At the 2022 NCCI Annual Insights Symposium, NCCI Chief Actuary, Donna Glenn, presented the annual State of the Line Report. This includes workers’ compensation data from NCCI states on primary workers’ compensation policies.
The highlights were as follows:
- For calendar year 2021, workers’ compensation had the lowest combined ratio of all property-casualty lines.
- In some ways, 2020 and 2021 were anomalies, but in other ways, it followed prior patterns.
- Workers’ compensation premiums increased slightly in 2021 vs. 2020, after dropping significantly in 2020 from 2019. Net written premiums, including state funds, were $43 billion.
- The calendar year combined ratio for 2021 was 87%, the same as 2020. This is the fifth consecutive year under 90%.
- Payroll in workers’ compensation increased 10.6%. This was the first time since 1984 that there was a double digit increase in payroll. 7% of this is due to wage rate increases and 3% is due to increases in employment.
- For 2022, NCCI recommended an average premium decrease of over 7%. This was the ninth consecutive year where an overall premium decrease was recommended.
- The accident year combined ratio for 2021 was 102%, a three-point increase from 2020.
- In 2020 and 2021, NCCI states had over 60,000 COVID-19 claims and over $500 million in losses with primary workers’ compensation policies.
- Excluding COVID-19 losses, claim frequency increased by 7% in 2021, which was expected as payroll increased after the pandemic. However, looking at 2020 and 2021 combined, the result is a frequency decline of 1%.
- Indemnity claims severity was flat compared to 2020 at $25,600/claim. This differed from prior years where indemnity claim severity and wage inflation tracked closely.
- Medical lost time severity was also flat at $26,200/claim. This is the first time in years that the medical severity rate change was less than personal health care price indexes.
To view the full report, click here.