ORLANDO, Florida – The employment compensation sector remains profitable and stable despite the effects of the covid-19 pandemic, rising inflation and changes in the workforce.
The National Council on Compensation Insurance unveiled its “state of the line” report on workers at its annual Insights Symposium in Orlando, Florida, on Tuesday.
“The employee compensation system is strong and resilient,” said Bill Donnell, NCCI’s President and CEO. Although “our environment is changing, and the pace is increasing in relation to our workforce and our workplace.”
The sector reported that private insurance companies plus government funds net written premiums increased by 1
% to $ 43 billion in 2021. The combination rate for private insurance companies was 87% in 2021, making it the eighth consecutive year that the workers’ industry has issued an issue guarantee profit. Last year was also the fifth year in a row with a combined ratio below 90%. Workers’ reserves are “robust,” according to the report, which showed that reserves grew to $ 16 billion in surplus by the end of 2021.The industry has earned “despite challenges and progress,” said Mr. Donnell to the participants at Boca Raton, the Florida-based rating agency’s first personal annual meeting in two years.
In each of these years, the organization’s expert panel – in presentations offered online due to the pandemic – stated uncertainties regarding the effect of covid-19 on the industry.
Although the industry is continuously tracking the effects of the pandemic – more variants and costs related to long-term covid are a concern – the overall effects seem to be waning, as COVID-19 claims decreased in 2021, as do the costs related to worker infections, according to Donna Glenn, NCCI’s chief actuary.
The reduction in covid-19 claims may be the result of widespread vaccinations and the introduction of vaccine mandates, and the continued use of personal protective equipment, as most replaceable infections continue to exist among healthcare professionals and first responders, she said.
Other highlights in NCCI’s annual report showed that data on the frequency of claims for lost time continued to decline, with the pandemic years 2020 and 2021 as declining and increasing anomalies such as shutdowns and reopening skewed figures. Glenn said she expects the overall frequency to continue to decline.
In addition, changes in compensation and severity for medical claims in 2021 are expected to remain unchanged, according to the report.
Another issue to look at is the changing workforce: labor shortages and a migration of workers to more “fulfilling” jobs, Glenn said.
“Workers are on the way,” she said, adding that higher wages – sought after by workers and delivered by employers seeking help – will affect the compensation component of workers’ claims.
NCCI’s report showed that the wage bill increased by more than 10% in 2021 – about 3% from employment and 7% from wages.
“We see this movement everywhere … it has caused a major transformation. For us in work injury compensation, our antennae are going up,” she said. “Studies have shown that short employment time, lack of training, lack of experience can affect workplace injuries and we are worried about this movement. “
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