Upcoming Elections – Effect On WC
Does the upcoming elections effects on Workers Comp?This is now the most popular question that I receive from our readers. This question pops up often when there is a Presidential election.
The answer is yes and no. I am sorry to be so vague. The election may have some type of effect depending on the business client after the elections. As we all know, the business climate is touchy at best. As with most businesses, the Workers Comp environment will spin off removing any unknown variables.
If the business climate changes for the better, the insurance carriers will be able to better invest the premiums they receive which will soften the market. The market as of now is still somewhat soft.
However, the market cannot stay soft for very much longer. Almost all the insurance execs think the market will harden over the next few years. In my opinion, if an insurance carrier can receive a higher return on investment, they will look to be even more competitive as they can make more $$ off investing the premiums in the stock market.
The bond market and savings rates have been and will be anemic for years to come. The carriers will look to invest in the stock market heavily at some point in the future. I am sure we can all remember a time when even a mediocre stock mutual fund was returning over 10%.
I am unsure if it really makes a difference whether Obama in reelected or Romney serves his first term in office. I am looking at the numbers, not the politics.
My final answer, (and I am sticking to it) is Workers Comp is so heavily based on the economy of each state. For instance, Senate Bill 863 out of California is unto itself on how the CA Workers Comp market will be affected in the next few years.
How about the new NCCI split points? They will have much more of an effect than any election might have on rates. North Carolinajust came out with a laundry list of rule changes that will affect Workers Comp, but only in North Carolina.
I try to keep up with all of the changes nationwide in Workers Comp. It can be dizzying at best. I subscribe to and read over 20 newsletters a day along with various blogs on WC. I wish I could write on every change in every state. I am unable to come even close to that old goal.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com.