The state of the U.S. workers’ compensation insurance industry is in a “precarious position” following a trying 2009, while economic uncertainties remain ahead, said NCCI Holdings Inc.
The pace of economic recovery and unknown factors related to health care reform and financial regulation are among uncertainties facing the U.S. industry, NCCI said Thursday, May 6, in its annual “State of the Line” market analysis.
Meanwhile, workers’ comp insurers’ 2009 combined ratio rose to 110 percent from 101 percent the previous year—the largest single-year increase since the mid-1980s, said the Boca Raton, Florida-based unit of the National Council on Compensation Insurance Inc.
Three percentage points of that combined ratio, however, stem from a single insurer adding $1 billion to its reserves. NCCI did not name the insurer, but it said the combined ratio coupled with inadequate investment yields are among market challenges faced by workers’ comp insurers.
Price decreases due to competition and a 23 percent decline in written premiums over the past two years also weighed on private insurers and state workers comp funds, NCCI said.
The report is available online at www.ncci.com.