qualifying pandemic,” says the NCCI.
In addition, with return-to-office plans postponed or shelved, executives are concerned about the effect on Workers’ Comp with a significant number of employees continuing to work from home. Also, how do insurers quantify the costs and challenges related to long-haul COVID workers, and what will be the financial impact of these resulting medical and indemnity claims?
Shifting Workforce/Workplace
As the pandemic continues to be a fluid situation, the outlook of the future workforce and workplace is unknown. Some of the questions being raised by the NCCI survey respondents include:
- Are there increased safety concerns due to an inexperienced and yet ever-aging workforce?
- Will we see a change in the long-term downward trend in frequency?
- To what extent will gig or contract workers become employees covered by Workers’ Compensation?
Workers are also looking for more flexibility in the wake of the pandemic. This means employers are increasingly offering hybrid environments that enable employees to split their time between working from home and in the office. How will this shift in the workplace environment impact Workers’ Comp claims and return-to-work programs?
Rising Medical Costs
The outlook for medical inflation is problematic for the Workers’ Comp industry even with the acceleration of telehealth. Insurers are looking at how they should weigh the cost of new medical technology against the impact on an injured worker’s recovery. How do they decide on the best course of action to achieve the best results? Another concern is the future of prescription costs, regulation, and management and their impact on the cost of claims.
Manchester Specialty Programs has numerous avenues available to secure Workers’ Compensation coverage for Home Care, Allied Health and Human/Social Services organizations. We work with a select group of highly rated Workers’ Compensation partner carriers and provide underwriting services in our exclusive program. For more information about how our products and services can help protect your insureds, please contact us at 855.972.9399.