ORLANDO, Fla. – As the threat of a recession looms, the workers’ compensation insurance industry remains relatively healthy, an industry expert said during a presentation Wednesday at the National Council on Compensation Insurance’s annual Insights Symposium.
A recession this year would likely slow commercial lines’ net income premium growth, taking pressure off the current tight market as demand for property/casualty insurance slows, said Robert Hartwig, clinical associate professor and director, Risk and Uncertainty Management Center. at the University of South Carolina’s Darla Moore School of Business.
During a presentation on the labor market, economic uncertainty and the combined effect on workers̵7; conditions, Hartwig said the insurance industry is likely to continue to remain stable despite what has happened in the banking sector, including the recent major bank failures.
“The non-life insurance industry is strong, stable, sound and safe,” he said.
Workers Comp remains the only major commercial line to see declining rates. “It really sets workers apart from other major lines,” Hartwig said.
Property and casualty insurers have seen rising investment income, which has helped offset underwriting losses, he noted.
Mr Hartwig said the labor market remains strong, with unemployment at a generational low. Workers ages 25 to 54 are returning to work in large numbers after the pandemic, and the rate of employees quitting their jobs has fallen sharply, he said.
“Labor markets can reasonably be expected to remain tight,” he said.