COVID-19, low interest rates and higher claims rates, partly due to an aging workforce, are among the factors that have reversed a year-long trend of flat or lower renewal for workers' compensation, experts say.
"In the price environment, we are beginning to see it cross from a flat renewal to the low single figures" on average, "says Rob Stein, New York-based market leader for the Aon PLC mid-market." This is a reverse trend from the big cuts as we have seen. ”
Prices are starting to rise slightly, says Mauro Garcia, Schaumburg, Illinois-based technical director and head of work compensation for Zurich North America.  The COVID-19 pandemic and related uncertainty factors are a leading factor in the changing market, experts say. The pandemic has brought about changes in the workforce and a plethora of laws and proposals on disease conditions ̵
"COVID has made this renewal season very different from before. It is very complicated, "said Garcia.
There is still uncertainty about the duration of the pandemic, the rollout of vaccines and the long-term effects of the disease, he said.
" COVID has been the great wilderness ", says Mark Moitoso, Atlanta -based risk practice leader for Lockton Cos. LLC.
The Boca Raton-based National Council on Compensation Insurance collects information on COVID-19 workers' compensation nationwide to better understand its system costs, says Jeff Eddinger, NCCI's Chief Executive Officer.
"For the most part, they tend to be the cheapest," he said, adding that there are a small number of "outlier" claims that are costly.
COVID -19 also added complexity to insurance workers according to experts. For example, some restaurants have staff who deliver food in vehicles, retailers deliver goods to customers and much of the workforce works from home.
"We have had to adapt to the big change in exposures," Waters said. "Exposures can go both ways: Your risk profile can get better or worse."
Changes in the renewal process may depend on the type of business involved, says JoEllen Thelen, St. central region of Aon.
"With healthcare and everything food-related, anything in retail, you can expect to have to prepare the client for a large number of questions about COVID, about COVID-related (safety) procedures," she says. sa.
During renewals, "clients will not be accustomed to the details of questions they will be asked to answer," Thelen said.
Brokers must carefully examine the conditions to see how insurers respond to problems with infectious diseases, she said.
Historically low interest rates also contribute to the pressure on insurers to raise interest rates.
“You can not rely on investment income for a long-term line as to increase profitability. Now you have to switch and focus on the subscription results, "said Garcia from Zurich.
" We invest our premium in mostly bonds that have only returned to 3%; now it's 1%, "Waters said.
The aging workforce is also contributing to market conditions, he said. In 2021, 25% of workers were over 55, Waters said.
" 2009 was 12%, "he said. "With an aging workforce, you get a slower return to work and an attack of comorbidities, and that will only increase the severity."
But the market is still competitive, experts say.
"Unlike other real estate. and accident lines, employee compensation coverage continues to be a sought-after business for insurers, "said Moitoso of Lockton. In terms of competition," the market is still behaving in the usual way, "he said.