Despite the commercial insurance market growing harder this year, workers compensation audit remains a bright spot for buyers, consistent with panelists on a webcast sponsored by Marsh’s Workers’ Compensation Center of Excellence (COE).
Overall workers’ compensation pricing fell by just over 5% on the average within the third quarter of 2019, and quite 70% of employers renewed flat or with rate decreases, according to Marsh data. James Salada, Northeast placement leader for the risk management segment within Marsh’s US Casualty Practice, noted that many insurers now want to write workers’ compensation to balance out declining profitability in auto and general liability, a reversal from just a couple of years ago when insurers often shied faraway from the road.
Still, despite workers’ compensation remaining relatively competitive—especially in comparison to other primary casualty lines—there is growing concerned about interest rates and reserve inadequacy for liability lines potentially affecting workers’ compensation.
Employers would have the best to differentiate their risk for underwriters by highlighting their safety culture. With insurers being more vigilant within the underwriting process, employers should be prepared to supply more information about payroll, loss history, and employee concentrations. Moreover, they ought to work with their brokers to line clear renewal strategies and begin the method early.
Panelists on Marsh’s webcast explored a variety of trends that are expected to affect workers’ compensation and workplace safety programs in 2020:
The panelists also addressed the growing use of technologies in workers’ compensation programs as well as a number of legislative updates that are expected to affect workers’ compensation.
Overall workers’ compensation pricing fell by just over 5% on the average within the third quarter of 2019, and quite 70% of employers renewed flat or with rate decreases, according to Marsh data. James Salada, Northeast placement leader for the risk management segment within Marsh’s US Casualty Practice, noted that many insurers now want to write workers’ compensation to balance out declining profitability in auto and general liability, a reversal from just a couple of years ago when insurers often shied faraway from the road.
Still, despite workers’ compensation remaining relatively competitive—especially in comparison to other primary casualty lines—there is growing concerned about interest rates and reserve inadequacy for liability lines potentially affecting workers’ compensation.
Employers would have the best to differentiate their risk for underwriters by highlighting their safety culture. With insurers being more vigilant within the underwriting process, employers should be prepared to supply more information about payroll, loss history, and employee concentrations. Moreover, they ought to work with their brokers to line clear renewal strategies and begin the method early.
Panelists on Marsh’s webcast explored a variety of trends that are expected to affect workers’ compensation and workplace safety programs in 2020:
- Marijuana legalization remains a crucial and sophisticated topic for employers, especially considering the divide between state and federal laws also as inconsistent court rulings on workers’ compensation benefits for employees that test positive for marijuana. There remain arguments both in favor and against of using marijuana as a sort of treatment in workers’ compensation.
- The Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) expires at the end of 2020 and unless there is a quick decision about its fate, many employers are expected to start facing policy price increases and doubt about their renewals. Employers with large concentrations of employees could be among the worst affected.
- Telemedicine is gaining interest among employers due to its ability to provide effective care to injured employees in a timely fashion, which could be the difference between a good or bad claim outcome. Dennis Tierney, Marsh’s national director of workers’ compensation claims, said while telemedicine is mainly used during the triage process today, it could facilitate ongoing doctor visits and physical therapy and rehabilitation in the future.
- California’s Assembly Bill 5, set to take effect on January 1, changes the criteria used to classify a worker as an employee or an independent contractor. Because AB5 is expected to make it more difficult for employers to classify workers as independent contractors, it may lead to increased costs that employers may not be able to absorb.
The panelists also addressed the growing use of technologies in workers’ compensation programs as well as a number of legislative updates that are expected to affect workers’ compensation.
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